ANALYSIS:A 'big bang' approach to tackling hospital deficits would have severe implications for services, writes MARTIN WALL
THE COUNTRY’S main hospitals are facing serious financial difficulties and have a collective deficit of more than €145 million.
How this issue is dealt with by both the Government and the Health Service Executive could have significant implications for patient services both in the weeks ahead and into next year.
Nearly 60 per cent of the health service budget is spent on pay and this cannot be touched under the provisions of the Croke Park agreement. However, the numbers employed are continuing to fall steadily – there are more than 3,000 fewer nurses and midwives than there were in 2009 when the recruitment embargo was introduced – and this has a knock-on effect on the number of beds available for patients.
According to the Irish Nurses and Midwives Organisation there are already more than 2,300 beds closed in district, local and regional hospitals around the country.
Theatres and facilities in hospitals have already been shut down as part of existing cost-containment measures.
If hospitals were expected to address their deficits in a “big bang” approach before the end of the year, the implications for services would be severe and would manifest themselves in longer waiting lists, more patients queuing on trolleys and increased number of patients having to remain inappropriately in hospitals due to cutbacks in home helps and other community services.
The Government’s official position is that there will not be any financial bailouts for hospitals or other agencies in difficulties this year and that everyone will have to get by within their existing financial allocation.
However, Minister for Health James Reilly has also said that the department would not allow hospitals “to go broke”.
The recent agreement by the department to provide Tallaght hospital with a financial lifeline would appear to fall into this new role as effectively a lender of last resort.
The Minister said that Tallaght would be given support to deal with its €11 million deficit but that this money would have to be repaid next year. It was, in essence, a loan.
Other voluntary hospitals – institutions with their own boards but which rely on State funding to operate – are, according to highly placed sources, expected to be directed towards their banks to deal with their financial pressures.
The Department of Health is expected to require the HSE to deal with the financial pressures from its own resources.
The executive has sought supplementary funding of nearly €60 million arising from expenditure on its voluntary redundancy scheme last year. It is still awaiting a response to this application.
In addition to whether it will provide this funding, a key policy question for the Department of Health will be whether the executive and voluntary hospitals will be allowed to carry over their deficits into next year.
The Minister has pointed out that hospitals were already about €70 million in the red at the start of the year because of such a policy adopted last year.
Deficits carried over have to be paid from the following year’s budget, exacerbating an already difficult financial situation.
The health budget for next year is, as yet, unknown. But the Minister has confirmed there will be cuts.
Any new cuts would have to be added to the deficit carried forward and would have to be reflected in the official service plan – the total level of services to be carried out for the budget provided – which is agreed by
the executive with the Government.
This would, in effect, lead to deeper cuts next year.