THE VHI is set to provide a €50 million cash advance to the Health Service Executive (HSE) as part of measures aimed at allowing the health service to maintain existing service commitments this year.
The Irish Times understands the Department of Health is also considering transferring €10 million originally allocated to the National Treatment Purchase Fund to the HSE to avoid the need for cuts in its service plan due to a funding shortfall.
Other proposals under consideration include halting some increases in pay and allowances due to hospital consultants under a new contract agreed last year.
The HSE has sought to revise its service plan for the year – the blueprint setting out the level of services it will provide in return for its exchequer funding for the year – in a bid to save €72 million.
It is understood the HSE had proposed cutting home-help services and acute hospital bed numbers as part of a proposed amended service plan submitted to Minister for Health Mary Harney for approval.
However, it is believed the department has produced proposals for additional revenue streams for the HSE as an alternative to cutting services.
The €72 million in savings formed part of a deficit, potentially several hundred million, which the HSE had to address this year.
Informed sources said among the alternative revenue streams proposed will be a €50 million advance payment made by the VHI in respect of subscribers treated in public hospitals.
Sources said that the HSE’s systems for submitting claims to the State-owned VHI for processing and payment is much slower than those employed by private hospitals.
It is understood that while private hospitals have an average 45-day turnaround for receiving payment from the VHI, for the HSE this can take up to 120 days.
Sources said the €50 million advance by the VHI under the new plans would represent money which the insurance company would have had to pay in the months ahead in any event.
Under the new consultant contract doctors were scheduled to receive half of the increased salary with effect from last June, with the balance payable in June 2009.
In some cases consultants would have stood to receive increases of between €50,000 and €60,000 depending on the type of new contract they signed.
It is understood the department is considering paying only the first half of the increase with effect from last January.
Sources said among other measures being considered is one to drop plans to increase allowances for on-call availability and after-hours call-outs, payable to consultants under the new contract.
The new contract involved on-call allowances being increased by about €1,500, with the maximum payable for call-outs being raised from €24,000 to €30,000.
It is understood Ms Harney will make a final decision in relation to the HSE’s revised service plan tomorrow.
A spokesman for the Minister said last night that she had stated recently that she was making great efforts to ensure that the HSE and its staff in its revised service plan would deliver services as originally anticipated.