Cost issue:A number of planned hospital developments around the State have been put on hold pending the completion of new value-for-money analyses sought by the Department of Finance.
In a letter to the Health Service Executive (HSE) last month, the Department of Health instructed that the planned phase 2B development at Longford-Westmeath Hospital in Mullingar, the stage two development at Our Lady of Lourdes Hospital in Drogheda, Co Louth, and the construction of a new national rehabilitation hospital in Dublin should not proceed at present. The Department of Health also ordered that a planned expansion of the dialysis service at Beaumont Hospital in Dublin should not go ahead.
Department of Health secretary general Michael Scanlon told HSE chief executive Prof Brendan Drumm that this project should be put on hold, pending the submission of "a full business case to establish that this represents a better value-for-money approach than procuring the required capacity from the private sector".
The moves to suspend the development of these projects were part of the conditions under which the Department of Finance sanctioned the €555 million capital programme for the health service for the current year.
Mr Scanlan told the HSE that under the Department of Finance's value-for-money initiative, no project costing more than €30 million could proceed without a detailed cost benefit analysis being carried out.
"It would appear, therefore, that the following projects cannot proceed at present: Longford/Westmeath phase 2B, stage two [ of] Our Lady of Lourdes Hospital and the national rehabilitation hospital.
"As was provided for in last year's sanction, the Mater and children's hospital development plan cannot proceed to tender without this department's specific sanction," Mr Scanlan said.
He said the Department of Finance sanction for the capital plan this year was also subject to any revenue implications being met from the HSE's own resources for this year.
"As regards the potential revenue implications arising in future years, the HSE should, as agreed, continue to examine the staffing and revenue consequences of the 2006 plan, with a view to achieving reductions in the existing projections or identifying sources of funding from within your existing revenue base," he said.
"Subject to this, the additional review consequences will have to be met from within whatever allocation is approved for 2007 and later years as part of the normal estimates process.
"Given that the existing estimated 2007 revenue impact is €141 million and this will, in effect, reduce the scope for other service developments, I am sure you will agree that it is imperative for the HSE to clarify the additional revenue funding required for each individual project that cannot be met from existing revenue base, and to take full account of the revenue implications in deciding what projects to progress in 2006," Mr Scanlan said.
The phase 2B development at Mullingar, which has been planned for many years, is a multi-million euro upgrade of existing ward and theatre facilities. The development at Beaumont would entail constructing a new building to provide a significant increase in the number of dialysis places.
