There are growing concerns within Government that spending in the health service is out of control. New figures indicate the HSE is set to record a deficit of more than €80 million and potentially close to €100 million in the first three months of the year alone.
It is understood that the HSE has argued that the additional spending came about as a result of dealing with the trolley crisis and increasing numbers of older people presenting at hospitals.
The HSE is understood to have maintained that there has been a 17 per cent increase in the number of patients over age 75 presenting at some hospitals, and that demand in general has risen by about 6 per cent on average year-on-year.
A value-improvement programme which was put in place in the official health budget for the year has, it is understood, not delivered the level of cost savings envisaged
Health service managers have also contended that expenditure increased as a result of the bad weather.
The HSE received a record €14.5billion from the exchequer this year, an increase of about €600 million. However even before the start of the year it was concerned about a potential financial challenge, and warned the Minister privately that this could ultimately reach over €800 million for the full year.
The HSE formally presented its report for the first quarter of the year to the Department of Health last week. Sources said it set out different figures based on different methods of calculation, but that the overrun was likely to be over €80 million. Another highly-placed source said it would more than likely come in at less than €100 million.
Cost savings
A value-improvement programme which was put in place in the official health budget for the year has, it is understood, not delivered the level of cost savings envisaged.
Another issue of concern for the Government is how to address the HSE's financial overrun from last year which under legislation must be offset as a first charge against expenditure this year
The HSE’s first-quarter financial results have set off alarm bells within the Government over recent days. Some informed sources said there was widespread awareness in the Department of Health that HSE overspending was running away, and that this was leading to some tensions between the two bodies.
One source said that there was fear in the Department of Health that the impending departure of HSE chief Tony O’Brien was loosening spending discipline in the health authority.
Sources said the health service financial overrun for the first three months was “higher than usual, and on course to be higher later in the year”.
Another issue of concern for the Government is how to address the HSE’s financial overrun from last year which under legislation must be offset as a first charge against expenditure this year.
There was no provision made for any such first charge in the HSE budget and service plan for 2018.
It is understood the HSE has now informed the Department of Health that the deficit for 2017 was in the region of €170 million. Sources said the Government was awaiting a technical finalisation of overspending in the health service for last year.
First charge
The Department of Health told The Irish Times that The HSE's outturn for 2017 had not yet been finalised. It said consideration of any first charge had been deferred pending finalisation of the figures.
“It is important to note that the full deficit, when finalised, will not automatically result in a charge on the annual financial statements of the HSE as any overrun in the voluntary [hospital] sector is not subject to the first charge on the HSE accounts that is provided for by law.”
