HSE faces ‘once-off’ €100m bill over bailout

THE HSE could be facing a “once-off” €100 million expense as a direct result of debt payment changes detailed in the EU/IMF deal.

The move, which is likely to affect money available for frontline services, has been caused by a significant reduction in the amount of time the health service has to repay costs.

These include the procurement of services and medical equipment from private firms, among other issues.

Under the pre-bailout situation, the HSE and other Government agencies had 35 days to repay any outstanding debts, unlike ministerial departments which had 15 days.

However, under the new deal — which the IMF and EU hope will bring a tighter control on state costs and late repayment issues — bodies like the HSE will come under the 15-day rule.

Speaking to trade publication Irish Medical News, the HSE’s national director of finance, Liam Woods, confirmed the “once-off hit” of between €80m-€100m is now expected to bring costs into line with the new practice.

Under the previous system this money would have been paid over a longer period, giving rise to criticism that the mooted new time-scale will put an already under-pressure service under even more short-term strain.

“This would take some money from public services,” he said, adding that implementing the move immediately — as has been requested — is likely to prove “challenging”.

“If there was a single integrated payments system, this would be easier,” Mr Woods said.

Last year the HSE was forced to pay €858,000 in late payment interest on its debts at a rate of 8% per annum — a scenario which is now seen as an unnecessary drain on the system.

While those in charge of the health service have not yet opened formal discussions on the new move, it is likely to be introduced in the coming weeks as part of the details of the bailout deal.

The new repayments system could prove unwelcome for a service that has already been struggling to keep its expenditure in check.

Coming into the final quarter of this year, the HSE was still more than €26m in debt despite a series of strict money-saving measures being introduced.

Among the most pressing financial overspends at the time were in the primary care reimbursement service, which pays doctors and other medics who provide services under the medical card system and other schemes. The number on these schemes — established to ensure those in financial difficulty can access healthcare — has drastically increased since the economic crisis.

Other high spending which helped push the HSE’s expenditure over initial projections for the end of August included a €108.2m deficit in the hospital sector, 27.7m deficit in the regional community services sector, and a major overspend in HSE West.