Hospital group needs €3m a week to break even

The 10 hospitals in the south/south west hospital group will have to collectively generate €3 million every week this year in order to break even by the end of 2015.

This is against a backdrop of the group starting out with a budget worth €10 million less than what its hospitals spent last year.

The net budget for 2015 is €685 million, but the hospitals ended up spending approximately €695 million in 2014.

The deficit was offset by an end-of-year supplementary budget which allowed them to break even.

Pay costs for the group this year will amount to €584m and non-pay costs to €258m, representing a shortfall of approximately €157m. To overcome this shortfall, the group will need to generate approximately €3m per week.

The group’s chief operating officer Ger O’Callaghan said this should be achievable, that last year the hospitals had generated in the region of €2m per week.

He said income generation had been improving in the last six months and could be expected to improve further once all issues were ironed out with private healthcare insurers around charging private patients the full cost of a hospital bed, regardless of whether they stayed in a public bed.

This government-backed charging plan which was flagged some time ago led to the HSE issuing a memo to hospital managers late last year instructing them to charge people with health insurance whether they were in a designated private bed, a therapy chair or a trolley.

A Comptroller and Auditor General report had previously found that almost half of in-patients being treated privately were not paying the designated charge to the public hospital because they did not occupy a designated private bed.

Mr O’Callaghan said it had taken “most of last year to trash out issues with the insurers” and while the matter was “still not finalised” it “looks like we’ll be able to generate that money this year”.

Health insurance experts have warned the charges will lead to a hike in premiums for consumers.

Mr O’Callaghan said there were also savings to be made in use of agency staff, which cost the group in excess of €19.5m last year.

The biggest spend on agency was at Waterford University Hospital which spent more than €4.5m. A 23% Vat charge is in addition to agency fees.

“This year, part of the plan is to convert all these agency staff to permanent staff. We are paying a premium for agency staff and if we can move away from this we have the potential to reduce expenditure by three, four or five million euro,” Mr O’Callaghan said.

In addition to agency staff, the group spent €24.5m on overtime last year.

At €10.8m, Cork University Hospital (CUH) accounted for a substantial chunk of the overtime bill. Kilcreene Orthopaedic Hospital had the smallest agency bill, at €39,000 and the smallest overtime bill of €148,000.

HSE officials attending the HSE South regional health forum yesterday, where operational plans for 2015 in the south/south east were presented to councillors, downplayed concerns that Kilcreene was in danger of closure.

Gerry O’Dwyer, CEO of the hospital group, said while there may be some reconfiguration of services in the future following consultation, the hospital would not close.

More than 8,000 staff are employed across the group’s 10 hospitals which, between them, boast in excess of 2,100 in-patient beds and 382 day beds.