Hospitals to face deficits even after supplementary fund of over €1.1bn is paid out

HSE chief financial officer Stephen Mulvany said the Department of Children, Equality, Disability, Integration and Youth provided separate disability services supplementary funding. Picture: Brian Lawless

Hospitals will face budget deficits — including almost €28m in one case — even after a supplementary fund of over €1.1bn is paid out, the HSE chief financial officer has warned.

Stephen Mulvany has written to hospitals and other groups in the HSE saying “once-off supplementary funding for 2023” is being made available.

In a memo on April 19, seen by the Irish Examiner, he said the fund was divided among hospitals and bodies funded under the Section 38 agreement based on factors including “management of funded recruitment and agency/overtime costs”.

Section 38 arrangements involve organisations being funded to provide services on behalf of the HSE.

The document shows Cork University Hospital had a budget of €428,626,000 for last year but spent €535,654,000. 

Once it receives the extra funding, it will still face a residual deficit of €27.6m.

University Hospital Limerick had a budget of €383,102,000 but spent €443,323,000, and will still face a deficit of €20.5m for last year.

University Hospital Waterford spent €341,051,000 last year against a budget of €272,150,000, and will face a shortfall of €22.6m.

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A number of voluntary hospitals also face significant debts, the document shows. 

These are hospitals such as the Mercy University Hospital, which receives a significant proportion of HSE funding, but are run by boards or private bodies.

The Mercy had a budget of €127,924,000 last year but spent €146,248,000 and after the supplementary money is allocated, will still face a deficit of €3.5m.

Children’s Health Ireland (CHI) faces deficits of varying sizes at each of its sites. 

CHI at Crumlin faces the largest shortfall even after supplementary funding is allocated at €6.1m, with CHI Headquarters also facing a shortfall of €599,000.

St James’s Hospital spent €576,197,000 against its budget of €510,085, and after its supplement is received will still face a deficit of €20.4m for last year alone.

Mr Mulvany also said the Department of Children, Equality, Disability, Integration and Youth provided separate disability services supplementary funding. “This was sufficient to address all bar 2% of the reported 2023 deficit,” he said.

A HSE spokeswoman said: “As discussed in the memo, the in-year net deficit per the draft revenue income and expenditure position exceed the additional once-off supplementary funding provided.”

The overall HSE position for last year, she said, includes the financial position of voluntary partners within the hospital and community sectors.

It comes as a group of 19 voluntary hospitals and hospices warned of challenges in their relationship with the HSE which could negatively affect patients.

These include “a failure to fund capital developments, poor engagement levels and unnecessary administrative burdens”, the newly-formed Irish Voluntary Healthcare Association (IVHA) said.

The group includes the Mercy, CHI, the National Rehabilitation University Hospital, and the National Maternity Hospital as well as the Central Remedial Clinic.

The IVHA said 65% of their chief executives are “more pessimistic” about the health system than this time last year.

Some 44% think healthcare is not heading in the right direction, with just 22% confident that Slaintecare can have a positive impact.

At the launch, chair Liam Dowdall said 40% of the HSE hospital budget is spent on voluntary hospitals, and called for their input to be recognised.

“There is room for improvement in the relationships between the HSE and hospitals with only 44% of hospitals citing a positive working relationship,” he said.