Voluntary hospitals, including some of the largest in the Republic, are asking the Government to provide “financial certainty” by allocating funding to cover a number of years — as it did recently with national broadcaster RTÉ.
Hospitals have also warned that new rules aimed at boosting cybersecurity in the aftermath of the hacking of the Health Service Executive three years ago, which are scheduled to be introduced in October, will come at a “significant cost” which is not accounted for in current funding levels.
The voluntary hospitals also maintain that collectively they are carrying deficits of about €340 million due to underfunding over several years.
“The scale of these deficits has raised significant liquidity concerns which the boards of the hospitals are forced to consider. Auditors of several hospitals have also sought assurances from the HSE regarding funding and liquidity, assurances which have not been forthcoming”, said the organisation representing the sector, the Irish Voluntary Healthcare Association.
Voluntary hospitals receive the bulk of their funding from the State and staff are considered to be public-service personnel. However, they are independent of the HSE and have their own boards.
Such hospitals include Tallaght, the Mater, St James’s, St Vincent’s in Dublin as well as the Mercy in Cork. Maternity centres such as the Rotunda, the Coombe and the National Maternity Hospital are also voluntary institutions.
The acute hospital sector receives funding of more than €7 billion from the exchequer annually.
St James’s Hospital will, for example, receive €496 million this year from the exchequer while Tallaght will have a budget of about €326 million.
However, in a submission to Government, the voluntary hospitals argued that the current system of providing a fixed amount of money every year — known as the block funding model — was no longer suitable.
“This model requires hospitals to manage all their activities, including staffing, medical services, equipment, and operational costs, within a predetermined budget. The model does not adjust for changes in patient demand, the introduction of new treatments, or unforeseen healthcare needs, and depreciation of capital assets leading to significant financial constraints and limiting hospitals’ ability to respond effectively to evolving healthcare challenges.”
In July the Government announced it would provide funding of €725 million over the next three years to RTÉ and voluntary hospitals are seeking similar arrangements. Ministers also provided additional funding to the HSE to cover the remainder of 2024 and 2025.
“The Government, in recent weeks, has provided budgetary certainty to RTÉ for a multiyear period. In doing so, the government has recognised the benefits of multiannual budgeting. We note the two-year settlement for HSE core expenditure but this has not translated into certainty for hospital budgets. We therefore call on the Government to provide the same commitment and support to those hospitals that treat 1.8 million people a year, as it has to the national broadcaster,” said the association.
“The budget for Irish healthcare is currently set annually as part of the central budget process. The funding allocation is cascaded down from the Department of Health to the HSE and, ultimately, to service providers including the voluntary hospitals.”
“This is a cumbersome process that creates practical and administrative challenges for every single voluntary hospital every single year.
“Hospital management teams are often forced to plan their annual expenditure and workforce requirements with no knowledge as to what their budget for the year will be. Many hospitals only learn their budget allocation several months into their financial years.”
