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Thursday 18 September 2014

Tallaght Hospital forced into €12m overdraft to keep treating patients

Eilish O'Regan and Fionnan Sheahan

Published 10/10/2012 | 05:00

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A MAJOR Dublin hospital has been forced to get a bank overdraft of €12m so it can continue treating patients for the rest of the year.

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Tallaght Hospital is getting the money from Allied Irish Banks to carry on after over-spending by more than €10m so far this year.

The 625-bed hospital will not receive any bailout from the Health Service Executive (HSE).

It could not be confirmed if other major hospitals are being forced to get overdrafts as well.

The HSE does allow for hospitals with cash shortages to get bank funds to tide them over the last quarter of the year.

A spokeswoman for the hospital said it is coping with a 5pc rise in patient numbers and a 9pc cut in its budget for 2012.

She revealed that they had a €12m overdraft facility in 2011 but only used €4m which was paid off last January. But the latest desperate move comes against the likelihood of more and imminent cuts to frontline health services.

The HSE's own finances have plunged €50m deeper into the red in the past month alone, hitting a huge deficit of €374m.

Department of Health secretary general Dr Ambrose McLoughlin and new HSE head Tony O'Brien refused to go into detail about how they will make up the estimated €438m they must now find if the HSE is to break even at the end of the year.

They both appeared before the Dail Committee on Public Accounts to be quizzed on the financial crisis facing the health service in 2012.

But both blocked questions relating to policy matters on proposed savings in areas such as the drug budget which are needed between now and end of the year to avoid hitting frontline services.

Dr McLoughlin and Mr O'Brien told the committee they were concerned to be attending the meeting when the accounts for 2012 had not been closed.

Both insisted they would not be able to comment on policy matters and to go into detail could affect negotiations and outcomes.

Asked what the current deficit is, Mr O'Brien said it stood at €374m at the end of September, up from €329m a month earlier.

Of this, €69m was due to a shortfall in collected cash. The HSE has already announced cuts of €130m, including €58m reductions in frontline services.

Chiefs

The two health chiefs made broad references to generating income from reductions in the drugs budget and better collection of money due from insurance companies.

Mr O'Brien said he believed it was possible to balance the books without going beyond the €58m already earmarked for frontline cuts.

However, although pressed to be more specific on where the money will be found, they both stonewalled and said if they went into details it would prejudice discussions and outcomes.

Meanwhile, the inspection team from the IMF, European Commission and European Central Bank is expected in Dublin this weekend for the eighth review mission of the bailout.

Although the Coalition is largely on track to meet all the overall budgetary targets for this year, the health overspend is still expected to be high on the agenda.

Budget

The Department of Health is almost certain to be over budget at the end of the year.

The IMF and EU are widely expected to be critical of the failure to implement reforms and keep the health budget on track this year.

The spending overruns in health are spread across a number of areas, including substantial additional spending on medical cards, hospitals and the disability sector.

At the moment, social welfare spending is also heading about €150m over budget, due to higher rates of unemployment.

Public Spending Minister Brendan Howlin yesterday briefed the Cabinet on preparations for the latest review.

The Government is "on target in the main, notwithstanding particular challenges", a spokesman said after the meeting.

Irish Independent

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