News Analysis

Thursday 18 September 2014

Watershed moment for controversial public sector top-ups

CRC pay levels stink, but so do those in a host of taxpayer-funded institutions, says Daniel McConnell

Published 26/01/2014 | 02:30

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Master of the National Maternity Hospital Dr. Rhona Mahony
Master of the National Maternity Hospital Dr. Rhona Mahony.

As the Public Accounts Committee (PAC) continues its investigations into the embattled Central Remedial Clinic (CRC), attention is now beginning to drift toward those other voluntary hospitals that are in breach of government pay rules.

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Come next Friday, some of the country's most prominent medical chiefs including Dr Rhona Mahony of the National Maternity Hospital, Holles Street, and Dr Sam Coulter Smith of the Rotunda Hospitals will have to prove their institutions are compliant or risk having their funding cut.

Under Section 38 of the Health Act 2004, which includes both health agencies and voluntary hospitals, such bodies "may not supplement approved rates of remuneration with either Exchequer funding or non-government sources of funding". According to the Health Service Executive's damning internal audit report, just seven of 42 voluntary hospitals who last year between them received €2.6bn in taxpayers' money are abiding by the rules. Just seven!

Those operating within the legally binding pay scales are KARE Central Services Newbridge (which received €14.9m last year), St John's Hospital Limerick (€19.8m), St Patrick's Centre Kilkenny (amount not disclosed), The Children's Sunshine Home Foxrock (€3.8m), Mercy University Hospital, Cork (€64m), Sunbeam House Bray Co Wicklow (€19.5m) and the Incorporated Orthopaedic Hospital Clontarf (€7.5m).

The other 35 institutions, including some of the country's largest hospitals – the Coombe, the Rotunda, the National Maternity Hospital, Holles Street among them – remain in breach of the stated pay policies.

The HSE has given these non-compliant hospitals and agencies until next Friday to get into line or risk having their funding cut.

While much of the public and political attention in the past few weeks has centred on the CRC, next Friday's deadline will once again bring the defiance of these other institutions back into the spotlight.

Of those 35 agencies found not to be in full compliance with the rules, 23 of them were found to be in partial compliance with the rules but with a few exceptions here or there.

Included in this bunch is the Mater Hospital and the under-fire St Vincent's Healthcare Group (St Vincent's Public and Private Hospitals and St Michael's Hospital, Dun Laoghaire) which received €231m in public funding last year.

Its chief executive was forced to reveal on December 23 that he is paid €292,669 a year. Nicholas Jermyn said his salary of just under €300,000 is made up of €136,000 from the HSE, €136,500 from a privately funded salary, plus a car allowance of €20,000.

At a recent meeting of the PAC, Mr Jermyn and his chairman Noel Whelan said the hospital was locked in a dialogue with the HSE to bring it into line with the approved salary scales.

Twelve others were found to be "confirmed as non-compliant" and in full breach of the HSE's clearly stated pay rules.

They are: Dr Mahony's National Maternity Hospital, Holles Street (which received €45m in State funding last year), Dr Coulter Smith's Rotunda Hospital (€46m), the Coombe Women's Hospital (€49m), Adelaide & Meath/Tallaght Hospital (€218m), St Michael's House Ballymun (€74m), Cappagh Hospital (€24.7m), The Dublin Dental School and Hospital (€6.2m), Carriglea Cairde Services (€8.8m), the Royal Hospital Donnybrook (€19.2m), the Muiriosa Foundation Kildare (€42.2m), Our Lady's Hospice Harold's Cross (€29.3m), and of course the CRC (€16m).

But let's examine a couple of the higher-profile institutions that are in breach.

Starting with Holles Street, Dr Mahony is one of four managers in receipt of an externally funded "top-up" allowance. Her allowance has been confirmed at €45,000. She had denied it was a top-up, insisting it was income from private patients. However, the HSE strenuously insisted that at no stage was this description given to it about her top-up.

Dr Mahony gets a basic salary of €170,541, down from €183,562. She also gets a Master's allowance of €48,174, a privately funded extra payment of €45,000 and on-call allowance of €321, bringing her total salary to €264,036.

At the Rotunda, Dr Coulter Smith's basic salary was €170,541. He gets an allowance of €49,545 and a privately funded extra payment of €20,000. This brings his total salary to €240,086.

Next to the Coombe Maternity Hospital, where two senior managers are getting salary top-ups, one of which is worth €26,000.

The maternity hospital admitted to the HSE that it was not complying with public pay policy, even though it was seriously in the red.

The top-ups were being funded from rental income from its private clinic, and not charitable donations, fundraising or the operation of patient facilities.

The Coombe's master, Dr Sharon Sheehan, and the secretary and general manager were not getting any top-ups, it has emerged.

The Adelaide and Meath Hospital at Tallaght, said it ceased top-up payments to senior staff members in 2010, after it was revealed that approximately €700,000 was paid out from public funds to five senior staff members there between 2005 and 2010.

The HSE clearly disagrees as it has listed Tallaght as one of the 12 fully non-compliant Section 38 institutions. The audit report found that the hospital was still paying health insurance for one senior manager, additional responsibility allowance to five senior managers while five others have been paid allowances for their roles as clinical directors.

While much of the focus to date has been on the CRC, members of the PAC like Eoghan Murphy and Simon Harris are keen to pursue the entire sector to ensure that the taxpayer is protected.

"We have started a process. We must allow the HSE do its work but I want to see it concluded and ensure that proper compliance is delivered upon," Mr Murphy said.

Next Friday's deadline represents a real watershed moment. If the hospitals and agencies fall into line, then the HSE, the PAC have done their job and protected the taxpayer.

If they don't, then they risk losing part of their funding. If that happens, then they will only have themselves to blame.

Irish Independent

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