HOSPITALS that fail to meet ambitious new targets on waiting times will suffer cuts to funding under a new scheme rolled out by Government.
Health Minister Leo Varadkar will effectively fine any hospital that does not meet the goal of reducing waiting lists to 15 months by the end of this year.
Officials in the HSE and Department of Health thrashed out a new agreement in recent days to divert funding for procedures to hospitals that perform best. Mr Varadkar is also providing an extra €25m in funding to help incentivise hospitals to make progress on cutting waiting times.
It represents a new carrot-and-stick approach to try and tackle the problem that has crippled hospitals for decades.
"The HSE will institute a system of financial penalties for hospitals which don't keep to the maximum permissible waiting times.
"Failure to maintain waiting lists (below the target level) will result in them facing financial penalties," one source told the Irish Independent.
It is understood the bulk of this money will go back into public and voluntary hospitals to maximise use of their facilities and minimise outsourcing to private hospitals.
About 20,000 patients have recently been offered treatment in private hospitals, because of lengthy delays in the public health system.
But this new scheme will keep money within the public system - incentivising hospitals that meet targets while acting as a deterrent for those that do not. The radical move is part of an ongoing effort to reduce long waiting lists for inpatients and outpatients, for both clinic appointments and surgery.
Hospitals had a goal to cut maximum waiting times to 18 months by June this year, which officials insist was largely achieved, although some outsourcing was involved. An official said overall performance showed 99.6pc achievement of the 18-month maximum permissible wait time.
The next goal is to get waiting times to 15 months by the end of this year. As part of an effort by Mr Varadkar to ensure waiting times do not again slip backwards, the new penalty scheme is being introduced.
The finer details of the penalty scheme are now being worked out by the HSE after agreement in principle between it and the Health Department was achieved last week.
The plan is to divert the funding for individual procedures and appointments away from non-performing hospitals to a hospital where the procedure or appointment can be done.
A source said: "The aim is to benefit patients across the board. You might have some movement of patients but the idea is to get all hospitals treating more patients more quickly."
A wide range of non-urgent procedures are covered by the new targets. These include knee and hip replacements; eye, ear, nose and throat; urology; gastroenterology; cardiology; gynaecology; and other general medicine treatments.
"The financial penalties will be calculated according to the cost of individual procedures or appointments," said the senior health sector source.
However, exceptions will be made where there are acknowledged challenges for meeting waiting times, in a small number of specialised areas.
"It may not be possible to completely meet the maximum waiting times because there may not be enough adequately trained specialist staff to do the work," the source added.