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Hospital boss defends €12m bank overdraft

THE €12m bank overdraft which Tallaght Hospital has been forced to secure is "prudent" and makes "good financial" sense, hospital chief executive Eilish Hardiman insisted. The cash is to provide patient services until the end of the year.

The major acute Dublin hospital got the facility from Allied Irish Banks to shore up an overspend which is already running at €10m.

It is unclear how many other hospitals are in the same position. But Beaumont, the Mater, St James and St Vincent's hospitals are already way over their budgets.

All voluntary hospitals are allowed by the HSE to seek bank overdrafts to meet cash shortages for the last quarter of the year because the HSE will not give them a bailout.


Ms Hardiman revealed Tallaght had a similar €12m overdraft at the end of last year, but only drew down €4m of the money, which they had to pay back in January this year out of their 2012 allocation.

She insisted the bank arrangement gave the hospital necessary "flexibility for cash pressures".

Ms Hardiman explained the benefits by citing the example of orthopaedic surgery, where staff and other costs had to be paid upfront at the time of surgery and could later be recouped from the HSE. Cash flexibility, she added, provided the funding for these kinds of procedures

The chief executive said the arrangement with the bank had to be viewed against a backdrop where the hospital had achieved a 6pc saving in their budget, despite a 9pc cut in the overall allowance for 2012.

During this time, there had also been a 5pc rise in the number of patients seen at the hospital.

Under a strategic plan being operated by Tallaght Hospital, they were able to see more patients by measures such as reducing the length of stay and admitting patients for surgery on the day of their procedure.

"We are working on a stability plan and making significant progress," she added.

The recent establishment of the new acute medical unit means 800 fewer patients have been admitted to the hospital.

But the latest desperate move comes against the likelihood of more and imminent cuts to frontline health services.

Tallaght is not the only hospital facing the end of 2012 with a huge deficit and the HSE's own finances have plunged €50m deeper into the red in the past month alone.

The HSE now has a deficit of €374m which is likely to hit €438m or more by the end of the year.

Department of Health secretary general Dr Ambrose McLoughlin and new HSE head Tony O'Brien refused to detail how they will make up the cash.