HOSPITAL COST OVER-RUNS:SOME OF the highest cost overruns in spending by hospitals last year included those at the Adelaide Meath (Tallaght), Sligo General, Mayo General and Our Lady's Children's Hospital, Crumlin.
Tallaght exceeded its budget allocation by €15,971,000 or 7.6 per cent; Sligo General went €10,884,000 or 10 per cent over budget; Mayo General overspent by €10,744,000 or 14.8 per cent and Our Lady's Hospital overspent by €9,952,000 or 7.8 per cent.
The CAG said interviews with hospital managers revealed a number of reasons for failures to remain within budget.
These included: "A belief that the budget as communicated to the hospital is flexible because past experience had shown that further money would become available during the year, that if budgets were exceeded the hospital would not be penalised and that by adhering to the budget the hospital would lose out to other parts of the system which ignored the rules."
There was also a view that the level of funding was "incompatible with the role that the hospital believed it was mandated to discharge". They also held the view that "any action taken to keep within budget that impacted on patient services would not be accepted by senior management".
"Previous experience suggests that managers had grounds for believing that the initial allocation of funding was not the last word," the CAG report said.
It pointed out, for example, that in 2006 the initial budget allocation to Tallaght hospital was just over €196 million, but the final allocation was closer to €203 million.
"The [HSE's] accounting officer noted that there was no doubt that prior to the establishment of the HSE, additional funding had been made available to the health boards and the Eastern Regional Health Authority during the financial year, and often in December.
"This acted as a perverse incentive and encouraged a 'wait-and- see' attitude among managers who behaved accordingly."