Hospitals collect income from a number of sources, including charges for public and private patients as provided for in legislation. They also collect income in respect of facilities such as rental of shops, car park charges and other sources.
Setting targets for income collection is a normal part of effective financial planning and management for any organisation. While rates for statutory charges are specified in legislation, there is in practice variation in performance among hospitals in the billing and collecting of charges and in raising other income. This has been commented on by the Comptroller and Auditor General in his Report on the Accounts of the Public Services in 2008, 2009, 2012 and 2014, where the scope for improved billing and collection was highlighted.
In practice, much of the income from private patient charges is recouped directly from private health insurers. In 2014, under the Health (Amendment) Act 2013, the scope of private charges was expanded to include all private patients accommodated in public hospitals and not just those in private or semi-private beds as previously. This was in line with long-standing Government policy to reduce the subsidy to private practice in public hospitals, something the Deputy would probably support. The Health Insurance Authority has identified that payment by private health insurers to public hospitals increased by €144 million between 2014-2015 and 2015-2016.
In 2016 hospitals were set income targets of €50 million or 5% over the normal year-on-year growth associated with increased activity. This recognised the scope for improved performance, particularly in respect of collection. The level set for each hospital group was: RCSI, €5.8 million; Dublin midlands, €7 million; Ireland east €7.9 million; south-south-west, €9.3 million; Saolta, €9.7 million; University of Limerick, €8.5 million; and the children's hospital group, €1.8 million.
Targets for 2017 are under consideration in the context of the approval of the national service plan and subsequent agreement of the operational plans for hospitals. The Department and the HSE engage in consultation with regard to the setting of the national budget for each service area as part of the Estimates process. The setting of budgets for individual hospitals and the hospital groups is completed within the HSE as part of a consultation process between the national directorate and the hospital group chief executive officers, CEOs, and formalised in operational plans for each group.