Skip to main content
Normal View

Seanad Éireann debate -
Wednesday, 21 Oct 1998

Vol. 156 No. 14

Adjournment Matter. - Tallaght Hospital Funding.

I address myself through the Minister's representative to the Minister because, while I do not dispute the intellectual calibre of the Minister of State, I would like if this material would be made directly available to the Minister.

As in all new enterprises there are difficulties.

In September 1997 a board meeting of the Adelaide Hospital was told there would be a ten year bedding down period for the whole hospital. That indicates they realised they were to some extent moving into uncharted territory. The same happened disastrously, in some ways financially, with the Channel Tunnel which went into enormous overruns which complicated the process.

There have been overruns in the Adelaide Hospital. However, a question I would address to the Minister is whether these overruns were due to folly in budgetary procedures by the hospital or because it was underfunded from the beginning. Even at the moment when we welcomed the commitment and support of the Government to the hospital I was supplied with detailed figures which suggested there was a strong possibility that there would be underfunding. I predicted we would be back in this House looking for extra funding before the project was under way much further.

There was an allocation this year of £57 million. The requested budgetary requirement is £67 million so there is a clear shortfall here. The anticipated overrun for the year carries various estimates, from £8 million to £15 million to £20 million. The reasons for these are multiple. The three clearest are, first, the fact that the cost of moving was greater than anticipated. This is a common feature of this kind of operation; second, there were commissioning costs attaching to the hospital, and, third, there were sums for additional equipment. The first two are non recurrent items of expenditure and they have been incurred. That is an important point. It is necessary that the hospital be in a position to discharge its debt and liabilities in these areas.

The expense of running the new hospital has proved to be much greater than running the three base hospitals, and will continue to be so. Its operational costs are higher. When I discovered this it struck me at first as rather curious because the lay person would assume that if one amalgamates three separate units into one large unit one gets greater efficiency, greater concentration of resources and one does not need duplication of expensive plant and equipment. One would also assume there was an economic argument to indicate it should be less expensive to run such an institution. Apparently this is not the case and it is something which Deloitte and Touche will presumably investigate. It will be very useful to find out if they can give further specific reasons for this, although I understand that some of the reasons are increased security, the ward structures and so on.

The practical experience of this merger indicates that the attempted merger in the early 1960s between Trinity College and UCD might have also been rather problematical. It was presented as a cost cutting exercise. Now, with this sophisticated move, it is being learned that it is not always the case that merging smaller institutions into a larger one saves money.

The hospital now has a different and huge catchment area. I hope the Minister of State can assure the House that the instructions to Deloitte and Touche are not merely to whip the Adelaide Hospital into line. Reading the answer to the question tabled by Deputy Shatter in the Dáil, it appears the Minister examined the situation and told them to cut their cloth to suit their measure. They were to keep within the budget regardless and were to revise operational plans accordingly. I am not sure this is a good idea. We should keep an open mind as to the cause of the overrun. Was it underfunding, management error or a combination of the two? I assume the exercise of Deloitte and Touche will determine this. It is important its report be made available to the hospital and to the House. Will the Minister give an undertaking this will happen?

A previous report was commissioned by the Minister and Mr. Leslie Buckley and Mr. Tom McCarthy were sent to the hospital earlier this year before it opened to examine the situation. I presume the Department received the report, so can it be made available? Is it true that the suggestions, of which I have been apprised, are favourable to the hospital budgetary position? The bottom line is that the hospital must be strongly supported and must continue to function.

There is apprehension. In a letter dated Wednesday, 21 October 1998, in the newsletter of the Adelaide and Meath Hospital, Pulses, Mrs. Rosemary French, chairman of the hospital, indicated she was aware there were rumours circulating and wanted to put people's minds at rest. She said:

Figures in recent newspaper reports regarding how much money the Hospital needs are not official figures. The exact figure has yet to be determined. [This presumably is part of the exercise of Deloitte and Touche. ]

As you know, before we opened, many costs arose in preparing this Hospital for patients and for staff. Also, closing and moving the base hospitals to Tallaght was a huge task, and not least in financial terms. In addition, running costs are higher here than they were between the three base hospitals because it is a larger site with bigger cleaning, security, etc., bills.

I believe the expense to be justified and I hope to have time later to put on record the strongly positive attitudes of both medical staff and patients to the high standards of facilities, to the fact that it is wheelchair friendly and to the existence of ordinary human aspects, such as the intrusion of sunlight into a room. People do not feel they are in a corner. Every room has its view. There is a garden which can be enjoyed by people, even though they are ill. Although they are expensive, they are well worth having and will certainly make patients feel better. Mrs. French further stated:

These costs are being examined and allocated to either the Hospital or to the Tallaght Hospital Planning Board. When it has been decided who should pay each of these costs, we will then know the extent of any over-spend by the Hospital.

The Adelaide has the site in Peter Street and questions have been asked whether this should be realised to make good the shortfall. That is an understandable view of the Minister's but I understand it was already examined and undertakings given that it would not happen. It is important the Adelaide, having realised the value of the site, should have it as a contingency fund to continue to upgrade the medical services of the hospital. Otherwise, there will be an absolute dependency later on the Department. Mrs. French further stated:

Deloitte & Touche are reviewing the Hospital's financial situation with a facilitation group from our Hospital and the Department of Health & Children. We expect their report by the end of next week. Three of our Board members, Cllr Gerry Brady, Mr Salters Sterling and Prof David McConnell, are representing the Hospital.

Gerry Brady was a colleague in the Lower House; I know Salters Sterling from Trinity.

In the Irish Times of 23 October 1996, concern was already being expressed about facilities, that there may be a reduction in the number of beds and that there may be a little cheese paring. Indicating the type of problems experienced in the move, the headline in the Irish Times of 2 June 1998 read “Senior doctors may seek £700,000 for Tallaght move” because of inroads into their consultancy base, etc. Not only anaesthetists, surgeons and other high earners but also some of the other staff put in claims for disturbance money for movement, etc. There were the usual teething troubles: rooms were built to an incorrect design and operating theatres had to be demolished and rebuilt.

However, I wish to put on record the positive side I mentioned earlier. Another headline in the series of articles read: "Move from 'black hole of Calcutta' is popular":

Dr Des O'Neill was succinct in his description of the ward where he used to treat elderly patients before the move to Tallaght Hospital. "It was like the black hole of Calcutta," he said of the ward in the Meath Hospital.

Speaking of the new conditions, he said:

"It is phenomenally better. There is more space, it is brighter, the therapy rooms are wonderful and the garden is already a big hit with the patients,"

It was well worth spending the money to give citizens who are ill, unwell or feeling miserable a lift by giving them decent surroundings.

Although these are large sums of money and one cannot always assume the Celtic tiger will have a back strong enough to carry the demands placed upon it, as always with such big projects, there is a spin-off for the local community, which is a second positive aspect. Tallaght has traditionally appeared or been presented as a depressed area although it is a beautiful location.

An Leas-Chathaoirleach

The Senator is heading to intensive care time.

I am temporarily bereft of words. It is worthwhile noting that up to 2,000 jobs will be created through the hospital in the Tallaght area. That is important.

Taking into account that hospitals such as St. James's, have operating budgets of £67 million, the requirements of the Adelaide are reasonable and I hope the Minister looks upon them favourably. The most important thing is that the hospital should be assisted to function in the interests of citizens in its new role of serving this huge catchment area.

The Adelaide and Meath Hospital, Dublin, incorporating the National Children's Hospital decided in November last year that it would open the new hospital at Tallaght on 21 June this year. The Minister for Health and Children, Deputy Cowen, was glad when the board of management informed him of this, and due allowance was made for the move in finalising the determination of the hospital's revenue funding for 1998.

In addition to the capital funding to cover the building, equipment and information technology needs of the new hospital, the Department provided funds in recent years to the base hospitals involved in the transfer to Tallaght to allow them prepare in advance for the move. This year's revenue determination to the hospital is £53.659 million, which includes an additional £5.9 million on the funding given to the base hospitals for their non-Tallaght related activity in 1997. The hospital has received Exchequer funding of £8.7 million since 1996 to facilitate the opening at Tallaght on 21 June. In addition to the £53.659 million stated above, £3.7 million has been provided to the Federated Dublin Voluntary Hospitals, the bulk of which is related to the Adelaide and Meath Hospital, Dublin, incorporating the National Children's Hospital. This brings the total to £57.4 million revenue funding for the year.

As the Senator will understand, some of the funding is provided on the basis of a six month cost as the move to Tallaght only took place half way through the year. The hospital was not expected to fund any of the industrial relations costs associated with the move to Tallaght from the above amount of £57.4 million. Additional funding of £2 million was also provided by the Department for this, as has been alluded to already by the Senator.

The Senator will be aware of the level of support provided by the Department in recent years, both financial and non-financial, which the Department and other health agencies in Dublin gave to the move to Tallaght. I wish to state on the record again the Minister, Deputy Cowen's, appreciation of the support given by the Eastern Health Board, the other major acute Dublin hospitals, the Tallaght Hospital board and the trade unions. He is particularly grateful for the enormous effort made by the staff of the hospital at all levels to ensure the smooth and safe transfer of patients and services to the new hospital at Tallaght.

Recently, the board of management of the hospital confirmed to the Department that there are difficulties facing it with regard to its budget. These difficulties are of a much greater degree than it had envisaged when it submitted its service plan in April of this year.

It is vital to note that the original financial plan submitted by the hospital to the Department in January, almost two months after the allocation was notified to it, gave no indication whatsoever of severe financial difficulties. At that stage, the hospital's budget indicated a potential overspend of approximately £900,000 and the hospital management undertook to take the necessary corrective action.

The hospital reported a major deficit of £2.4 million in its revenue costs for the month of July alone this year and it is projecting that a significant element of this will be recurring for the remainder of the year.

The Minister is extremely concerned at the degree of the hospital's projected deficit for 1998, which has been presented, and the reasons given for the overrun. With the agreement of the board of management, he initiated a review to be carried out by consultants Deloitte and Touche. They were able to commence their work very quickly and they plan that the review will be completed within three to four weeks.

This review is concerned with the arrangements for service planning and budgetary matters. I am glad to say that the hospital is co-operating fully with the review and the Minister will make available the report and any recommendations to the board of management of the hospital, as has been requested by the Senator.

The Department will have further discussions regarding this serious situation which has developed with the hospital's board of management when the Deloitte and Touche report comes to hand.

I thank the Minister of State for his reply. I have a strong feeling that there is no point in budgeting on an historical basis. The hospital needs a rolling budget. I hope Deloitte and Touche will not be confined simply to investigating a very narrow area but that they will look at the appropriateness of the budgetary parameters set by the Minister as well as looking at the reality of the situation. The hospital is still not fully functional; even at this expense, only seven out of 12 theatres are working. There were 11 in the old hospital. Perhaps the Minister of State will consider those points.

An Leas-Chathaoirleach

I am sure the Minister of State will take your points into consideration.

Certainly, I will take them on board.

The Seanad adjourned at 8.5 p.m. until 10.30 a.m. on Thursday, 22 October 1998.