Current funding model is ‘not keeping pace’ with the increasing demand and complexity of hospital services, Mater CEO tells Oireachtas committee
Funding proposed by the HSE to run the Mater Hospital this year falls €17 million below its overall spend in 2025, despite the facility forecasting a growth in the number of patients it sees in the coming months.
The CEO of the Dublin-based voluntary hospital said that it has yet to sign a service level agreement with the HSE for 2026 funding, and told an Oireachtas committee that the current funding model is ‘not keeping pace’ with the increasing demand and complexity of its services.
“The HSE Annual Service Arrangement process with its single year focus is in need of reform,” said Josephine Ryan Leacy.
“Negotiations frequently begin from the previous year’s baseline, despite clear growth in demand and activity.”
She told the Public Accounts Committee: “There is a strong case for moving to a multi-annual, activity-based funding model, linked not only to volume but also to patient complexity, acuity, age profile, and national referral responsibilities.
“This would provide greater transparency, improved multi-year capacity planning, better value for money, and improved accountability.”
The Mater’s chief financial officer Adam O’Hare said that the HSE has proposed funding of €597 million for the Mater in 2026 – €17 million less than the hospital’s 2025 costs.
As a result, the Mater has yet to sign off on a formal agreement with the HSE on funding for this year. Similar disagreements over the level of funding the hospital required meant that 2025’s service level agreement was only finalised in November of last year.
Ms Ryan Leacy disclosed that, while the Mater broke even in 2025, it has an ongoing deficit of €48.7 million. Fianna Fáil TD Albert Dolan pointed to a report from the hospital’s auditors which warned that accumulated debts were so large that the hospital were ‘at risk of trading recklessly under company law’.
“We cannot build on the £48.7 million deficit that’s there,” responded Ms Ryan Leacy. “What we wanted this year was a hope that we would start off with what we had forecast as a budget, that there would be discussions of how we would get as near to that, and then what we would have to do is map our service accordingly with that.”
Also addressing the Committee, CEO of Tallaght University Hospital Barbara Keogh Dunne said that her hospital projects a projected running cost of €471 million, fuelled by projected rises in demand for care as well as rising inflation and wages. The hospital also carries a historical deficit of €25 million.
However, the HSE has proposed funding for the year of €438 million, which was the cost of services provided in 2025.
She said that, in the first three months of this year, TUH saw a 12 per cent increase in ED attendances compared to the same period in 2025. Admissions from ED also rose six per cent.
The meeting also heard from head of the National Treatment Purchase Fund (NTPF) Fiona Brady, who discussed plans to end by June the practice of third-party insourcing – the use of external companies to use spare capacity in public hospitals over and above core hospital activity, in order to get public patients treated faster.
She said that other forms of insourcing involving existing staff being paid overtime, or the hospital hiring new staff funded by the NTPF, will remain in situ.
Nine public hospitals have used NTPF funding for third-party insourcing, Ms Brady told the committee. Out of the €69.1 million spent on insourcing last year, €23 million went to external companies.
“We’ve reduced our insourcing funding significantly this year, in line with the public-only consulting contract,” she said.
“We’re very aware that the hospitals are looking for more productivity from the consultants in that regard and we’ve reduced our insourcing to €48 million this year. A third of that would be third-party insourcing – only till the end of June.”
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