Ms Eil?sh Hardiman:

I thank the committee for the opportunity to address it today on CHI's financial statements for 2021 and to give an update on the commissioning programme for the new children’s hospital, including an extensive integration and transformation programme currently under way.

I am the chief executive of CHI. I am joined by Mr. Flanagan and Ms Lewis, who is charged with leading CHI’s efforts to be ready and able to move into and open the new children’s hospital.

We represent 4,845 people working diligently at the front line of healthcare in CHI at Temple Street, CHI at Crumlin and CHI at Tallaght, as well as in the CHI urgent care centre at Connolly Hospital. Despite often dealing with outdated and inadequate infrastructure, annually CHI treats 153,000 emergency department attendances, 26,000 day cases, 23,000 inpatient admissions and 15,500 theatre procedures.

The financial statements before the committee have been audited by the Office of the Comptroller and Auditor General for the year ended 31 December 2021. Notwithstanding issues like Covid-19 and the ransomware attack on the HSE, significant increases in activity were attained in 2021, plus, we opened the new outpatient and emergency care unit in CHI at Tallaght. As members will have read in our accounts, CHI returned a deficit of €2.3 million for 2021, compared with a surplus of €584,603 in 2020. This deficit related to statutory accounting adjustments made during the preparation of the financial statements. CHI achieved break-even on operational expenditure compared with the final HSE allocation provided for 2021.

The key drivers for the increase in HSE allocation of approximately €28 million in 2021 are: full-year funding in relation to service developments in 2020; significant new service developments across CHI in 2021; Covid-19 funding; funding associated with public pay policy implementation; and the implication of the reduced scope for private income generation. An increase in patient income of €2.7 million primarily reflects the return of increased patient activity and the reduced impact of Covid-19 when compared with 2020.

Total expenditure in CHI increased by €33 million in 2021. Of this amount, €20.6 million relates to pay expenditure including national pay restoration and increments, increased headcount related to service development funding, the full-year pay costs of prior years’ service developments and Covid-19 related costs. Non-pay expenditure increased by €12.4 million, driven by inflation. The main drivers of clinical expenditure growth have been in medical and surgical supplies and laboratory costs.

CHI notes the committee's correspondence of October 13, outlining its concern regarding non-compliant procurement processes. CHI is very aware of our duty to comply with procurement regulations when expending funds in the delivery of our mandated services. While CHI has disclosed amounts related to non-compliant procurement in our financial statements, significant progress has been made in this regard. CHI has worked since its inception to centralise procurement teams, implementing standardised processes and controls. In 2023, CHI went live with a single HSE-supported SAP finance system across all CHI locations, providing a single foundation system for contract, vendor and material management and the end-to-end procurement to pay cycle. While much progress has been made, we still face challenges in achieving 100% procurement compliance. Reasons for this include: the complexity and range of patient treatments across our 39 clinical specialties; significant challenges in facilities management, especially in CHI at Temple Street, and often urgent requirements to act and avoid impacts on delivery of services. While noting progress made, in the interest of transparency we continue to foresee a level of non-compliance in 2022 as we address these challenges.

As client to the National Paediatric Hospital Development Board for the new children’s hospital project, I welcome the opportunity to provide this committee with an update from CHI’s perspective. Once the development board hands over a fully completed building, CHI will complete whole hospital commissioning of the building for it to be operational to international standards. The commissioning team is currently implementing a detailed commissioning plan to ensure the safe opening of the children’s hospital on a shared campus with St. James’s Hospital. CHI has secured commissioning experts who have extensive international knowledge and experience of successfully opening digital hospitals and have commissioned 24 hospitals across the world.

A dedicated commissioning framework is being used to ensure day one opening success, with 171 workstreams to be completed before opening the children’s hospital. The hospital is being commissioned to international best practice to open a digital hospital by applying Joint Commission International, JCI, accreditation standards to the commissioning process. The cross-city clinical directorate model was implemented in 2023, which is CHI’s clinical and operational leadership model for the new hospital.

A detailed CHI staff engagement programme is in place to educate and involve our staff in the commissioning process. All areas of the children’s hospital will have agreed a scope of service for each department, service and function as part of this engagement process.

To get our state-of-the-art children’s hospital ready, there are significant interdependencies and complexities that need to be thoroughly planned, including alignment with go-live of the electronic healthcare record. To ensure safe services for children and families on opening the hospital, all staff will need to be familiar with the building and with new ways of working in a digital hospital. To do this, staff will receive training in their new teams, know how to use new equipment and will run scenarios such as running a ward, theatres and a helicopter landing. All of this activity will take place while 36,000 pieces of equipment are placed, installed and commissioned. It is a complex operation requiring meticulous planning. We have provided an update on operating theatres to the committee on 19 September, and I am happy to answer any questions on this.

CHI’s primary focus at all times is to deliver safe care to the highest possible quality. Our integration journey continues and by the time the new hospital opens, we will be one team with one set of standards and processes. We look forward to continuing to meet the needs of children and their families in our current hospitals, as we wait for the day when we can welcome them to the new children’s hospital; one which is nothing less than what they need and deserve.