THE BOARD of the Health Service Executive is to meet in special session on Monday to consider a significant deterioration in the organisation’s financial position.
The Irish Times understands the HSE has forecast it is now facing a potential deficit of more than €1.1 billion this year. This is significantly higher than the €700 million overrun that the organisation forecast several weeks ago.
Board members have been told there was a dramatic reduction of nearly €30 million in income generated by the health levy in January. It is understood the HSE has forecast this could lead to an overall loss of income of some €280 million by the end of the year.
In addition the HSE’s finances have been hit by the cost of providing medical cards for the tens of thousands of workers who lost their jobs in January. Each medical card costs about €1,650.
Responding to queries about the special meeting yesterday, HSE national director of communications Paul Connors said the current economic environment was having a significant impact on its funding levels. This was a “unique situation which required unique measures” but ultimately the goal of the HSE was to protect services.
The HSE board is expected to consider a number of options for dealing with the financial difficulties. It is believed one of these would involve cutbacks in non-core pay for its 113,000 staff while another would see significant cutbacks in services.
The Cabinet sub-committee on health is likely to be briefed on the HSE’s new financial difficulties and the proposed remedial action at a meeting next week.
Among possible measures to be considered at Monday’s board meeting is the introduction of cutbacks in payments such as allowances, premium rates and overtime for staff.
However, such action could pose significant industrial relations problems for the HSE as staff are already to be hit by the Government’s new pension levy.
The HSE currently pays out more than €1 billion annually on such non-core pay for staff.
Another alternative for the HSE is to make significant cutbacks in relation to services in hospitals and in the community.
Asked yesterday whether the HSE would consider closing hospitals, Mr Connors said that many courses of action would have to be considered before any such action would be looked at.
Before the recent sudden fall-off in income from the health levy, the HSE was already facing a potentially serious financial position this year.
The HSE had generated €280 million in value-for-money savings last year and has said that it needed to repeat this again this year in addition to €250 million in new efficiencies.
It was also facing a potential loss of more than €100 million arising from the failure of measures to cutback on payments to pharmacists last year.