THE HEALTH Service Executive (HSE) is considering either additional cuts in services or scaling back on allowances paid to staff in a bid to tackle a further deterioration in the financial position for the year.
The board of the HSE was told last week that management believes it faces having to generate a further €200 million in savings.
Informed sources said at the time of the publication of its service plan earlier last month, the HSE had signalled that there were risks that it could need to produce about €400 million in further savings this year depending on how trends in its value-for-money and spending programmes progressed.
This meant that overall it was facing potential cutbacks in total expenditure of about €900 million this year.
It is understood that management now believes that given projected higher expenditure on medical cards and demand-led drug schemes in the months ahead and lack of progress in areas in drug and pharmacy costs, the figure for further saving was now crystallising at about €200 million.
At the time of the service plan publication last month, senior HSE sources said the additional cost-containment measures could be needed if the €100 million in savings earmarked to be generated by the abolition of the automatic entitlement to a medical card for those over 70 were not realised and if the reduction in payments to pharmacists originally introduced last year were not restored.
The Government has already put in place a new fee structure for GPs treating medical card patients over 70.
However, a second initiative which aimed to look at economies in drug usage – on foot of a report produced last month by Dr Michael Barry of the National Centre for Pharmacoeconomics – is still being considered internally within the Department of Health.
It is understood that one of the additional cost-saving measures under consideration by the HSE is scaling back on allowances paid to staff.
It is understood that the HSE spends about €160 million in areas such as “acting up allowances” or “dual responsibility allowances” where staff either take on the role of a higher grade or two positions at the same time.
Alternatively, the HSE is proposing further cuts in services around the State.
It is understood that no final decision has been taken by the HSE on further cuts or on scaling back allowances.
It is understood that senior HSE figures are to hold talks with the Department of Health on the issues in the near future.
The HSE recently reached a framework agreement with unions on how to deal with proposed work practice changes aimed at saving more than €320 million this year.