Hospitals asked to identify further cutbacks

HSE warns of potential €104 million financial deficit with corrective action

The HSE has asked hospitals and community services to identify further cutbacks to offset projected cost overruns.

The director general of the HSE, Tony O’Brien, said that based on financial data up to May of this year, the organisation faced a potential €104 million deficit “without corrective action within the remainder of our community services and in particular hospital services”.

He told the Joint Oireachtas Committee on Health and Children yesterday that hospital and community services in the HSE "have been formally requested to identify additional cost-containment measures to safely bridge any projected direct services deficit".

“Assuming that approval will be given to utilise once-off surpluses – including potential pension and time-related savings – the expectation is that direct services will substantially deliver within the allocated resources.”


Time-related savings
Time-related savings effectively involves funding allocated for particular purposes but which for various reasons is not spent by a particular time of the year when cuts are being considered. Last year, money originally earmarked to pay for new posts in the mental-health services were actually used to offset the HSE's financial deficit in the autumn.

Minister of State at the Department of Health with responsibility for mental health Kathleen Lynch told the committee yesterday she had received assurances in writing that the money allocated for these development posts would be spent this year on those positions and on nothing else.

Mr O’Brien said the HSE, in income and expenditure terms, was reporting a year-to-date deficit of €49.34 million to the end of May.

Haddington Road

He said the HSE’s national service plan for the year had been based on generating savings of up to €9 million a month from May onwards on fees paid to health service contractors such as GPs and pharmacists.

These formed part of cuts introduced by the Government under financial emergency legislation.

He said these savings would now only be realised from August.

Mr O’Brien also described as “complex” the validation exercise currently under way to assess in detail how much the new Haddington Road agreement would realise in the health service. The HSE’s finances for this year are based on generating savings of €150 million.

Mr O’Brien also signalled that the HSE would not “look favourably” on any service providers in receipt of funding from it who put clients “in the front line” as part of rows with the organisation over budgets.

Martin Wall

Martin Wall

Martin Wall is Washington Correspondent of The Irish Times. He was previously industry correspondent