HSE seeks €500m savings in new plan

The Health Service Executive (HSE) is seeking up to €500 million a year in savings through new value-for-money initiatives across many of its services.

Savings produced on foot of the plan, which will run up to 2010, will be ringfenced and redeployed for frontline services.

Among the larger items set out in the value-for-money plan is a review of the primary care re-imbursement service which has an annual budget of around €2 billion.

The HSE said its primary, community and continuing care section would undertake a review of the usage of this money to establish potential savings.

There will also be a review of the community drug schemes, including the establishment of cost-effective mechanisms for the supply of drugs and medicines and non-drug items under the "hardship scheme".

There will also be a review of current arrangements for approving and reimbursing non-drug items under the medical card scheme. "A new structure and processes for appraising non-drug items for inclusion on the approved list will be put in place," the HSE said.

"In addition, the process of reviewing price with suppliers of non-drug items will be orientated towards a more formal competitive tendering process resulting in a more transparent and cost- effective approach to the reimbursement of such items," according to the HSE.

It will also seek to make savings on its contracts with the private sector and on its legal, electricity and telephone bills.

It will also implement the recent agreements on drug costs with the pharmaceutical industry which, it has already maintained, could lead to savings of tens of millions of euro a year.

The HSE said that there would be new tender processes for the provision of PET scanning services, radiotherapy and dialysis from the private sector to supplement the public system where necessary.

It maintained that the establishment of a list of preferred providers nationally in these areas would result in a more cost-effective procurement process.

The HSE is also to seek to aggregate its various contracts for the provision of medical and surgical devices.

It said this would facilitate the negotiation of a national contract in these areas in the future.

The HSE said there would also be a review of travel and subsistence expenses as well as an examination of telephone costs.

There will also be a review of the aids and appliances scheme nationally.

The HSE is also planning national tendering competitions for the supply of electricity and fuel, as well as for uniforms and equipment.

It said that it would consider the development of national maintenance and service contracts.

It is also going to seek a national tender for legal services which currently costs about €20 million a year.

The generation of value-for-money savings on its €14 billion budget has been an issue of major importance for the board of the HSE for some time.

It is understood that there was some concern on the board last year that this issue had not been addressed more promptly.

A new over-arching value-for-money group for the health service has been put in place.

The new group comprises the secretary general of the Department of Health, the chief executives of the HSE and the Health Information and Quality Authority as well as a senior official of the Department of Finance.

A senior official has also been appointed to the HSE to head up a value-for-money programme.