THE HEALTH Service Executive now expects to have to cut its expenditure by more than €900 million next year, which could see a wide range of extra services having to be curtailed.
In its 2009 service plan, published yesterday, the HSE states it had to save €280 million this year and this effort will have to be repeated next year, as well as it having to find an additional €250 million "by reaching new value-for-money targets and delivering a range of cost containment and management initiatives".
But the service plan was completed in October and, given the continued downward spiral of the economy since then, the executive said last evening it was now "dated" and it expects to have to save another €400 million next year, bringing the total amount it is likely to have to save in 2009 to €930 million.
Some of these additional savings will be expected to cover the cost of having to issue more medical cards than it had originally planned for next year, given the growing unemployment figures.
The HSE said health services are directly impacted by downturns with more people requiring medical cards and hospital services.
In addition, more people may let their private health insurance cover lapse, which would reduce the HSE's income from private beds in public hospitals next year.
"The HSE has identified that a possible additional up to €400 million of cost reductions may be required in light of the emerging situation," it said in a statement.
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 are not realised, if the reduction in payments to pharmacists originally introduced last year were not restored or if the €100 million cost of implementing the new national pay deal has to be met from within its own resources.
Sources said that it may also have to look again at the €120 million in funding earmarked in its 2009 service plan for the development of hospital services or accelerate the reviews of the configuration of existing services such as AE and maternity units.
The HSE is planning to draw up a contingency plan for such eventualities with the Department of Health over the coming weeks.
Unions had already been told in recent weeks that the HSE planned to achieve some of its savings next year by closing 600 additional beds on top of the 400 already out of commission and by rationalising AE services around the country.
It is also already seeking to make savings through measures such as a 50 per cent reduction in overtime, cuts in special payments for non-consultant doctors and new redeployment arrangements.
However, sources said the HSE believed there may be little more to be cut from these non-fixed pay costs.
Minister for Health Mary Harney has also instructed the HSE to cut advertising and PR and consultancy budgets by 50 per cent next year.
The HSE's director of finance Liam Woods said last night that the HSE will do everything it can to ensure it protects delivery of services next year but many of the developments it had included in its original service plan for next year may now "be challenged".
Fine Gael health spokesman Dr James Reilly said last night he was deeply concerned that further cuts to services were now envisaged when the HSE was already "cutting services left, right and centre".
But he said people would not be surprised by the HSE "miscalculating its figures".
Ms Harney, meanwhile, has warned the HSE it must stay within budget next year and it should take action early if there is any divergence from planned expenditure noted. "This is to avoid the situation which arose this year where activity ran ahead of planned levels early in the year and had to be reduced later in the year," she said.