THE HEALTH Service Executive (HSE) has warned the Government that it could face a funding shortage of nearly €1.4 billion next year if current proposals for its budget are implemented.
In a confidential submission to the Department of Health in recent days, the HSE also argues that the recommendation in the recent McCarthy report to cut 6,000 jobs would, in the current human resource environment, “result in a scattergun approach to service reduction which does not in any way facilitate strategic downsizing”.
It emerged last week that the HSE had told the Government that it could shed 3,500 posts from its payroll next year at a saving of €105 million.
The HSE document says it would be very difficult for it to reduce spending further without cutting back on services for patients.
The HSE said that repeating efficiency measures introduced over the past two years would be very challenging and “it is difficult to see further expenditure reductions as a result of the value-for-money programme”.
Changes to variable or non-fixed elements of pay for staff would need to be considered in the context of the wider public sector, the HSE added.
The Irish Timesrevealed last month that the Department of Health had asked the HSE to prepare plans for saving up to €800 million next year.
However, the HSE has now said that it already needed an additional €580 million in 2010 to meet growing pay and pension costs, as well as soaring expenditure on demand-led drug schemes and priority investments.
It said that based on identified key service priorities for 2010 and the planned budget reductions sought by the Department of Health, there was “an emerging budgetary gap of up to €1.389 billion”.
The submission reveals that even though a pay freeze is in place for staff, the HSE will next year have to pay out an additional €75 million in increments.
It also forecasts that pension costs will grow next year by €60 million.
The HSE says that the cost of the various demand-led schemes, including the medical card and various drug subsidy schemes, could increase by €350 million.
It says that an additional €172.5 million will be needed to meet unavoidable cost pressures and to allow for the implementation of key service priorities.
“Notwithstanding the anticipated significant reduction in funding for 2010, the HSE has identified a number of key pressure areas which will either be unavoidable and therefore will require to be funded, or to not proceed which will cause significant risk in terms either of lack of a particular service response, lack of compliance with regulation or lack of key enabler to service reconfiguration and process improvement,” it states.
Among the largest amount sought by the HSE for next year is €55 million for the implementation of recommendations in the Ryan Report on child protection.
The HSE has also proposed investment of an additional €13.5 million for a national plan for radiation oncology, €30 million for disability services and €38 million to allow the health service meet standards set by the Health Information and Quality Authority.
The Department of Health is expected to make its own formal submission to the Department of Finance next week on its spending proposals for next year.