Shortfall in anticipated fee reductions will lead to €30m health cuts

Almost €30 million in additional cuts to the health service are to be made to compensate for a shortfall in anticipated revenue this year from reductions in fees paid to doctors and pharmacists, the Department of Health has confirmed.

The department intended to raise €70 million this year from fee cuts under the Fempi (Financial Emergency Measures in the Public Interest) legislation, but only €40 million will be collected because the reductions are being introduced halfway through the year.

To deal with the financial shortfall, “alternative solutions” are being examined by the HSE and the department, a spokesman for the department said yesterday.

“The shortfall will have to be addressed within the context of the overall management of the HSE budget from now to year end.”

The spokesman explained the delay in announcing the Fempi reductions to the requirement to analyse “a range of factors” and broader delays in the Croke Park II process and subsequent Haddington Road agreement.

Under the measures announced by Minister for Health James Reilly this week, the retail mark-up of 20 per cent paid to pharmacists for dispensing drugs under the drugs payment scheme and the long-term illness scheme is being ended. Fees to GPs are being cut by an average of 7.6 per cent, and the fee paid to GPs for administering the flu vaccine is being cut from €28.50 per vaccine to €15.

The Irish Medical Organisation has warned that the fee reductions will lead to longer waiting times for patients to see a doctor, while pharmacists have refused to rule out the possibility that individual outlets might increase the price of medicines for private patients to recoup fees lost under the public schemes.

The HSE is running behind schedule in making savings in a number of others areas, including medical cards and private health insurance charges.

Having lost over €360 million last year, it was €25 million over budget at the end of April.