THE HEALTH Service Executive (HSE) is expected to tell trade union leaders on Tuesday that "active and rigorous" cost- containment measures are to be introduced following confirmation that it overspent its official budget by almost €26 million in the first month of this year.
The deficit of €25.9 million recorded in January would appear to back up the forecast made recently by HSE chief executive Prof Brendan Drumm that the organisation was facing a €300 million "challenge" this year. An internal financial report, which was given to HSE board members last week and which is expected to be given to health sector trade unions next week, shows that in the first month of the year, hospitals overspent by €16.4 million.
Meanwhile, on the community side, there was an overrun of €15 million, mainly in the areas of expenditure on the medical card and demand-led community drugs schemes. These overruns were offset by some savings in other areas.
The report states that the HSE's Primary, Community and Continuing Care (PCCC) sector is seeking to make savings of the order of €95 million this year.
The financial report does not set out a precise figure for savings for the hospital sector this year.
However, it states that "a rigorous cost containment and business management programme is being put in place to ensure that activity levels will be managed in line with resource availability".
The HSE said yesterday that it was seeking to generate savings of up to €100 million through a value for money programme, which would look at areas such as travel and telephone costs. It said that it wanted to protect frontline services.
However, Prof Drumm warned earlier this month that if HSE spending was not brought under control, that other measures, including the operation of A&E units in smaller hospitals, the closure of hospital wards at weekends and the shutting down of facilities over the summer could be examined.
The financial report says that the €15 million in the PCCC area was in line with the growing upward trend during 2007 in the number of persons eligible for the various schemes such as the medical card and GP visit card. "For example, there was a 47 per cent growth in the number of persons in receipt of GP visit cards at the end of January 2008, compared to the same period in 2007," it states.
The report also argues that some of the deficit was due to the delayed introduction of the controversial new pricing arrangements for drug wholesalers.
The HSE financial report shows that Tullamore General Hospital recorded an overrun of €899,000 in January, the largest deficit for any hospital as a percentage of total budget.
Significant deficits were also recorded at Waterford Regional Hospital (€825,000); Tallaght hospital (€1.19 million), University College Hospital, Galway (€1.09 million) and Cork University Hospital (€1.065 million).
The internal report shows that the controversial recruitment freeze introduced last autumn and the new controls on employment put in place from January are having an effect in bringing down the numbers of staff on the HSE payroll.
The report says that the staffing levels in January were only 133 above the official ceiling of 110,789 currently agreed with the Government. This represented a reduction of 583 in the numbers employed since December and the fifth month in a row that the staffing levels had fallen.