MORE WILL be spent on health this year than is forecast to be collected from VAT or income tax, Minister for Health Mary Harney told the Dáil.

She said €16.4 billion was the health expenditure for 2009 but the HSE faced a shortfall of €480 million which is a major challenge.

Opposition deputies said however the shortfall would be more than €1 billion.

She said she had asked the board of the HSE not to reduce levels of services to patients if this can be avoided before the Government makes its determination on expenditure and fiscal matters in the next three weeks.

During a debate on challenges facing the health service, Ms Harney said that the €480 million included a 100 million shortfall in receipts from the health levy, and up to €60 million in long-stay repayments, while the estimated shortfall in the allocation for medical cards is approximately 170 million.

Minister of State for Children Barry Andrews said that child protection should be one of the most important services and at the forefront of any debate on the HSE. It was a vital service to prevent abuse that would leave a lifelong scar.

Ms Harney told Fine Gael health spokesman Dr James Reilly that allowing for retirements there would be 156 new consultant contracts, but he said they would take years to fill. The Minister said the new contract is not a pay increase for consultants but a new way of working and the cost of it has to come from a reduction in the number of non-consultant hospital doctors. She said there were 4,900 junior doctors and €347 million went on overtime while the cost of allowances was €700 million.

The Minister stressed that under the new contract there would be one-for-all access to diagnostics with no preference for patients with insurance.

Dr Reilly said that “cuts of themselves do very little; we need real reform”. He pointed out that on top of 500 million worth of savings initially planned for 2009, an additional 600 million will need to be saved.

In addition to the 500 hospital beds not in use, a further 600 are expected to be taken out of the system, which gives a total of 10 per cent of the bed complement.

Eleven accident and emergency departments will be rationalised, front-line staff will be cut, and critical overtime will stop, he said.

Labour spokeswoman Jan O’Sullivan said there will be drastic cuts to a health service that, despite the rhetoric of the Minister, has not been reformed.

She added that it is not a reformed service because the improvements that would have made it more lean and efficient have not happened.

She said that money is still being allocated throughout the system without being related to outcomes in any way and that is the problem.

Martin Ferris (SF, Kerry North) said real savings can be made by ending all State subsidies for the private for-profit health sector, reining in those consultants who profit from the private and public systems, cutting bills through the use of generic drugs, and the establishment of a State pharmaceutical procurement and distribution company.