HSE targets €1bn in cuts/savings
The health service is effectively facing cutbacks and savings of just over €1 billion next year, despite previous predictions this week that the cutback target would be €619 million.
HSE Director General Tony O'Brien has admitted that 2014 will be one of the most difficult years from a financial planning perspective that the health service has faced.
The HSE's 2014 service plan says there are required savings targets of €619 million for the health service in 2014. However, in addition to this there are underlying 2013 deficits of €419 million which need to be addressed as well as addressing the €619 million target in 2014.
Included in the cuts are the shelving of a plan to provide BreastCheck to older women, the likely closure of some hospital emergency departments as part of a hospital reorganisation plan, and the continuation of major staff reductions.
Mr O'Brien said patients would notice gaps in services next year.
At the launch of the service plan today, he said the figures did not represent a cut of €1 billion, but a 'challenge' of €1 billion. HSE Chief Finance Officer Tom Byrne admitted that next year's budget would pose a 'very big challenge'.
The service plan states that the HSE must impose significant spending reduction targets for 2014, and it must address the €419 million carry-forward deficit in addition to the €619 million in savings targets. "Any slippage in delivery of these budgetary restrictions will have an adverse effect on our 2014 financial position."
The effect of planned 2014 savings targets and the carry-over deficit means that hospitals could face cuts of up to €250 million next year, even though on paper they have been given a small increase in their allocation for 2014.
With some hospital CEOs already concerned about existing cuts threatening safety, the real impact of these required savings may only become apparent as the year progresses.
A total of €268 million has been targeted in pay savings for 2014, including €140 million in Haddington Road Agreement savings and €108 million in 'unspecified' pay savings, which the HSE refused to elaborate on at the launch of the plan. In addition, there will be €20 milliion in staff savings under employment control measures.
On top of the €268 million in pay savings, a further €150 million must be saved in pay next year which was due to be saved in 2013 under Haddington Road changes, bringing total staff cuts and savings costs to €418 million. A sum of €80 million in funds related to Haddington Road changes will be held centrally by the HSE and spent later in 2014 where necessary.
The previous €113 million 'probity' target for medical card cuts has been downsized to €23 million. However, 75,000 people stand to lose their full medical cards next year through various measures, with a net loss overall of 15,000 cards, when new medical card recipients are taken into account.
In addition to substantial pay/employment savings next year, savings are also targeted in areas such as drug cost reductions, generic drug substitution, removing some free drugs from the medical card scheme, cuts to medical card numbers, the prescription charge increase and through procurement savings.
Additional funding of €37 million is allocated for the roll-out of the under-sixes free GP care scheme, while €20 million is allocated to mental health initiatives.
The head of acute hospitals with the HSE, Ian Carter said substantial progress is expected to be made in reaching the maximum waiting list targets of eight months for procedures and 12 months for outpatient visits by the end of the year, although similar targets have been set for the end of 2014.
The service plan points out that by the end of 2014, nearly €4 billion will have been taken out of the health service budget over six years.
Main service plan measures:
* Total effective cuts/savings of €1.038 billion next year.
* Hospitals face up to €250 million in cuts next year, even after an increase of around 2% in their 2014 overall allocation. Hospitals must deal with €190 million overrun from this year, €56.5 million in cost containment plans left over from this year and €7.5 million in reconfiguration savings.
* Overall net increase of 15,000 in new medical cards next year, but around 75,000 stand to lose their full medical cards. €23 million to be saved in medical card probity measures.
* Total pay savings of €418 million, including €108 million in as yet unspecified savings. Health service set to lose 3,600 staff next year. Service will have lost 15,000 staff since 2007.
* Savings of €129 million in procurement, shared services, value for money, hospital reorganisation and other areas.
* HSE says it will be 87% compliant with targets of 12 month max. outpatient waiting time and 95% compliant with eight month max. treatment wait at the end of the year. Similar targets set for next year.
* Reductions projected in inpatient admissions and outpatient attendances next year.
* €7.5 million to be saved through hospital reconfiguration. HSE chief Tony O'Brien admitted this would include reviewing the future of some hospital EDs.
* Extra funding provided for under sixes GP scheme and mental health.
* Home care packages and home help hours to be kept at the same level as 2013.
* Patient Safety Agency to be launched next year.
* 'Money follows the patient' plan to begin implementation next year, in which hospitals will no longer get block grants but will be funded according to their expected levels of activity.
* Plan to extend BreastCheck to older women 65-69 shelved.
* Funded Fair Deal nursing home scheme places to drop from 23,000 in 2013 to 22,061 next year.
[Posted: Wed 18/12/2013]