Plans announced by the Minister for Health Stephen Donnelly to generate savings of €424 million this year have been revised following the Government decision to provide €1.5 billion more to the sector this year.
The Department of Health said as part of this new funding agreement the savings target for this year had been reset to €368 million. It said by achieving an overall expenditure out-turn within revised spending limits in 2024, “the HSE will be on track to achieve the full €368 million savings for 2024″.
It said that targeted savings of €100 million on management consultancy, medicines, and agency pay expenditure were “on track to be achieved by end-2024″. The department said the overall target for savings next year had been increased to €720 million.
Following a row with the Department of Public Expenditure in 2023 over the health budget for this year, Mr Donnelly established a productivity and savings taskforce in January. In April he published a productivity and savings taskforce action plan. At the time the Department of Health said substantial savings of approximately €424 million in 2024 (€554m full year saving) were being targeted including medicines expenditure, non-pay costs, procurement costs, the cost of care in long term residential care for older people, and management consultancy costs.
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By mid-year it appeared the health service was heading for an overrun of about €2 billion. In July Mr Donnelly and Minister for Public Expenditure Paschal Donohoe reached an agreement which provided an additional €1.5 billion for the health service this year, along with a further €1.2 billion for 2025.
The Department of Health said this week that as part of the expenditure agreement the original savings target was subsequently revised to a saving of €368 million. It said this was incorporated within HSE’s revised expenditure limits.
“The expenditure limits have been broken down by individual health region and control has been devolved out to the individual regional executive officers to take actions to achieve an expenditure out-turn within these limits.
“The targeted savings of €100 million on management consultancy, medicines, and agency pay expenditure are on track to be achieved by end-2024. The overall savings target of €368 million by end-2024 has now been superseded by the revised expenditure limits. By achieving an overall expenditure out-turn within the revised expenditure limits in 2024, the HSE will be on track to achieve the full €368 million savings for 2024 targeted by the taskforce.”
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