The health budget will be cut by €1.4 billion between now and 2014 under the national recovery plan.
It will be slashed by €746 million next year and "additional savings of €680 million will need to be implemented" in the health area between 2012 and 2014, it says.
The plan says the Government will seek to ensure frontline health services "are protected from cutbacks due to the need to provide these services and the importance of human capital as an essential condition for economic recovery". But it says significant savings must be found from major drivers of spending including free or subsidised medical care and treatment.
"This will involve closing schemes and programmes which are no longer affordable, and in some case the introduction of fees. This is a more cost effective approach to service delivery compared to a strategy of reducing programme benefits but retaining existing staffing levels," it states.
"The traditional model of completely free provision for public services is not sustainable. A reasonable co-payment on the part of the citizen will (a) offset to some extent the exchequer costs involved and (b) lessen the waste arising from unnecessary oversupply, which is always a risk when goods or services are provided free," it adds.
It envisages current spending on health dropping from €14.8 billion this year to €14.1 billion next year and then sliding to €13.9 billion in 2012 and to €13.7 billion in 2013 and 2014. Overall this represents an 8 per cent cut in current spending over the lifetime of the recovery plan.
In terms of next year's health budget the report envisages €259 million of the €746 million that has to be cut in 2011 coming from pay as a result of the reduction in staff numbers following the HSE voluntary redundancy and early retirement schemes as well as cuts in overtime and other non pay areas. A further €444 million is to be saved in the areas of procurement and on demand led schemes such as the medical card scheme and the drug refund scheme while €7.5 million is to be saved on administration.
Another €36 million is to be cut from funding to the Department of Health for its agencies including voluntary bodies and in cuts to the office of the Minister for Children.
The plan envisages much of the cuts in day to day spending at hospital level coming from increased use of day care procedures, reducing patients' average length of stay in hospital and better bed management. More services will be provided in community settings, particularly through primary care teams and social care networks. "This will lead to a reduction in the number of in-patient beds".
There will be further increases in the charges for private and semi-private treatment in public hospitals "to achieve full cost recovery" and clinical guidelines to improve prescribing behaviour and reduce the drugs bill are to be introduced. At the level of community schemes there will be changes in the existing range of dental services and supports "in order to improve access to essential dental services for those most in need".
There will also be "the introduction of an approach to community support for older people which takes need and financial means into account on a nationally consistent basis".
Across the health system staff will work over an extended day from 8am to 8pm, existing roster arrangements will be reviewed, staff will be redeployed within and across locations and there will be "major change will be introduced in medical laboratory services and associated work practices".
The plan also says accountability for management and other grades in the health sector will be strengthened "and performance management will be introduced in the health service in 2011".
In addition it says competition in the professions will be promoted and overseen by an independent figure, reporting regularly to Government and that all the restrictions on appropriately trained GPs who wish to hold GMS contracts will be abolished.
Elsewhere, the plan says the moratorium on recruitment in the health sector, as well as in other areas of the public sector, will continue except for essential posts. There will be a 10 per cent pay reduction for all new entrants to the public service, which will include hospital consultants who are exempt from the moratorium on recruitment at present.
Numbers employed in the public health sector will fall from 106,850 this year to 100,800 by 2014 under the recovery plan. This will bring HSE staff numbers back to 2005 levels.
Labour Party health spokeswoman Jan O'Sullivan called for clarification on aspects of the plan.
She said that under the proposals, it seemed €454 million was to be saved in procurement and demand-led schemes.
"If this refers to money saved by purchasing in bulk and more use generic drugs, then it is something I would welcome, but I would be fearful that it may mean much more than that."
Ms O'Sullivan questioned whether the plan's references to "demand-led" schemes meant the Fair Deal scheme for the payment of nursing home fees and home help schemes.
"The reference to cuts in the 'administration' budget and allocations to 'health agencies' and in 'childcare and youth schemes' are also very vague and could very well indicate that essential frontline services are now seen as fair game for this Government."