The HSE has revised downwards its estimated deficit for this year.
It said today its projected deficit was €480 million, but several million in savings which it has already begun making this year, will still have to continue.
Minister for Health Mary Harney has told the board to focus on finding savings of €205 million and she told it the government will consider a remaning projected shortfall of €275 million in the context of its overall spending cuts to deal with the public finances.
The board met today to discuss the funding shortfall and budget cuts.
In a statement after its meeting today, the board said it had reviewed its projected financial position.
“Since the last board meeting there has been detailed discussions between HSE management and officials of the Department of Health and Children about the emerging financial position for 2009.
“These discussions have taken account of the most recent monthly financial information available at the end of February.
“The best estimate of the HSE and the Department is now that the financial shortfall is of the order of €480 million in the current year.”
The board said it was recognised that these were “the best estimates currently possible and are subject to ongoing review as further information becomes available”.
The board said it had asked HSE management today to identify proposals for further savings of €72 million, to delivery total “adjustments” of €205 million.
It had previously identified €133 million in savings which it said would not impact on delivery of its national service plan
The €205 million target is additional to the existing target for value-for-money savings of €250 million provided for in the 2009 service plan approved by the Minister for Health in December, and the continuation of the savings last year of €280 million.
“The board noted that the Minister for Health and Children has requested the HSE to focus at this stage on the achievement of the €205 million.
“The Minister has advised that the Government will consider the remaining projected shortfall of €275 million in the context of its overall deliberations on the expenditure and revenue measures necessary to ensure the stabilisation and sustainability of the public finances,” the statement added.
“The board has welcomed the Minister’s advice. It noted that the financial situation facing the organisation is very challenging. A significant portion of the emerging issues relates to the general economic downturn and its impact on revenues and expenditure on demand-led schemes [such as medical cards].”
Ongoing contact will be maintained between the HSE and Department officials to track the various cost pressures and the further steps that can be taken in response to these “without having an adverse impact on services”, the statement said.
It added that the control of costs and the achievement of value for money savings would continue to demand the “active engagement of the entire organisation and its staff”.
The HSE yesterday said the payment of millions of euro in allowances to non-consultant hospital doctors (NCHDs) was no longer sustainable and the organisation now had to move to implement changes, cutting with immediate effect over €40m in pay and allowances for nearly 5,000 junior doctors.
Fine Gael Health spokesman Dr James Reilly today said measures to deal with the HSE funding shortfall must start in the back room, must protect the front line and must revisit consultants’ pay which is due to increase.
Dr Reilly said redundancies in HSE back office staff and switching from brand name to generic drugs would save over €300 million.
"In order to find any kind of acceptance with the public and staff, avoid industrial action in the health service and protect the front line it must target areas where there is excess bureaucracy, where there is waste and where the people affected can afford to contribute," he added.
Meanwhile, the Irish Medical Organisation (IMO) has warned that the implementation of unilateral cuts in payments and allowances would inevitably lead to a serious dispute in hospitals, which could have implications for patient care.