THE HEALTH Service Executive (HSE) is seeking to generate about €250 million in cost-containment measures to allow it to live within its budget for this year.
The health authority told trade union leaders last month it had overrun its official budget by €147 million in the first six months and was projecting a deficit of €300 million for the full year.
It said its community services - largely demand-led drug schemes - and the hospital sector were both in the red.
The HSE also forecast that that there would be a shortfall of €72 million in its value-for-money programme for the year which had aimed to save €300 million.
Speaking in Cork yesterday, Minister for Health Mary Harney said there would be no cutbacks this year.
But she warned of tightening budgets in 2009.
"There are no cutbacks this year. The HSE got their budget last year, no money has been withdrawn from them but the HSE have to live within a budget of over €15 billion that was allocated for 2008," she said.
However, with the Government's tax take this year showing receipts are down by over €4 billion, it was inevitably going to have an impact on the provision of health services next year, said Ms Harney.
"We will have a very tight year as far as public spending is concerned and, as the health department spends a quarter of all the money we spend running the country, it, in particular, will be challenged."
Meanwhile, official interim HSE figures for the first five months of the year, which have just become available, show that it ran up a deficit of €99.8 million in the months to the end of May.
The financial report, part of which is based on estimates due to the effects of an industrial dispute involving the trade union Impact, says that the primary, community and continuing care services recorded a deficit of €61.1 million for the first five months.
"The principal contributing factor to the variance continues to be the upward trend in activity around medical cards and other schemes (both community and primary care) within the Primary Care Reimbursement Service, amounting to an estimated €64.5 million," it says.
The report says that an additional 3,691 people became eligible for medical cards in May over the position in April.
"This brings the total number of eligible persons on medical cards to 1,306,470.
"This represents 32.6 per cent of the total population compared to 29 per cent in April 2007," the report added.
"The current economic downturn is a clear contributor to this growth," the report states.
The HSE document also says that the number of claims made under the long-term illness scheme and the drug payment scheme also continued to show considerable growth over this period.
The report also says that spending on hospitals in the first five months of the year went over budget by more than €61 million.
However, the HSE figures also show that the number of staff on the payroll is continuing to fall.
At the end of May there were 110,090 whole-time equivalent personnel in the HSE - over 1,400 fewer than the numbers officially permitted by the Government.
"End of May employment data shows a reduction of 214 whole-time equivalents over the April report," it says.
The report states that in the hospital sector a reduction of 227 whole-time equivalent staff was recorded.
"Decreases were seen practically across all hospitals," the report says.
At its meeting with trade unions last month, the HSE said it would be looking to make its savings in non-frontline areas.
However, the health authority warned that to do this it would require the co-operation of the unions.
The areas earmarked for savings by the HSE include training; capital funding for technology services; population health; travel and subsistence; employment control; laboratory services, telephony costs and unpaid leave.