45m could be saved in increments

HSE CEO Cathal Magee has said freezing increment payments in the health sector this year would save between €40 million and €45 million.

Addressing the Dail Public Accounts Committee today, Mr Magee agreed with Health Minister James Reilly's assessment that if further savings were not made, the HSE was heading for a deficit of €500 million at the end of the year.

Mr Magee said at the end of April the HSE deficit was €197 million.

However, this was recently reported to have risen to nearly €300 million at the end of May.

He said health staff numbers were now back to the levels of 2005-2006.

On the issue of dealing with the HSE's overtime and allowances bill, Mr Magee pointed out that 83% of the HSE's total pay bill went on basic pay and employers' PRSI. This was to provide a 24/7 health system.

Overtime costs accounted for 4% of the total pay bill, while 10% went on premium payments.

Mr Magee said pay accounted for around 70% of the hospital budget and up to 90% in the disability sector.

Deputy John Deasy of Fine Gael told the meeting that one HSE employee received €186,000 in allowances in 2010 and another received €135,000 in overtime.

The CEO pointed out that projected savings the HSE had made a the start of the year in terms of drug costs and a projected income target from treating private patients in public hospitals had not yet materialised.

He said it had been projected that €124 million would be saved this year in drug costs. However, the agreement necessary with the pharma industry which would contribute to this this had not yet come through. At the same time the HSE was approving new drugs for which there was no budget provision this year.

The CEO said in addition, legislation was awaited which would lead to a greater level of generic prescribing.

The HSE was also awaiting legislation to allow it to charge private patients who were occupying public beds in public hospitals, Mr Magee said.

He said a total of €3.095 million was owed to the HSE in overpayments to GPs for deceased patients. However, GPs were owed €2.807 million for treating newly-born children who had not yet been registered as medical card patients.

These anomalies were currently being rectified, the Committee was told.

The CEO said the HSE spent €4.6 million last year on external consultancies. He said spending on these services had been reduced significantly in 2011.

Mr Magee admitted that the HSE's financial system was not fit for purpose and this was a legacy issue from the time of the health boards.


[Posted: Thu 28/06/2012]


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