HSE Dublin Northeast Cuts

As part of the overall and unprecedented financial challenge facing
the country, the HSE has been set clearly defined budget targets by
both the Troika and Government.

In 2010 and 2011 the health services saw unprecedented budget
reductions of approximately €1.75 billion. This was followed in 2012
with additional reductions of €750m. These reductions occur at a time
when demand for health services continues to grow.

It is well known that the HSE is running a significant budget deficit
currently. This deficit exists due to a number of factors, including
the increased demand for services. For example, due to increased
demand, the HSE has issued 125,000 medical cards over and above
Service Plan projections, which is contributing to approximately €100m
of the current budget deficit.

The deficit as of 31st August 2012 is €259m. The HSE has a statutory
obligation to remain within its allocated budget of €13.2bn for 2012.

Detailed cost containment plans have been in place across the health
service since the beginning of the year. However, there has been an
increasing demand for services which has contributed in a significant
way to the the continuing deficit. Should robust cost reduction action
not be taken at this juncture, the HSE faces a potential year-end
deficit of €500m.

In order to deal with the existing deficit and to remain within
budget, the HSE is now obliged to introduce a range of additional cost
reduction measures to be implemented throughout the remainder of 2012
and into 2013.

The range of additional measures amounts to €130 million. In compiling
these measures, every effort has been taken to target areas that do
not impact on direct client/ patient services, with a view to
protecting, in as much as is possible, the most essential frontline
services. However, it is inevitable that some impact on service
delivery will be experienced through the implementation of these
measures.

The €130m of cost reduction measures is in addition to other
non-operational measures to be undertaken, that have been submitted to
the Troika. These non-operational measures include cash acceleration
of receipts from health insurers and the transfer of surplus money
within the health group of votes such as the NTPF.

Amongst the cost reduction measures included within the €130m are:

€37m through cash and stock management initiatives;

€26.5m through savings in medical equipment (non-capital), furniture,
education, training, office expenses, travel and subsistence and
advertising;

€35m through reductions in the usage of agency and overtime in line
with the targets set in the HSE Service Plan of reductions of 50% in
agency and 10% in overtime;

€6m savings on reimbursements for certain products including
Glucosamine, Orlistat and Omega-3-Triglycerides;

€10.8m through the reduction of Home Help hours. This involves a
reduction of 5.5% from the 11 million hours (€195m budget) provided
annually. The impact of these reductions will be minimised by ensuring
that services are provided for direct patient care;

€1.7m through the reduction of 200 Home Care Packages per month. This
accounts for a reduction of 3.7% from the 5,300 packages (€140m
budget) delivered annually. The impact of these reductions will be
minimised by achieving greater efficiency in the packages currently
provided;

€10.8m through the reduction of Personal Assistant hours from the
current €1.4 billion budget for the provision of disability services;

€2m through savings in the procurement of medical equipment. This
relates to non-capital equipment only.

Each of the Regional Directors of Operations is working with their
staff to develop implementation plans in order to give effect to these
measures. While many of the measures are already underway currently,
further plans will be developed and discussed with staff and unions
over the coming week.

While implementing these plans the health services will at all times
attempt to minimise the impact on frontline services and ensure that
patient/client quality and safety is maintained to the highest
standard possible.