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HSE calculations on page 80/81 of the plan outline how the headline 2019 budget level of €16,050m received from the Department of Health is a €848m/5.6 per cent year-on-year budget increase over and above the final 2018 budget of €15,202m.
The 2019 funding includes Dormant Accounts funding of €2.5m and €198m of Development Funding, €20m of which relate to the full year cost of 2018 developments, with €178m relating to new 2019 developments.
Accordingly €15,869m is available to meet the estimated 1st charge from 2018, which will not be known until the Annual Financial Statements are signed off in 2019, but is estimated for planning purposes at €114m; the cost, in 2019, of the existing level of service activity in place by the end of 2018, including centrally agreed pay rate and pension changes as well as other price increases; the cost in 2019 of additional service activity to meet demographic and other service pressures.
When the first charge is applied, €15,755m is available to provide services in 2019, which is an increase of €547m from the equivalent in-year 2018 projected expenditure in 2018.
The cost, in 2019, of providing the level of service activity in place by the end of 2018, is estimated at €15,805m, which is an increase of €597m over the 2018 costs of €15,208m.
“This €15,805m cost is €50m or 0.4 per cent higher than the €15,755m funding available to meet all 2019 costs. Furthermore, it excludes the cost of additional service activity from 1 January 2019 to deal with demographic, technology, unmet need and other pressures on the system,” according to the Service Plan.
It outlines how the HSE will adopt a range of “actions/initiatives” to address the “financial challenge” in 2019.
The plan lists areas where lower provision is being made, “cost reduction or improved income” generation is required:
• Legal Costs – Improved co-ordination and control arrangements – (€5.3m)
• Consultancy Costs – Prioritisation and reduction in costs – (€10.5m)
• Procurement – Reduction in prices and costs via contracting – (€16m)
• Office of the Chief Information Officer cost mitigation initiatives – (€1m)
• Shared Services (HBS) – multi-annual cost efficiency and reduction programme – (€5m)
• National HR – cost avoidance and cost reduction programme – (€4.5m)
• Overhead and other non-pay efficiencies – (€12.7m)
• Agency / Overtime conversion – (€17.5m)
• Laboratory – general efficiencies including demand management – (€1m)
• Acute hospital income improvement programme to mitigate actions of PHIs – (€10m)
• Community voluntary organisations – prioritisation, rationalisation, insurance, income and general efficiencies – (€4m)
• Drugs and Medicines – €3m ‘invest to save’ programme funded by DoH – (€19m)
• Vacancy control i.e. prioritisation of frontline staff replacement within pay budgets – (€15m)
• Vacancy control community voluntary organisations – (€2m)
• Reduction in complex delayed discharges and specialling – (€6m)
• Disability – DoH to agree HIQA compliance phased investment programme 2019-2021 – provision limited to €2.6m for 2019
• High cost community residential care including external placements – centralised procurement and coordination – (€9.6m)
• Reconfigure the overall bed stock to a more sustainable level giving rise to a reduction in bed numbers of 80 -100 beds – (€7m)
• Setting activity levels at the affordable level within 2019 budget – Patient Transport (€10m)
• DoH led sustainability programme re community pharmaceutical costs – (€38m) and PCRS pharmacy service – (€13m).
Speaking at today’s launch, Mr Dean Sullivan, HSE Deputy Director General – Strategy, stated: “While we will endeavour to ensure we provide value for the monies we spend, we are very cognisant that meeting both current and future challenges is not sustainable. We continue to experience high hospital occupancy levels, pressure regarding waiting lists and increasing demands on other social care and demand led schemes.
“We will however, continue to respond to the most pressing patient and client needs within the resources available. We will seek to maintain activity levels at 2018 planned outturn position and focus on cost reductions and improved efficiency.”