The head of the Health Service Executive Professor Brendan Drumm has confirmed that acute hospital beds will be closed next year to free up money to develop better community services.
He told the Oireachtas health committee this afternoon that the prospect of building a national health service around acute hospital facilities was not sustainable.
He added that next year will be a very challenging one financially for the HSE and maintaining services at the level they were at this year will be a real challenge.
"We will have to maximise our efficiency, streamline how we do things, trim costs, cut out duplication, reduce the over reliance on high cost acute hospitals and provide more integrated community based care," he said.
"During 2009 not only will we have to repeat our strong value for money performance but we will also have to reduce or avoid costs further by reaching additional savings. I am determined that in achieving these savings we will protect essential service levels," he added.
It has already been reported in the last week that the HSE plans to close up to 600 hospital beds next year.
Prof Drumm also told the committee that the HSE has so far this year delivered care above and beyond targets in its service plan and would still come in within budget at the end of the year. He said outpatient attendances, for example, were 18 per cent ahead of target.
Meanwhile the committee was told by Minister for Health Mary Harney that a supplementary estimate of €70 million will be brought forward shortly for the HSE to cover the cost of the introduction of new consultants contracts during the second half of this year.
But she warned the HSE would not pay this money to consultants unless they displayed changed work practices. Under the new contract consultants are expected to work in teams over a longer day during the week and also be rostered to work at weekends.
Ms Harney confirmed 1,000 consultants had changed over to the new contracts and 300 have taken up contacts which will see them treat public patients only.
She also said legislation covering the changes to the medical card scheme for the over 70s will be published next week and then the HSE will write to older people advising them of the changes which come into effect on January 1st.
Furthermore, she said innovative solutions were being looked at to deal with the problem of delayed discharges, which are now blocking over 750 beds in acute hospitals across the country. It may be, she said, that resources will have to be transferred over from the hospital side to community services to deal with the issue.
Several TDs from the north east raised concerns with Ms Harney and Prof Drumm about plans to end acute medical admissions to Monaghan General Hospital.
Fianna Fáil TD Margaret Conlon said people had lost confidence in the HSE over the issue while Sinn Féin's Caoimhghín Ó Caoláin said the plan meant Cavan General Hospital would have to cater for an extra 3,000 medical patients a year from Monaghan without getting a single extra bed.
Prof Drumm said he would set up a meeting between local public representatives and the HSE's transformation programme team in the north east to discuss the issues raised.