The real cut in health service funding could be in the region of €853 million, Minister for Health James Reilly said today.
The Minister said it was unavoidable that there would be cuts in services next year.
He also said that some community nursing units will be closed in 2012.
Dr Reilly said that the health service will receive a net cash reduction of €183 million from the exchequer next year.
In addition, a further €310 will be required to meet unavoidable cost pressures such as increases in pension costs, demand-led schemes such as the provision of additional medical cards, the Fair Deal nursing home scheme and to meet commitments set out in the Programme for Government.
He said that taking these two figures together, the Government had agreed an overall saving target of €543 million.
However, Dr Reilly said that this was not the full picture.
He said that a financial deficit of up to €200 million which the HSE will carry over into next year will also have to be taken into account as will the cost of incremental pay increases for staff, the cost of implementing the EU agency worker directive, which is about €33 million, and the increase in VAT to be announced in the Budget tomorrow.
Patients with private health insurance are expected to face significantly higher charges next year as a result of changes to the cost of private beds in public hospitals to be put in place by the Department of Health.
Patients will also have to pay more themselves for drugs and medication as the threshold for the Drug Payment Scheme is being increased €120 to €132 per month.
However, Dr Reilly said that it was not all bad news. He said free GP care is to be provided to about 56,000 patients covered by the Long Term Illness Scheme. This represents the first phase of the Government's overall commitment to introduce universal free GP care.
There is also to be a special provision of an additional €35 million for mental health services in line to commitments set out in the Programme for Government.
The Minister also revealed that 1,200 staff in the health service have applied to retire before new pension arrangements come into force in February. He pointed out that the numbers involved were very fluid as more staff had expressed an interest in leaving but that there was still time for them to change their mind.
The Government has said that it wants to save €145 million overall on staff pay and on the amount it pays out in overtime, premium rates and on agency personnel. It has set a staff ceiling for the HSE of 102,800 for next year, a reduction of about 3,000.
