New cutback measures are being considered by the HSE in an attempt to deal with a projected total deficit of just over €100 million on its direct patient services at the end of the year.

The latest HSE financial report shows that hospitals were €41 million over budget at the beginning of May. However, some other areas of HSE spending are currently under budget, bringing the total HSE deficit for the year to date to just under €25 million.

The figures show that with less then half the year gone, some hospitals are already running up large deficits.

At the beginning of May, St James's in Dublin had a deficit of €5.1 million, St Vincent's was over budget by €4.4 million, while University Hospital Galway had a €3.1 million deficit.

HSE Chief Tony O'Brien, in the report, says direct services are facing a shortfall of €101 million by the end of the year and hospitals and community services have been asked to formally identify additional cost-containment measures to safely bridge the deficit.

Hospitals are continuing to run up deficits despite many of them getting extra money this year, while targeted savings measures under some HSE spending areas have not yet materialised, the report has revealed.

Hospitals face a serious challenge to balance their budgets this year, even after having been given extra funds to cope with service demands, according to HSE chief Tony O'Brien.

Mr O'Brien, in a report on the HSE's financial position up to the beginning of May, said hospitals had been given budgets for 2012 which were more closely related to the cost of their services in 2012.

However, he said it had not been possible to provide hospitals the full amount of the likely cost of service demands this year.

Mr O'Brien said hospitals were required to safely deliver savings of an average of 3.5% 'in addition to further cost savings to offset any emerging or additional cost pressures this year.'

The Director General-designate pointed out that hospitals had had their budgets slashed by nearly a quarter since 2008.

He said after four to five years of sustained cost containment in the health service, the HSE's financial position this year posed a major challenge for hospital and community services.

Mr O'Brien said the scale of the risk and challenge in the HSE seeking to break even by year end remained very significant, and would increase if there was an absence of continued and improved flexibility under the Croke Park Agreement.

He said medical card and other community schemes alone are projected to run up a deficit of between €65 million and €100 million this year, and contingency measures were being drawn up to reduce this projected deficit.

A recent HSE report to the Dail Public Accounts Committee showed that savings measures under these schemes such as a further cut in the fees of GPs and other health professionals providing services for State schemes have yet to be implemented.

These fee cuts, totalling €70 million, were due to be introduced in April.

Under the medical card and other community schemes, savings of €353 million were targeted for this year.

Mr O'Brien, in his financial report, it was not clear at this stage whether the projected €150 million in pay savings would be delivered as a result of the recent Haddington Road pay deal, Mr O'Brien said.

He added that there were difficulties with collecting private patient income in public hospitals.

The HSE is tasked with finding €720 million in total savings this year.