HEALTH Minister James Reilly, who secured a €245m bailout to balance the health service's books for 2012, has signalled hospital budget cuts will be less severe next year.
Dr Reilly said the year-on-year slashing of funding for hospitals was "not realistic" and their budgets for 2013 will be based on their out-turn of patients and other services.
The news will come as some relief to staff in hospitals, which are €162m in debt, and have seen spending "cut to the bone" in many areas at a time when they have to deal with a continuing influx of patients.
Dr Reilly appeared before the Joint Oireachtas Committee on Health and Children yesterday to secure the supplementary estimate which he described as "relatively small" given the pressures the service was under.
He said the entire deficit for the health service for 2012 was €360m but it was reduced by securing a payment of €45m due from the Medical Defence Union which stopped indemnifying doctors because their compensation payouts were too high.
This left the State to pick up much of the compensation bill but the €45m amounts to a settlement from the indemnifier.
He also raided some of the Department of Health's funding for another €70m, including some of the money allocated to the National Treatment Purchase Fund to cut waiting lists and unspent legal fees and capital funding.
He admitted that savings of over €750m, which must be made by the health service next year, are dependent on changes in work practices agreed under the Croke Park Agreement.
He told the committee that 2013 would be "a very difficult" year for the health service.
He said 70pc of hospitals have met the target to have no adult waiting for treatment for over nine months.
Questioned on how January projections to have the Health Service Executive (HSE) come in on budget, with later warnings that it was on course for a big deficit, he said the demands on hospitals and areas like the medical card scheme continued to grow.
He added that the use of agency staff and overtime had grown following the exodus of so many staff under the incentivised retirement scheme.
He insisted the new deal with drugs companies, which would generate gross savings of €116m next year, was better than envisaged.