20 August 2012 Last updated at 04:41 ET

NHS Herefordshire needs to make £68m of savings by 2015

Health bosses in Herefordshire say they need to save £68m by 2015.

NHS Herefordshire said savings of 20% from the £307m budget are needed because people are living longer and drugs are becoming more expensive.

In the future, more patients could be treated at home rather than going to hospital, said the chief executive of NHS Herefordshire, Eamonn Kelly.

Mr Kelly said: "Our workforce is one of the biggest costs and more jobs may have to be cut."

He would not disclose exact numbers of job losses but said management costs needed to be reduced by 35-40% and a small number of redundancies have been made in non-clinical staff.

Analysis

Tom Turrell Political reporter, BBC Hereford and Worcester

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In early 2010 and off the back of unprecedented levels of investment in the NHS by Labour, David Cameron looked to reassure sceptical voters that the NHS was safe in the hands of the Tories. He promised to protect the NHS from any budget cuts.

So why then does £68m need to be saved from the National Health Service in Herefordshire by 2015?

Well, the prime minister stuck to his word and has ring fenced the £100m funding for the Department of Health. The problem is because we are living longer and the price of drugs and technologies are rising it means costs are actually going up significantly.

The result - we have roughly the same amount of money to spend, but it has got to go a lot further.

Mr Kelly also said wage costs were being "held down nationally" apart from in lower-paid staff.

NHS Herefordshire employs around 1,600 staff across the county.

Mr Kelly said any budget cuts would not reduce the quality of care for patients.

He said: "Care quality is not going to suffer, if it did then patients would need to come back for treatment so the whole philosophy of improving quality and efficiency will help us tackle this challenge."

As part of the government's spending review in 2010, Chancellor George Osborne has said the NHS needs to make £20bn of savings by 2014.

In January it was revealed that NHS Worcestershire needed to save £200m over the next three years from an annual budget of £900m.