The HSE has written to hospitals to say that immediate cuts in health spending must be implemented, but in such a way as to minimise risks to patient safety.
It wants a reduction in the average length of stay for patients, more savings on drugs and cuts in overtime.
The directive says overtime should only be approved as an exceptional measure and all administrative or managerial overtime must cease immediately.
It also wants a ''near zero tolerance'' on the use of agency staff.
The directive says that staff on sick leave must not be automatically replaced by agency staff.
A control group is being set-up to secure an extra €2m in savings on aids and appliances.