THE HSE spent a staggering €28m on taxis for staff and patients last year.
The amount is up €1.5m on the previous year's figure, when €26.5m was shelled out.
This massive spend on transport costs comes amid swingeing cutbacks and bed closures across the health service.
However, the HSE insists the use of taxis for patient transport is more cost-effective than other options.
It said: "HSE vehicles and their staff are prioritised for front-line, emergency work and therefore a much more effective service is provided for patients or clients who are not acutely ill through the use of taxis.
"The use of taxis for patient transport represents a more cost-effective solution when compared to investment in a fleet of HSE owned vehicles for this purpose."
Liam Woods, the National Director of Finance, said: "Additional costs relating to this would include the provision of 24/7 staffing, maintenance, fuel, insurance and tax."
He said that the use of taxis also allows the HSE "flexibility" in the face of variable demand.
The figures for last year showed that patient taxi expenditure was €27.6m, while staff taxi expenditure was €357,334.
However in some cases, the figures for staff taxis included cases where members of staff would have accompanied patients and clients, for instance, where staff members such as social workers would accompany children on access visits and school outings.
"In the area of mental health and disabilities, patients and clients may be accompanied by a member of staff to attend medical appointments, referrals and specific activities in relation to their rehabilitative care. These taxis are recorded as staff taxis," according to the HSE.
There was a fall in the amount spent on staff taxis in 2011, compared to €487,053 the previous year.
However, the taxi spend rose overall last year because more money was spent on providing patient taxis.
The figures show that the HSE spent €28.6m on taxis in 2008 and €27.1m in 2009.
The HSE was in the process of concluding a national framework agreement for transport services which will apply to taxis, Hackneys and minibuses.
This will mean regional contracts for transport services can be put in place following "mini competitions".
The national taxi regulator has been contacted by the HSE's procurement division to ensure that appropriate quality and standards are in place for such services.
Meanwhile, the figures on the amount spent on taxis so far this year are being compiled by the HSE. The information on taxi expenditure was provided to TD Billy Kelleher following a parliamentary question.