THE OPERATORS of a new €90 million private hospital said yesterday they would have no alternative but to close the hospital and make 75 staff redundant if they did not secure agreement with VHI Healthcare to provide insurance cover for patients.
Dr Joseph Sheehan of the Sheehan Medical Group said the company was facing a very serious situation at the Cork Medical Centre (CMC) if it failed to secure agreement with VHI Healthcare to provide insurance cover for patients wishing to be treated at the hospital.
Dr Sheehan said given VHI Healthcare’s dominant position within the Irish private health insurance market there was not a private hospital in the country which could survive without VHI Healthcare approval.
He said when the Sheehan Medical Group first proposed building a private hospital in Cork in 2007, it was encouraged by the VHI. More recently VHI had given the company verbal assurances that it would approve the hospital for insurance cover.
“We would love it in writing . . . VHI won’t give approval until you are built and functioning because they want to see the quality – so you have no choice, you are never going to get anything in writing until you are up and running.”
The VHI issued a statement on Wednesday which said it advised CMC in 2009 that it believed there was excess capacity in the private hospital marketplace.
This was strongly disputed yesterday by Dr Sheehan. He said Cork and Munster were particularly undersupplied with private hospital beds, saying that there were 335 private beds at the Bons Secours and Shanakiel hospitals and a further 302 private beds in public hospitals around Cork city and county.
Dr Sheehan also disputed a VHI Healthcare statement that CMC had failed to offer “meaningful savings” to VHI when negotiating cover, and said the CMC was on average charging 20 per cent less on the most common procedures.
VHI Healthcare rejected Dr Sheehan’s contentions, saying no verbal assurance was given to the Sheehan Medical Group regarding the CMC. While negotiations were not ongoing, a meeting was scheduled with the group today.
While Dr Joseph Sheehan was a founding shareholder of the Blackrock Clinic in Dublin and the Galway Bay Medical Centre and both have common shareholders with the CMC, they are both separate to the Cork facility and are not affected by the current impasse over VHI cover for Cork.