HSE and Holles Street row centres on running voluntary hospitals

At its heart the row between Holles Street and the HSE centres on who really should call the shots in a publicly-funded voluntary hospital.

Should it be the State, which provides about €50 million annually to the hospital to employ staff, purchase necessary equipment and to operate services for patients. Or should it be the voluntary board of management which owns the facility.

Such arguments are an inevitable consequence of the hybrid healthcare model which has evolved over decades in Ireland.

For in Ireland the State has in essence out-sourced the running of much of its major public hospital system to voluntary organisations – most with historic religious links – to which it allocates billions of euro each year but does not control.

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Adding to the complications is the structural integration of public and private medicine in Irish hospitals.

Medical consultants employed by the State in many cases have contractual rights to treat fee-paying patients.

The Government actively encourages public hospitals to raise funds by accommodating private patients.

Private patients and/or their insurance companies generate more than €600million in revenue for public hospitals annually, without which the exchequer would have to dramatically increase funding levels.

Furthermore in the case of the National Maternity Hospital in Holles Street, it offers services such as in vitro fertilisation, through associated companies, which are not provided by the State.

Disputes between voluntary hospitals and government are not new. Voluntary hospitals guard their independence jealously and in the past there were clashes over, for example, what should happen to assess what was owned by boards if healthcare services were transferred elsewhere.

However the real trouble emerged when in recent years the Government sought to clamp down on top level pay in the voluntary sector.

Details of executive remuneration in voluntary hospital was a closely held secret for years.

Senior management in such institutions are, like the rest of the staff, considered to be public servants. They qualify for generous public service pensions at the end of their careers and pay rates were supposed to be in line with Government rules.

However, a series of revelations in The Irish Times in late 2013, based on HSE and Department of Health records, showed in many cases top managers were receiving thousands of euro in top up payments.

In a submission to the HSE internal audit team,the National Maternity Hospital contended that it derived its legal status from a charter established on foot of an act of parliament.

It argued strongly it was not a HSE institution but an independent voluntary hospital and that its charter contained provisions allowing the board to determine the terms and conditions of its employees.

How this will stand in future with Government policy which is based around standardised pay structures across the health service and a move towards the establishment of a network of hospital groups across the country remains to be seen.

It is also likely the Minister for Health will have to determine whether the pay arrangements and governance issues identified by the HSE audit – and disputed by the National Maternity Hospital – will have any impact on the planned move to a new purpose-built facility on the campus of St Vincent’s Hospital which will be largely funded by the taxpayer.