An expansion in the number of private "for profit" hospitals, boosted by anew tax relief, will increase bed availability but probably at a cost for patients, writes Maev-Ann Wren.
Blackrock Clinic founder and orthopaedic surgeon Mr Jimmy Sheehan has been the most vigorous lobbyist for tax relief for the development of private hospitals, documents released under the Freedom of Information Act by the Departments of Health and Finance confirm.
Mr Sheehan has already begun building a 101-bed private hospital in Galway, and has plans for a further hospital in Liffey Valley.
He successfully lobbied for tax relief for hospitals run as charitable foundations, which was introduced in the 2001 Finance Act. However, in an interview with The Irish Times, he has objected to the extension of this relief to for-profit hospitals in the most recent 2002 Finance Act.
The inclusion of for-profit hospitals followed representations from the then chief executive of the Independent Hospital Association of Ireland, Mr Michael Heavey.
Mr Heavey is now negotiating the purchase of the Aut Even Hospital in Kilkenny from the Sisters of St John of God, in partnership with a cardiologist, Mr John Clarke. As the purchase of an existing facility, this will not benefit from the new tax reliefs, although it will be run as a commercial concern, according to Mr Heavey.
"I do not think it is appropriate to our healthcare needs to have for-profit hospitals springing up," Mr Sheehan has said.
Mr Sheehan is a shareholder in the Blackrock Clinic, in which BUPA, the British healthcare group, has a 56 per cent stake. He now says he regrets the structuring of the clinic as a "commercial concern" and the perception of it as "a fancy hospital for the elite".
He says his new hospitals will be run as charitable foundations. He believes that neither doctors nor insurance companies should have shareholdings in hospitals. Insurance companies "may end up dictating the quality of care", while for doctors a shareholding represents a "conflict of interest".
Mr Sheehan also recently criticised the sale of the Mater Private Hospital by the Sisters of Mercy to its management.
This, while contingent on it retaining a Catholic ethos, did not require it to operate as a charity. He supports the imposition of Catholic ethics in his hospitals, which, like the predominantly State-funded Mater and St Vincent's hospitals in Dublin, do not permit the performance of procedures like female sterilisation.
The provincial of the Mercy order, Sister Helena O'Donoghue, has responded that the order will invest the greater part of the proceeds of the sale of the Mater Private in facilities in the public hospital which would not otherwise be funded by the State.
The profits of the now independent private hospital would go to servicing its debts for at least 20 years, she suggested.
Hospital consultants at Beaumont, the public hospital in north Dublin, are currently negotiating with the Australian Ramsay Healthcare group about the size of their shareholding in a 150 to 170-bed private hospital proposed for the site of the public hospital. Ramsay Healthcare has a stockmarket listing in Australia and reported profits of AU$17.7 million (€10.6m) on a turnover of AU$431 million (€257m) in 2001.
Consultants at Beaumont were denied a private hospital on the site when Labour's Mr Barry Desmond was minister for health in the 1980s. Mr Desmond argued that permitting consultants to invest in a for-profit hospital would give them an incentive to increase their private practice at the expense of public patients.
A further lobbyist for tax relief was a Dr Madden, who proposed a £16 million "health park" in Carlow.
The Department of Finance estimated in 2001 that the State would contribute £16 million over a seven-year period to the cost of Mr Sheehan's Western Medical Clinic.
In return for a State contribution of 42 per cent of the construction costs of new hospitals, the legislation requires them to make 20 per cent of their beds available to public patients at 90 per cent of private fees. The size of the qualifying hospital was dropped from a minimum of 100 beds to 70 beds this year.
While Mr Sheehan has expressed confidence that politicians and insurers will support his Galway hospital, the future of the private hospital sector is contingent on the outcome of the election.
If the Government is re-elected and delivers on the health strategy, demand for private care might reduce. If it did not do so, the two-tier divide might be deepened by the development of these hospitals.
If the Labour and Fine Gael proposals for introducing compulsory health insurance for the entire population were introduced, these hospitals could conceivably supply healthcare needs to all patients on an equal footing.
However, this would imply that public health funds would contribute to the profits of overseas healthcare corporations and domestic entrepreneurs.