HEART BEAT:A scheme founded on the same kinds of tax breaks that have already created havoc, writes Maurice Neligan
THE IRISH Medical Timesheadline of August 29th, 2008 reads: "Co-located hospitals credit crunch."
In discussing funding implications for their development and listing some of the entrepreneurial names involved, it quotes Tom Finn, assistant national director of the HSE's National Hospitals Office (wow), as follows: "Clearly it would be foolish to think the current climate will not have an effect, but banks have to lend money to stay in business, ultimately the co-locations will be banked and they will come to fruition within two or three years. I don't have any doubts about that."
I would not invest in a co-located hospital, nor would I support any financial institution that chose to do so. Quite apart from any moral considerations, and these are many, I would consider it a bad investment, on fiscal grounds.
This divisive scheme, based upon an absurd plan to "free up private beds in public hospitals", is founded on the same types of tax breaks that have already created havoc in our economy. We may be slow learners, but for God's sake hopefully we're not that slow.
Look around you and note the half-empty hotels, unsold apartments and houses, and unlet commercial premises which stand as monuments to collective Governmental folly.
It is seemingly of no consequence to the Minister and her teeming cohorts that those decanted from the public beds to these ill-defined and uncosted entities have in fact every statutory right to the beds they presently occupy.
Likewise, it did not seem obvious to these genii that the provision of a mere 30 beds per existing hospital could achieve the same result. It is also ignored that 1,000 beds is not nearly enough to meet the needs of a vastly increased and ageing population.
On practical grounds, however, there are compelling reasons one should not invest in such nebulous institutions. Any such hospital needs a volume of paying patients to survive and repay its development costs, let alone develop further.
Oh! And let's not forget the real reason - to make a profit. Such patients are insured either personally, or through employment-based group schemes, with the VHI, Vivas or similar. Some patients are paid for by the National Treatment Purchase Fund (NTPF). Overseas patients and those paying from disposable income constitute a negligible minority.
Lest we forget, we already have a group of excellent private hospitals which, between them, account for most of the hospital expenditure of the insurance groups. It is no secret, either, that some of these hospitals would go out of business were it not for the artificial prop of the NTPF.
This half-baked concept was conceived in good times, no matter how artificially contrived. Now, indisputably, our prosperity is not increasing. We are in, or very close to, recession.
The problems arising are legion, and only the very rich are untroubled by the negative consequences of our present situation. This obviously has an impact on activities such as private hospital developments shielded by iniquitous tax breaks.
In such times the pool of insured patients, currently more than 50 per cent of the population, is not going to grow. It is going to contract as some of those currently insured lose their jobs or emigrate.
Many folk faced with inexorable increases in the cost of living, including the cost of health insurance, will take an unhappy but hard look at all aspects of discretionary spending.
Others, struggling around the minimum wage, those on fixed barely adequate pensions, those unemployed or disabled have no such dilemmas. They are dependent on what the State has inadequately provided in services, which in the current climate are not going to improve.
The potential patients of these institutions have choices. They are hardly likely to forgo mortgage payments and lose their houses. This would be the last option.
What comes next - smaller cars, a single car, and no car? Overseas holidays and even overseas property are dispensable. What about private school fees? What about private health insurance?
There are many more smaller discretionary items which will be jettisoned as the economy and personal circumstances contract. Do we leave the golf club or the gym or whatever? Individuals and families will exercise different options.
Some will choose to let health insurance go, rationalising that they are entitled to free hospital cover anyway. This is happening already, and will become more obvious as subscriptions reach renewal dates.
Some will reduce cover. A fall in numbers and a lessening of cover will, of course, inhibit the ability of the insurers to fund the postulated "pig in a poke'' co-locations. That part of the equation is simple.
The other part of the equation is equally simple. There are, and have been for many years past, major cutbacks in medical services. There are increasing and inequitable inadequacies.
Nobody believes the "there will be no cutbacks in frontline services" mantra of the HSE and this discredited Minister. The people can see for themselves. Accordingly, the other proposed prop of co-location looks distinctly shaky.
Lastly, the Minister responsible for this grievously socially divisive measure tells developers and potential investors: "You're on your own lads, we'll not be bailing you out."
No, I wouldn't invest in co-located hospitals.
• Maurice Neligan is a cardiac surgeon