The decision by the VHI not to include co-located hospitals under its insurance plans has been criticised by the chief executive of the Beacon Medical Group.
The co-location project, introduced by former Minister for Health Mary Harney in 2005, aims to free up beds in public hospitals by moving private patients out of public beds and into new on-site private hospitals.
The project has had difficulty getting funding from banks, partly because of the VHI’s refusal to cover hospitals, according to Beacon Medical Group chief executive Michael Cullen who says the project would create 3500 new jobs and provide 700 extra hospital beds.
VHI Healthcare said it believes there is sufficient private capacity in Ireland and that it is unable to fund any additional private beds.
In a statement today, the healthcare provider said it was not a party to the original co-located contracts and had not had sight of their contents.
The nature of any private hospital development does and must involve risk taking, a spokeswoman said, adding Beacon Medical Group is “asking VHI to guarantee the future economic viability of its proposed co-located hospitals and we are not in the business of providing such guarantees for any for profit private hospital provider".
Speaking on RTÉ's News at One, Mr Cullen disagreed with the VHI's view that there were sufficient private hospitals in the State.
"One only has to look at Irish Nursing Organisation surveys and trolley counts every day. There are waiting lists of up to three years for orthopaedic operations in Limerick," he said.
Mr Cullen said private patients were effectively leeching off the public system adding that “the public patient is subsidising the private patient through this anomaly in the regulations”.
“Currently VHI cover patients going to Beaumont, Limerick and Cork every day. Tonight there’s probably 180 private patients in each of these facilities. However, VHI only pays for about 50 to 60 of those 180 patients”.
He said Ms Harney had articulated support for the project many times right up to last December, adding “unfortunately, what she didn’t do, she didn’t persuade the VHI to cover us,” Mr Cullen said.
He claimed the project would benefit the State and patients. “By us opening our three hospitals in Cork, Limerick and Beaumont we will create jobs, we will create 700 extra beds”.
The Beacon Medical Group was founded by cardiothoracic surgeon Prof Mark Redmond, businessmen Michael Cullen (chief executive) and Paddy Shovlin in 2002. Businessman John Delaney is also a director. It won HSE issued tenders to build and operate co-located hospitals on the sites of Beaumont, Mid-West Regional and Cork University Hospitals.