Critics of Government plans to create 1,000 more hospital beds are allowing ideology cloud their thinking at the expense of helping patients, argues Mary Harney
Government policy is to provide more hospital beds. We have put in place 1,500 more acute public hospital beds since 1997 and we are planning 450 more in our capital investment programme up to 2009.
In addition, I announced a policy last summer to free up 1,000 new public beds in our public hospitals, by using private investment.
There has been a determined effort since then from the Labour Party and others to attack this policy on a number of grounds. First, they claim it is privatisation. It is nothing of the sort, since it creates public beds in public hospitals.
Second, they claim it is bad value for the taxpayer. In fact, it saves taxpayers €520 million in capital costs and substantial running costs. Third, fears have been raised that the quality of patient care will fall - a groundless claim.
And lastly, it was even claimed in the Dáil last week that these new hospitals could treat patients from Asia - a bizarre and irrelevant objection.
This opposition is a classic example of ideology getting in the way of solutions for taxpayers and patients.
The 1,000-bed policy builds on the realities of the Irish health system. We can create these new public beds because of the unusual way we have funded private beds within our public hospitals over many years.
There are about 13,255 beds in public acute hospitals. Approximately 2,500 of these are designated for private use: that is, consultants may charge fees and hospitals may charge private patients for overnight stays.
The capital cost of these beds was funded 100 per cent by the Exchequer. They are staffed by public service staff, including non-consultant doctors, nurses and other hospital staff.
About 60 per cent of the running cost is recovered from insurance companies for private patients, but there remains a 40 per cent subsidy.
There are also about 1,800 acute beds in private hospitals in Ireland, apart from psychiatric beds.
A lot more private work happens in public hospitals than the designated ratio of 20 per cent private beds. It amounts to about 25 per cent of all activity, but in some public hospitals, private admissions have gone over 40 per cent of elective admissions. This is neither sustainable, equitable, nor the best use of public funding.
If the public sector builds 100 new beds at a hospital, it has to meet the full capital cost, roughly, €100 million. If the private sector builds the new facility, the capital cost to the Exchequer is reduced to a maximum of 48 per cent, with full capital allowances used. The public hospital gains 100 freed-up, new public beds for all patients, without fees being charged.
For 1,000 new public beds, the saving to the Exchequer will be €520 million. This is nearly the equivalent of one year's health capital budget.
To ensure these savings are realised, the HSE will assess proposals so that the capital cost is not excessive.
The running cost of the private beds in public hospitals is largely met already by the Exchequer. However, two factors give rise to new costs. First, public hospitals currently earn overnight charges for private beds. When private beds are moved out, hospitals will no longer earn this income.
For 1,000 private beds moved out, the "loss" to hospitals would be approximately €145 million (on the basis that we move to full economic charging of private beds in public hospitals, in line with Government policy). We are prepared to fund service needs arising from this "loss".
Second, the Government is also prepared to appoint an appropriate number of new consultants so that services to patients in the freed-up beds are provided with consultant expertise.
Even with those two factors, the cost of a newly freed-up public hospital bed will still be much less than the full running cost of new acute hospital beds, currently about €400,000 annually.
New nurses and other staff will be hired by the private sector for the new facilities. No matter how we finance 1,000 new beds, there will be a need for more nurses. Nurses who care for patients in existing private hospitals are already represented by the Irish Nurses' Organisation. The 1,000-bed policy simply builds on existing arrangements.
It will also be open to the new hospital facilities to hire, or offer admission rights, to consultants who do not hold public contracts.
The HSE will be in a position to contract for services from the new hospitals and from those consultants. This policy is emphatically not privatisation. It is creating new public beds in public hospitals to be managed by the public sector.
A policy that invited the private sector to run public hospitals would be privatisation - but that is happening in Sweden, not Ireland. A policy that says the public sector should manage public beds and the private sector manage private beds is not privatisation.
Nor will it involve the creation of two-tier hospital services. Public and private hospitals can and will work together on one campus. We will still, under this policy, retain a significant number of private beds within our public hospitals. It will also be open to the HSE and to the National Treatment Purchase Fund to buy services for public patients from the private facilities.
The HSE will now invite proposals that meet criteria for value for money and effective service integration. This will include training of doctors and protocols for transfers of patients. I know many hospital consultants will have no difficulty in agreeing arrangements to assure the HSE of their public service commitment in the existing hospital.
We already have a mixed system of financing and providing hospital services in Ireland, and we have had so for centuries.
It should be remembered that the operators of the new hospitals may be not-for-profit as well as for-profit institutions, from Ireland and elsewhere. There is no necessary connection between the finance raised with tax allowances, and the nature of the hospital operator. The indispensable condition is that the operators of the new hospitals will not have recourse to the Exchequer as a safety net. There is no State guaranteed return on this investment.
There is no evidence from Ireland that private hospitals - for-profit or not-for-profit - have a lower patient safety or quality of care record than all others. Academic argument rages about this in the United States, with a very different health system, and one I have no interest in replicating here.
In Ireland, the same consultants, largely, have treated patients in both public and private settings. I do not believe those consultants would accept that their patient care is lower in one location than another.
The bottom line is that patient safety must be systematically assured in all hospitals, both public and private. Quality care is driven by factors like clinical standards, volume and specialisation, not by the corporate status of the hospital operator.
I will promote accreditation and clinical audit for all settings, irrespective of their financial structure. I would urge support from medical organisations for all measures to assure quality care for patients.
This policy has been thought out thoroughly. It will work for patients and for taxpayers.
Mary Harney is Tánaiste and Minister for Health