A look at the numbers shows that Mary Harney's co-location scheme will neither free up 1,000 beds in public hospitals, nor build beds more cheaply than by public tender, writes Dr Michael Gaffney.
The co-location project was initially announced by the then (and current) Minister for Health, Mary Harney, in a speech to the Seanad on May 31st, 2006.
It was originally planned to build 1,000 beds in private hospitals beside the following 11 hospitals: University College Hospital, Galway; University College Hospital, Cork; Waterford Regional Hospital; Mid-Western Regional Hospital, Limerick; St James's Hospital, Dublin; Beaumont Hospital, Dublin; Connolly Hospital, Dublin; Tallaght Hospital, Dublin; Sligo General Hospital; Letterkenny General Hospital, Donegal; and Our Lady of Lourdes Hospital, Drogheda.
It was envisaged that the 1,000 private beds so created would free up 1,000 beds in the public hospitals referred to above for public patients. It was stated by the Minister that 1,000 public beds built by public tender would cost €1 billion, whereas 1,000 public beds freed up by the co-location project would cost €480 million in terms of taxation write-offs.
For the scheme to succeed, therefore, 1,000 public beds need to be freed up and the freeing of the beds has to cost the Government less than providing 1,000 beds directly. Since the scheme was originally announced, Letterkenny General Hospital has been removed from it. Whether this relates to the number of beds in the hospital, which is approximately 280, and/or profitability of a co-located hospital there, has not been made clear.
Our Lady of Lourdes has been taken off the list as well, presumably because of its uncertain future. It has 339 beds.
University Hospital Galway, with 639 beds, is also out of the scheme. The reason for this is that Galway is already saturated with private beds and either the potential investors or the Department of Health, or both, saw the light.
The other change that has occurred since the scheme was originally announced is that a lower estimate of its cost was given at a pre-election conference attended by three Ministers who did not know what that cost was. An adviser opined that it would be €280 million provided there was a high level of buoyancy.
In other words the figure of €480 million would be lessened by €200 million if the hospitals yielded a satisfactory level of taxation revenue. This assumes that the co-located hospitals will have a high level of occupancy. This is by no means certain.
At present there are six hospitals definitely in the scheme: UCH Cork, Waterford Regional, Limerick Regional, St James's, Beaumont and Sligo General.
Based on figures from 2004, private patients account for 25 per cent of patients in public hospitals.
The aforementioned six hospitals have 3,183 beds between them. Twenty-five per cent of this figure comes to 796 private patients. When one considers that four of the above six hospitals include paediatric patients and Sligo maternity patients, the actual figure of private medical and surgical patients would be quite a bit less than 796.
It is impossible to see where the 1,000 beds will come from.
Many colleagues, including Prof Brendan Drumm, do not believe that the co-located hospitals will be able to take the seriously injured or very critical, high-dependency cases. I do not see them doing elective arterial surgery, for example. Having discussed the matter with colleagues in several specialties, I believe that no more than 30 per cent of the current caseload of private patients would be transferable to the new co-located hospitals. Most private patients are in the public hospitals because their conditions are not being treated in the private hospitals.
Thirty per cent of 796 comes to 239 beds. With six hospitals in the scheme, 239 beds would be freed up at a cost of somewhere between €280 million and €480 million, depending on the buoyancy referred to above.
I believe that the buoyancy would be lessened by the 761 remaining co-located beds which would be trying to compete in a very well-stocked private market.
Of course, if Connolly and Tallaght hospitals also come on board the situation will change. The total number of beds will be 4,220. Tallaght also has paediatric patients who will not be part of the scheme.
Twenty-five per cent of the above figure comes to 1,055 . This is the total number of transferable patients, 30 per cent of which is 317 patients. With the eight hospitals, 317 public beds would be freed up at a cost of between €280 million and €480 million. Again there would be a buoyancy problem, with 683 co-located beds looking for business.
As Dr Fergus O'Ferrall pointed out in The Irish Times, there will be a loss of income for the public hospitals, which rely on privately insured patients for 15 per cent of their income. Not alone will they lose this income, their A&E departments will get no financial compensation for tests done on co-located patients before their transfer.
What if the new co-located hospitals took every type of case, from the critically injured to the day cases? If they were to do so, only plan E-type patients would be covered, defeating the purpose of the plan.
The co-location scheme will neither free up 1,000 beds in public hospitals, nor build beds more cheaply than by public tender. I would like Ms Harney to build beds directly instead. Also, if the private hospitals want to get involved in the acute care of medium-complexity conditions, they should not require to be co-located to do so.
They should just go right ahead. After all, they did so before, not so long ago.
Dr Michael Gaffney is attached to the medical clinic at Barrington's Hospital in Limerick. The views expressed are his own.