Mr. Philip McAnenly:

Mount Carmel Hospital opened in 1949 but was acquired in 2006 by an investor. On 24 January last, this investor petitioned the High Court to appoint a liquidator to take possession of the assets of the company. The High Court appointed provisional liquidators on 24 January to effect the full cessation of the business of the hospital. This resulted in the loss of 382 jobs and the closure of 130 beds. Adjacent hospitals, including St. James's Hospital, Tallaght hospital and St. Vincent's University Hospital, all had high numbers of patients admitted to their emergency departments at the time the hospital closed. In fact, today there are 419 patients admitted in hospitals without a bed. The National Maternity Hospital, the Coombe hospital and the Rotunda Hospital, the three Dublin public maternity hospitals, have consistently reported that they are operating at 30% above their capacity. In recent months, Mount Carmel Hospital had been treating a large number of patients from public waiting lists. In addition, the HSE had contracted 25 beds to alleviate overcrowding in acute hospitals.

To give the committee some factual information, a number of investors made a bid recently to buy the hospital as a going concern. One bidder had concluded a due diligence exercise and had take-over funding in place. Linked to this, St. James's Hospital had agreed to manage and operate Mount Carmel Hospital on behalf of this investor. The interest of St. James's Hospital is important for a number of reasons. First, it would allow the hospital to transfer patients and services to Mount Carmel Hospital and thereby create capacity for the planned new children's hospital on its site in Dublin 8. Also, St. James's Hospital planned to reduce its waiting list numbers with the extra bed and theatre capacity opened up by the usage of Mount Carmel Hospital's facilities. Following NAMA's rejection of this bid, these opportunities have been lost.

With regard to occupancy, throughout 2013 bed occupancy increased at Mount Carmel Hospital from a low of 20% in March to near full capacity at the end of the year, prior to the hospital being liquidated. The higher occupancy was mainly as a result of the HSE contracting 25 beds to relieve the chronic overcrowding that has plagued acute hospitals in the region. These hospitals are repeatedly in the news for having a chronic over-crowding problem. In particular, Tallaght hospital, Beaumont Hospital and Connolly Hospital immediately benefited from the access to these 25 additional beds. St. James's Hospital and the Mater hospital also stood to benefit within weeks. The 25 beds were contracted by the HSE because the public health service is unable to cope with current demands for health care. This additional capacity has now been lost.

As regards waiting lists, 2,300 public patients were prioritised to be taken off waiting lists and have their operation promptly carried out at Mount Carmel Hospital. A total of 1,100 public patients, including children, had their operation carried out, with a further 1,200 public patients having scheduled appointments for operations. Many of these individuals had been waiting three years for an appointment. Our Lady's Children's Hospital, Crumlin, Letterkenny Hospital, Naas Hospital, Sligo Hospital, Tallaght hospital and St. James's Hospital all benefited from this waiting list initiative. The 1,200 people have now been returned to public waiting lists with little, if any, prospect of having their procedure completed. The 1,100 patients now return to an over-crowded public hospital system for their follow-up care and outpatient appointment. This additional capacity is now also lost.

Recent statistics show that there are 60,000 people waiting on public waiting lists for operations. The members have been furnished with figures which are submitted by the HSE to the health sector trade unions' at the bi-monthly national joint council meetings. The latest figures confirm that nursing whole-time equivalents, WTE, employed in the public services have reduced by more than 5,000 since March 2009. This reduction records a loss of almost 1,000 posts since December 2012 alone. I point this out in the context of a number of nurses and midwives now going into the jobs market and finding it almost impossible to rebuild their careers elsewhere. The reductions were effected by the moratorium on recruitment during a period of continued increased demand for our public health services. The members of the committee have the waiting list figures for each of the hospitals.

I will now outline the immediate cost to the Exchequer. The Social Insurance Fund will meet the cost of all the redundancies. At a conservative estimate, this will cost the public finances between €6 million and €8 million. In addition, with 328 workers applying for jobseeker's allowance, at a conservative estimate it will cost the Exchequer approximately €4 million per year. It should be borne in mind that an additional 64 staff are currently at the Labour Relations Commission in talks with the employer regarding redundancy, so we expect there will be a further hit to the public finances in respect of jobseeker's allowance. The loss of VAT and PAYE receipts to the public finances is conservatively estimated to be €7 million per year.

It has been widely reported that the aforementioned bid failed due to it being approximately €2 million below what NAMA was prepared to accept. It would appear that 382 jobs have been sacrificed for a balance of €2 million, while the public finances suffer by €17 million immediately, and a potential ongoing cost of €11 million per year thereafter. A considerable number of public patients will have their operations delayed. Our public health care system will come under additional pressure as a result.

Mount Carmel Hospital made a loss of approximately €1 million in 2013 on a turnover of €28 million to €30 million. Staff accepted a number of cost saving measures in 2012 and 2013 as a result of the pain and hardship of the Haddington Road agreement being extended to those employees. The effect of that will not flush through the system until 2014.

This would probably have resulted in the hospital breaking even or showing a profit.

We have a number of recommendations we would like the committee to consider. There should be an examination of why the public finances have been allowed to suffer a significant hit when this could have been avoided by modest funding of Mount Carmel Hospital. The hospital site should be re-opened immediately as a health care facility to relieve the chronic overcrowding in our public hospitals. Preferential transfer arrangements should be put in place for staff at Mount Carmel Hospital to ensure their service is reckonable in the public superannuation scheme. Staff who secure a job in the public system should not be subject to the altered career-averaging superannuation provisions.

There seems to be a perception and misconception at large that Mount Carmel Hospital was a maternity hospital. Maternity services formed a very small part of the overall services. Of the 130 beds at the facility, only 25 were provided for maternity services. A significant part of the work included general surgery, orthopaedic work, ear, nose and throat work, and paediatric surgery.