Mary Harney (Dublin Mid West, Progressive Democrats)

The aim of the co-location initiative is to make available approximately 1,000 additional public acute hospital beds for public patients by transferring private activity, with some limited exceptions, from public acute hospitals to co-located private hospitals.

The process for the development of the co-located private hospitals is governed in each case by a detailed project agreement between the public hospital and the developers of the private hospital. The HSE has retained external professional advisers in regard to the procurement, financing and legal aspects of the process in order to ensure that the public interest is protected at all times. Detailed provisions in regard to all aspects of the relationship between public hospitals and co-located private hospitals will be the subject of a service level agreement between the parties in each case.

The revenue cost to the public hospitals will be minimal. That is because the beds in public hospitals which will be freed up for public patients are already staffed and the back-up services and facilities required to support them are in place. The only staffing cost envisaged is the appointment of additional consultants, something that the Government is now doing in the light of the agreement. The loss of private health insurance income to the hospitals from private health insurers is estimated at €80 million in respect of the six sites where the co-location initiative is most advanced. That loss of income will be mitigated, in part, through income from the lease of the land and a potential share of profits from the co-located facility. It is recognised that provision will need to be made to allow the budgets of participating public hospitals to be adjusted appropriately to reflect the net private patient income forgone.

Public patients will have access to the private facilities under the service level agreements between the public and private partners. Under the terms of the Finance Act 2001, the co-located hospital must ensure that at least 20% of its bed capacity is made available to the HSE for the treatment of individuals awaiting inpatient or outpatient hospital services as public patients. The fees charged must be not be more than 90% of the fees that would be charged for equivalent treatment provided to a patient with medical insurance.

The staffing and operating costs of the co-located hospital will be a matter for the private partner. In accordance with the recommendation of the independent chairman of the consultant contract talks, discussions will take place between health service employers and the consultants' representative organisations on the practical issues arising from co-location, where appropriate.

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