Tuesday, 5 December 2006
Question 48: To ask the Minister for Health and Children the basis on which her Department has estimated the sum of €111 million as the loss of revenue of private beds to public hospitals under the collocation plan; the breakdown of this figure by hospital; if she has estimated the additional costs patients will incur due to this plan; and if she will make a statement on the matter. [41698/06]
The figure of €111 million is an estimate by Health Service Executive of the amount the ten public hospitals selected as sites for collocated private hospitals charged private health insurers in 2005. I was informed by the HSE yesterday that, as a result of the ongoing public procurement exercise, the collocation initiative will not be proceeding on two public hospital sites at this time. These are Galway University Hospital and Letterkenny General Hospital. Leaving aside those two hospitals, the figure reduces to €88.6 million. I will arrange to have a table sent to the Deputy giving the breakdown of this figure for the eight hospitals concerned.
The loss of private insurance income to public hospitals arising from the collocation initiative must be seen in the context of the freeing up of 1,000 beds that are currently reserved for private patients and the significant benefits the HSE expects to receive in return for the concessions granted to private operators. Public patients will not incur any additional costs arising from this initiative. Whether private patients will pay more in collocated hospitals than they currently pay in private beds in public hospitals depends on the charges that may be set by the new private hospitals. In any event, it has been the policy of the Government since 1999 to move to full economic charging of private beds in public hospitals.
Members do not often make the case for private patients in this House, but it is important to consider everybody who will be affected by this strategy. When 1,000 beds are moved from the public sector to the private sector under the Minister's privatisation plan, an additional €110 million — or €86 million as we are now informed — of lost income to BUPA and VHI will have to be added to the €14 billion required to manage the health service.
It seems the Minister is valuing the loss of income from each of these beds at €110,000 per year. This is a totally false economy. No private hospital can operate a private bed for €2,000 per week. It is simply not possible.
I will. I estimate that each of these beds would require a contribution of between €5,000 and €10,000 per week if these hospitals are to survive.
On this basis, does the Minister agree the cost to VHI and BUPA will be between €250 million and €500 million, rather than the €86 million to which she referred? Does she accept her plan will make it absolutely impossible for young families and elderly people to maintain their private health insurance? We will have plenty of shiny new private hospitals but people will be pushed out of the health insurance market. Such developments will come at a massive cost to private patients. The Minister must concede that when one takes into account other costs that will arise in regard to private health insurance, this plan will double premia within three years.
I am confused by the Deputy's response. He asked me what it would cost to convert these beds to public beds. The cost for 85 beds in the ten hospitals would come to just under €90 million. It must be remembered all nurses and staff are paid from the public purse. I have a problem with the taxpayer heavily subsidising private beds in public hospitals. Those beds are only available for that cohort of the population.
The Deputy is saying that the half with private health insurance should get preferential treatment in hospitals funded by the taxpayer, over and above other people who could be sicker. I do not agree with that.
The cost of providing these beds in the traditional way would cost €1 billion — €1 million per bed. The maximum cost of providing them in this way will be €480 million. From a capital cost perspective, the figure saved will be €520 million. We normally paid for all administrative, nursing and other health staff. These will be paid for by the private provider. No group of workers was paid for those patients' care except the consultants. It was not a good system and was not one which people could stand over.
There are competition issues for private providers. Legal and competition issues must be taken on board if a facility in a public hospital can supply a service at a considerably reduced cost because it is heavily subsidised.
Private patients are already paying taxes. The Minister is turning her back on the public health system with the co-location plan. She does not care how inefficient it is or how much it will cost. She expects VHI and BUPA customers to fork out for her cock-up. How much will a private health insurance patient pay on extra premiums because the Minister turned her back on the public system?
I am usually accused by the Deputy of privatising the health service. It is ironic that he has changed his position. Until very recently he accused me of giving public land to private providers.
As we increase the costs of private beds in public hospitals, which has been the Government's policy in the past seven years, so too will the price of private health insurance increase. In the UK, only 11% of the population belongs to a private health insurance scheme.