Brian Hayes (Dublin South West, Fine Gael)
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I move:

That Dáil Éireann:

noting:

the electoral success of candidates opposed to the Government's plans to build private hospitals on public lands;

that over 1,000,000 voters supported such candidates;

that the former Government which alone supported this plan lost its majority in the house and a total of nine seats;

concludes that no electoral mandate for this flawed policy exists; and

calls on the Government to abandon this flawed policy immediately.

I wish to share time with Deputies Flanagan, Clune, Crawford, Reilly and Creighton.

John O'Donoghue (Kerry South, Ceann Comhairle)
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Is that agreed? Agreed.

Brian Hayes (Dublin South West, Fine Gael)
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I pay tribute to Fine Gael's former health spokesman, Dr. Liam Twomey, who unfortunately lost his seat in the recent election. More than anyone else, Dr. Twomey was responsible for the very clear positions our party took up in the course of the recent campaign. He was a forceful parliamentarian whose presence will be missed in the House. I recognise the contribution he made as our party's spokesman over the past two and a half years.

Tonight and tomorrow night Fine Gael is asking Dáil Éireann to stop the most controversial plan to affect Irish health care in a generation. Handing over public land to private, for-profit hospitals does not have the support of the people and will serve to further entrench the two-tier health system which currently prevails. After ten years in office, the only big idea advocated by Fianna Fáil and the Progressive Democrats — now supported by their allies in the Green Party — is to hive off public landbanks at knock-down rates to private developers at considerable cost to taxpayers in taxes foregone. It is not a plan for patients but one which introduces unnecessary competition onto the grounds of our public hospitals.

This is not an experiment which can be altered. When the plan is up and running there will be no going back. It came not from the wishes of the people but from the wishes of Government without any consultation. There was no Green Paper, detailed cost-benefit analysis, Dáil scrutiny or accountability. The decision was foisted on public hospitals and the HSE because the Government decided it would look at only one option to provide additional bed capacity in the system. The effect of the policy in the years ahead is plainly foreseeable. Public and private hospitals on the same sites will be pitted against each other in direct competition. While some facilities will be shared in the interests of patients, they are not the ones who will gain most from the experiment. Under the new system, two hospitals will co-exist on each site with two types of patient, one public, one private. Competition between patients for limited intensive care beds will apply. Key medical personnel will be lured from public hospitals to private hospitals. New co-located private hospitals will pick and choose the procedures they offer. The new model represents a nightmare scenario for our health care system and it should be resisted by all right-thinking Members.

Last Saturday, the board of Tallaght Hospital in my constituency of Dublin South-West decided, as was inevitable, to proceed with a co-location plan. The decision followed many months of bullying and threatening behaviour by the HSE which warned that Tallaght Hospital would have to pay for some of the costs associated with the project if a positive decision was not reached. Faced with the real needs of patients for increased provision of beds on any terms, the hospital bowed to the inevitable. Like those of other hospitals, the board of Tallaght Hospital had no choice.

Just as there was no mandate for the radical shift in policy after the 2002 general election, no mandate for the co-location policy was produced in the most recent general election. Fianna Fáil and the Progressive Democrats lost nine seats. The PDs lost 75% of its Dáil seats and the Minister's vote in her constituency of Dublin Mid-West fell by 7%.

On what basis does the Minister believe she has a mandate to continue with this policy? At least 84 members of this House had clear unequivocal positions against co-location during and prior to the recent election campaign. Fianna Fáil did its usual thing by stating one thing nationally and bad-mouthing the Minister for Health and Children, Deputy Mary Harney, locally over the policy. However, I did hear the Minister put on record, in a recent radio interview, that this policy was and is Fianna Fáil policy despite the distancing of some members.

We are less sure about the position of the Green Party, which wrestled with its conscience on co-location and decided a review would be the price-tag for its participation in a Government where it was surplus to requirements. Even this major concession of review won by the Greens does not kick in until 2011, long after the damage will have been done. It is difficult to review a decision to enter into a 60 or 70 year lease. We need to know in the context of this debate how many co-located hospitals are to be built. The PDs states it is 11 hospitals while the Green Party states it is seven or eight after which its much heralded review will apply. Will the Minister be clear in her reply as to what exactly is Government policy on the number of sites to be advanced for co-location?

Two weeks ago, in this House, the Minister for Health and Children suggested my party and its leader had indicated a willingness to support her co-location plans in discussions she had with Deputy Kenny prior to the formation of the Government. I want to put on the record of the House that there is no basis for this suggestion, if it was made. Fine Gael never expressed support for the proposal to sell public land for private hospitals as the Minister proposed. What we were prepared to do was examine how improved public services, including beds, could be provided using the private sector to build new facilities.

Tonight, I want the Minister to put on record her view on whether Professor Drumm fully supports the Government's plans on co-location. His comments at a recent health summit, as reported in The Irish Times, highlight a clear difference between the stated position of the Government and that of the HSE. He stated on that occasion, "The co-location project, in terms of running the health services in Ireland, is not a significant issue for me". The CEO of our health service stated it is not a significant issue for him. He further stated:

My job is to run the public health service...We were asked to facilitate Government in terms of handing over sites and making sure that we got proper economic payment for them, but once that's facilitated then it really has nothing to do with us going forward.

This seems an extraordinary statement given the importance of the policy and its implication for the health service. Professor Drumm is not an irrelevant backbencher. He is the person responsible for co-ordinating the reform programme and moving ahead on many key issues in our health service. Did the Minister ever ask Professor Drumm to submit his views in writing or for his formal position on the issue of co-location? If so, I want her to publish it without further delay. A cloud is hanging over whether Professor Drumm and his colleagues in the HSE support this radical policy announced by the Minister and her colleagues.

Many Deputies asked the Minister to publish a cost benefit analysis on all aspects of this proposal. If this work has been completed, why did she decide not to publish the analysis in full? During the recent election campaign we saw the sorry spectacle of three senior Ministers, including the Minister for Finance, show an alarming lack of knowledge regarding the financial cost of co-location. Eventually rescued by a party official, they looked like the three stooges, seemingly unaware of the real cost and the likely financial implications. Before any contract is signed I want the Minister to tell the House the full lifetime cost for each co-location proposal.

Will the Minister guarantee to the House that all details of co-location including public private contracts will be open to public scrutiny? There must be no secret deals on public land and no secret deals with taxpayers' money. I do not want to hear that certain deals cannot be published on the grounds of being "commercially sensitive". This is not a matter for the HSE but for the Dáil and, ultimately, for the Government. These are public lands which are being offered as part of a tax wheeze. The public has a right to know what is going on and the terms of each of the contracts. Will the Minister guarantee to the House that she will publish the names of the beneficial owners of any successful consortium? I want that commitment in the House this evening.

Patient safety groups have legitimately raised concerns over the ownership and control of the newly proposed co-location private hospitals. The question must be asked how well prepared we are to police against fraud and what new measures are to be introduced to counter the threat of fraud in this sector. While HIQA can investigate complaints, what does it take to start an investigation?

Will the Minister tell the House exactly what land bank will be left after co-location on each of the sites and the proportion this represents on each site? It is crucial that a significant amount of land is set aside for the expansion of additional public facilities on the grounds of these hospitals. One wonders how we can ever build the necessary number of respite beds when such an amount of land is being handed over for private hospitals. Will the Minister guarantee in each case that the full commercial value of the land being leased is assessed by independent valuers?

Does the Minister intend publishing a new legislative basis for this arrangement? Is she proposing any form of registration or licensing system for the operation and governance of these new hospitals? Will a scoring system apply in each of the bids so that we can know exactly how these bids were won? The Minister should set out how the HSE proposes to assess the capacity of each consortium to provide quality medical care to patients and how they propose monitoring their capacity to do that on an ongoing basis.

We know from the debacle over Eircom some of the unforeseen consequences of privatisation. For example, will a successful consortium be entitled to sell the co-located hospital to a third party whenever it wishes? There is also the question of insurance. Will any insurance liabilities accrue to the State from the operation of these hospitals? Specifically, who will be responsible for the medical insurance of doctors operating within this hospital system?

It appears likely that some hospital consultants, working in public hospitals, will be investors or will have some financial interest in the proposed co-located private hospitals. Does this not lead to a risk of a serious conflict of interest? How does the Minister propose to deal with such a potential conflict of interest? Furthermore, what protocols does she propose to put in place to ensure that complex, difficult and expensive cases which arise in the co-located private hospital will not be transferred to the public hospital? What does she intend to do in respect of long-stay patients where a serious medical difficulty arises following treatment in a private hospital? Can the Minister make clear what level of regulation of patient safety there will be in the new co-located private hospital?

Throughout this process, the Taoiseach and the Minister have frequently stated that the co-location option is the best and quickest way to deliver more hospital beds. Both say it is much faster than the public sector. They seem to forget they have been in Government for the past ten years and we still do not have the much heralded 3,000 acute beds promised as far back as 2001.

Let us put this issue of the failure to deliver quality public services directly at the door of the Government, which has been in office for ten years. Since it has failed to deliver the necessary hospital beds, it has selected a quick fix solution which has potentially devastating long-term consequences for public health. There is no evidence, nationally or internationally, to support the contention that investor-owned private hospitals are more efficient than public hospitals. It is the continuing failure of the Government to deliver a proper system which requires a majority of our citizens to take out private health insurance. The same people, who have seen the cost of their health insurance double during the past ten years, will be asked to pay up for this untested model of care.

The motion tabled by my party represents a real litmus test for the Government. I appeal to those Members who said unequivocally before the general election that they opposed this measure to take a stand tonight and tomorrow and vote against the Government on this issue because once we go down this route there will be no turning back.

Charles Flanagan (Laois-Offaly, Fine Gael)
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I thank Deputy Brian Hayes for sharing his time in this important debate. It is fundamentally misguided to premise the country's health care system on ability to pay and to locate the private commercial investor at the heart of health care provision. A commercial "for profit" hospital care regime will only serve to reinforce the two-tier health system in this country. In recent times the ethos of the Irish public policy has moved away from the Berlin social model towards the Boston economic model as espoused by the Government and in particular the neo-conservatives who form the Progressive Democrats. We have witnessed the disposal of the some of the State's key assets in a range of sectors, particularly in communications, and the health services are now the next item for sale in the Government's determined rush to privatisation.

The philosophy that ability to pay should guarantee better services in health is in line with the mantra of the Progressive Democrats that inequality in society is good and necessary. However, market economics have little or no place in the health sector and in the delivery of health services. People do not choose to get sick and those who do fall ill should not be punished or disadvantaged for not having the means to avail of private health care. Our health service should be based on fairness, equality, justice and meeting the needs of the sick and ailing in society. We should be looking to the models of our European neighbours, many of which have excellent public health services. The United States is no beacon of inspiration in the area of health care. Its health care regime is elitist, expensive and fundamentally inequitable.

Our priority must be the provision of primary health care for all, the improvement of accident and emergency services, and the tackling of MRSA and other new super-bugs appearing on the scene. Instead, co-location has been elevated to cornerstone status of our health care policy at the expense of other vital services. It is ironic that the fundamentally undemocratic nature of hospital co-location reflects the fundamentally undemocratic reality whereby the one party that preached co-location more than any other was almost eradicated in the recent general election. There is, unarguably, no electoral mandate for co-location and yet it is now the policy of the Fianna Fáil, Progressive Democrats and Green Party Government, and has received the belated support of a number of Government-supporting Independents. Such a volte-face by parties that opposed co-location before the general election does little to strengthen the belief of our citizens in politics and the political process.

If hospital co-location goes ahead, it will result in a cherry-picking of patients from public hospitals with the consequence that public hospitals will lose out as vital moneys currently paid by insurance companies will not now be available for the public sector. This can only lead to falling standards in public health care and further demoralisation of health care workers who, across a broad range of health care vocations, already feel under threat and siege from the Government. The number of groups within our health care system that have a grievance with the present Minister grows on an almost weekly basis. A demoralised health care sector does not bode well for the future.

This country is now at a crossroads on health policy. If we do not cry halt to the relentless privatisation of the State's assets there will be little left when this already discredited Government leaves office. The Government is happy to take in billions of euro in taxpayers' money every year and ignore the basic concept of fair play in hospital care. Failure to invest in our geriatric services continues to force the elderly into private nursing homes and a further programme of "for-profit" health care is planned for community services. The Government was given a message by the people in the general election when 75% of the Minister's colleagues were unceremoniously removed from office. The Government ignores this message. Fine Gael is not willing to stand by and let the wishes of the people be trampled upon.

I endorse the comments of my senior colleague, Deputy Brian Hayes, in proposing the motion. The Minister should change her mind because this proposal is fundamentally unjust and unfair.

Deirdre Clune (Cork South Central, Fine Gael)
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It is proposed to build one of the co-located facilities at Cork University Hospital in my constituency. I am opposed, like my colleagues, to this poorly thought-out measure, which is being hailed as the solution to our health care problems. It proposes to deliver 1,000 additional beds to the system and, while they are badly needed, they should not be provided in the way proposed by the Government. The Opposition parties proposed to increase the number of hospital beds during the recent election campaign and the accident and emergency department task force highlighted the need to increase the number of acute hospital beds, but this should not be done in the manner proposed by the Minister, which is to sell public lands to develop private hospitals. The beds are badly needed but not at the price of giving away public land, which is valuable both economically and in the context of its location. This land will be lost forever to the expansion of public health care facilities and developments that could be proposed in this regard.

Will the Minister explain why the Government cannot build badly needed public beds and convalescent and step-down facilities on these sites to relieve pressure on hospitals and the accident and emergency department system in particular? The current system works well but it needs to be resourced and supported by the Government. The level of private care in our hospitals needs to be limited and, while such care has a role in our health system, the Minister should not give away public lands to provide additional beds.

The Minister needs to clarify the cost of her proposal because the electorate is unsure. Various figures have been bandied about and it has been estimated the proposal will result in €500 million in revenue foregone to the Exchequer over seven years, while the cost of private health care is estimated to increase by 40%. A total of 52% of the population avails of private health care. Private health care has a small but important role but public facilities need to be supported and developed. A stroke victim, a diabetic or a patient with a heart condition needs continuing care, which can only be provided through the public system. Private health care will deliver hip replacements or cataract procedures that can be bought through the National Treatment Purchase Fund but continuing care needed by those with long-term illnesses can only be delivered effectively by multidisciplinary teams in public hospitals.

I have spoken to many workers in the medical profession about this proposal. Doctors and consultants, particularly those who have worked in the United States, are very concerned that the State is going down the American route. As Deputy Charles Flanagan said, this proposal represents a watershed. Is the Government going down the Boston route or the Berlin route? It should examine how our European neighbours support their health services because we do not want a scenario where doctors make decisions based on the cost of a procedure rather than on its medical benefit.

I have spoken to members of the INO who are concerned that if a private hospital is located adjacent to a public hospital, nurses will leave to work in the private hospitals because working in a public hospital is very difficult. Anybody who has spoken to nurses involved in the recent strike knows they are concerned about the pressures on their profession. In particular, they are concerned about the pressures they have had to absorb and that people are leaving the profession on a daily or weekly basis. That is not good for nursing.

There are many concerns and many questions have been left unanswered about the proposed co-location system. I would like the Minister to again consider her proposals and not move forward with them. It is certainly not the way we want to move forward in our health care system. She should restore confidence to those working in the system and would-be patients.

Seymour Crawford (Cavan-Monaghan, Fine Gael)
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I congratulate my colleague, Deputy Brian Hayes, on raising this important issue tonight. He made an extremely good maiden speech on the health issue for which I applaud him.

There are many questions raised with this issue. What is the elected mandate in respect of it? As has been stated, the Minister's party has diminished considerably since the proposal was first made. I notice the Green Party, given all that its members have said in recent weeks, is conspicuous by its absence. I can only think of how Deputy Trevor Sargent would have spoken tonight if he was still on these benches. He was very vocal on the issue but his party now seems to have rolled over.

I attended a press conference this morning in the Earl of Kildare Hotel with people from counties Donegal, Carlow and Kilkenny among others who are extremely worried about the co-location and privatisation issues. When one considers the documentation provided for us at the press conference, showing who the people behind these issues are and the type of matters in which they have been involved in the USA, one must ask major questions. For example, how much research or knowledge is available on the matter? Is the Minister fully aware of the background and once again willing to turn a blind eye? Issues in which some of the companies have been involved certainly raise many questions. Why should we hand over taxpayers' hard-earned money, or more accurately, offer tax breaks to such persons?

It is extremely important that the economic and medical justification for this plan be clearly outlined to patients and taxpayers. As I understand it, the Department of Health and Children has not undertaken a detailed and comprehensive cost-benefit analysis to justify it. If it has, it is time the Minister published the analysis and made it absolutely clear from where the benefits will come.

I spent a few short days in the neurological section of Beaumont Hospital last year. I have previously stated in the Dáil that it does not take a genius to uncover the problem. We did not need the Teamwork group report from England or to make any trip to the USA to know that the one issue causing problems for nurses, consultants and everybody else in Beaumont Hospital was not the lack of theatres but the lack of beds. If one had looked out the windows of the hospital, he or she would have seen green fields where buildings could have been quickly constructed to house beds. Any company could build a hotel in a few months; why, therefore, can the Health Service Executive not build facilities to provide extra beds so as to release pressure and allow patients to be operated on?

I know I am not a genius but I could see patients in beds for weeks on end through no fault of a surgeon. Things go wrong but there should be a place where these people could go to allow operations to go ahead and the system to move forward. It is not difficult to provide step-down beds. However, there is a proposal to provide a brand new privately-owned hospital in the grounds of Beaumont Hospital with the offer of the gift of tax breaks to some individuals from the USA or elsewhere who have many questions to answer in their own right.

I cannot help but mention the issue of Monaghan General Hospital. It is clear that the Minister has an agenda to wind down the operation of small rural hospitals and small hospitals elsewhere to provide the so-called need for this private group of hospitals. I have heard people from County Donegal say that they have been told they cannot have cancer treatment services in Donegal but when it is proposed that a private enterprise would provide the required service, there is no problem in delivering it.

We must get real. We must make sure that money is used properly in this area. We must also ensure that proposed investors from outside this country are fully checked before they enter this market to ensure that we will not be caught out as we were with Eircom and others.

James Reilly (Dublin North, Fine Gael)
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It is important first to re-emphasise to the Minister that 58% of the electorate voted against the proposal to co-locate private hospitals on public hospital land. Why did they do so? Perhaps it was because they realised this is a very expensive way of providing public beds. The tax base will cost up to €500 million. The loss of revenue from private patients may cost up to €700 million. How is the shortfall to be addressed in the public hospital system, not to mention the loss of valuable land that was put aside to accommodate the future expansion of public hospitals?

Furthermore, there is the matter of the haemorrhage of medical personnel, both doctors and nurses, this proposal is likely to cause from the public to the private system, and the likely increase in the cost of insurance, as the need for profit encourages more investigations and tests. When profit becomes the bottom line, patient care can only suffer.

Given the existing dependence of some of the newer private hospitals on the National Treatment Purchase Fund to keep them afloat and the assumption that this will continue and possibly increase, does this imply continued starvation of the public health system so that the taxpayer pays twice for treatment? Evidence from the New England Journal of Medicine reveals that outcomes for patients treated in for-profit hospitals are not as good as those in not-for-profit hospitals.

This measure will do nothing to address the two-tier system in our hospitals, it will only further entrench it. It does not make increased provision for the training of junior doctors and does not address the need for rehabilitation and continuing-care beds in the community.

It is important to note that Ireland remains one of the lowest investors in the area of health. A total of 7.2% of GNP was spent in the area of health last year while the average spent in other EU member states was 8.6%. Germany and France spent in excess of 10% of GNP and the United States of America spent 15% of GNP.

I have heard other Members mention the American system and the argument that our system is closer to Boston than to Berlin. There is no doubt that we should be concerned about what has happened in America where those on the lowest income are looked after by the state while those who can afford health insurance are catered for. However, a rapidly expanding number of Americans, up to 60 million according to some experts, have no health insurance, and for them illness represents financial ruin. That is something we must avoid here.

Furthermore, because health insurance is so expensive, employers in America buy health insurance from HMOs. This has resulted in a situation where neither the doctor nor the patient has any say in who treats who. In other words, the doctors are tied through their contracts with the insurers and they must treat patients who have a contract with that insurer. The patient is tied to the provider organised by the employer. Therefore, if an employer changes his or her insurer, a patient who has been attending a doctor for 20, 30 or 40 years, suddenly will no longer be able to attend that doctor unless the patient pays for the visit, the cost of which is prohibitively expensive.

To recap, 18,000 beds were provided in our hospitals in 1983, today only 13,000 are provided yet 500,000 more people live here. Patients still spend three or four days on a trolley in accident and emergency departments while waiting for a bed and they have to wait for years to see a consultant. It was disingenuous to formulate waiting lists on the basis of the length of time people have to wait for treatment after they have seen the consultant. This does not take account of the length of time — in some instances, up to three or four years — it can take before one sees a consultant. Patients provided me with letters they received from their local hospitals which indicated that they would be obliged to wait for such lengthy periods before obtaining appointments to see specialists and go on waiting lists.

In light of the points I have raised and in view of the total lack of clarity surrounding the plan, I ask the Minister to reconsider and to deliver to the hard-pressed public health system the remainder of the 3,000 beds the then Government promised to provide in 2002.

Lucinda Creighton (Dublin South East, Fine Gael)
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It is my pleasure to support the motion. As Deputy Brian Hayes outlined, there is a series of problems and failings in the Government's proposals regarding the process of co-location. The decision to proceed with co-location amounts to little more than acceptance of the failure of Government policy in respect of the health service during the past ten years. The Taoiseach and the Minister for Health and Children stated on previous occasions — they repeatedly did so prior to the general election — that co-location is the cheapest and fastest way to bring about the provision of the badly needed hospital beds they promised in two programmes for Government. However, they have not acknowledged that co-location amounts to a failure on behalf of the State to provide, as ought to be the case, hospital beds through the public system.

It is disappointing the Progressive Democrats is giving up, as is clearly the case, on the prospect of achieving a competitive environment in the public sector and in the delivery of public health care. As Minister for Health and Children, Deputy Harney is, in effect, CEO of the health service and, as such, is culpable and responsible for this grave failure in the delivery of public hospital beds and of an effective and efficient health service.

In the aftermath of the general election, it is clear that there is no mandate in respect of the proposals relating to co-location. The Green Party — none of its members is present in the Chamber, which is extremely disappointing — campaigned against co-location, as did the Independents who are propping up this Administration. In my constituency and in many others across the country, Fianna Fáil backbenchers campaigned against co-location——

Brian Hayes (Dublin South West, Fine Gael)
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That is correct.

Lucinda Creighton (Dublin South East, Fine Gael)
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——on the basis that their party, if re-elected to government, would not deliver on the policy. However, they have since been bought off with additional junior Ministries and have suddenly become silent on the matter.

The Government has shown itself to be bereft of ideas on how it might reform the public sector and deliver public hospital beds. It has resorted to taking the easy way out by handing over responsibility for the delivery of urgently needed acute hospital beds to the private sector and providing the latter with tax breaks that are unquantifiable. Figures relating to the amount of taxpayers' money that will be spent on the tax breaks that will allow developers to build on public hospital grounds have not been laid before the House.

I wish to comment on the decision taken by the Government on the aspects of the public health service that function. In that context, I refer to the example of St. Luke's Hospital in Rathgar, in my constituency, which has been consistently rated as the best hospital in the country and which is being shut down by this Administration as it proceeds to hand over responsibility for the delivery of acute hospital beds to the private sector. There is a huge contradiction in that regard. What is happening is extremely disappointing. It highlights the lack of imagination and creativity on the Government benches in dealing with the crisis in the health care service.

The Progressive Democrats, Fianna Fáil, the Green Party and the Independents will sell out on the most vulnerable people in society, namely, those who are currently on long hospital waiting lists and who do not have the advantage of private health care insurance. These people will fall to the bottom rung in a system that will prioritise private development and private health care. The need for public beds to be delivered was acknowledged by the Government in 2001 and again during the term in office of the last Government. That it has failed to deliver on its commitment to deliver 3,000 extra hospital beds is an indictment of the current Administration. I hope the voices on this side of the House which were so loud before the general election will be heard again to ensure that the co-location proposal does not proceed during the life of this Government.

Mary Harney (Dublin Mid West, Progressive Democrats)
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I would like to share time with the Minister of State, Deputy Smith.

Joe Costello (Dublin Central, Labour)
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Is that agreed? Agreed.

Mary Harney (Dublin Mid West, Progressive Democrats)
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I move amendmentNo. 1:

To delete all words after "Dáil Éireann" and substitute the following:

"—supports the commitment in the Programme for Government to proceed with the hospital co-location initiative, which is designed to improve access for public patients to acute hospital care in a timely and cost effective way by freeing up 1,000 publicly funded beds;

supports the further commitments in the Programme for Government to ensure greater equality of access and care between public and private patients and, in particular, to provide an additional 500 beds dedicated to the needs of public patients; and

supports the Government's policy of encouraging the public and private sectors to work together in the provision of health care for the benefit of the entire population and encourages further innovation and initiative in this regard."

It is fair to say that Fine Gael's position has changed significantly since Deputy Olivia Mitchell, as the party's health spokesperson, told the Irish Nurses Organisation conference four years ago that competition in the private sector was the only way forward. It is clear from the contributions I have just heard that there are huge misunderstandings in this regard.

I join Deputy Brian Hayes in paying tribute to the former Deputy, Dr. Liam Twomey, who was an outstanding spokesman. I had a warm personal relationship with Dr. Twomey, who took his brief very seriously. Members of the health committee of the last Dáil did not do well at last month's general election. People like James Breen, Jerry Cowley, Paudge Connolly and Fiona O'Malley of my own party lost their seats.

Deirdre Clune (Cork South Central, Fine Gael)
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We will keep away from that committee.

Mary Harney (Dublin Mid West, Progressive Democrats)
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If I have any message for the Members of the new Dáil, it is that they should think again about becoming members of the health committee.

Jimmy Devins (Sligo-North Leitrim, Fianna Fail)
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Deputy McManus and I were lucky.

Mary Harney (Dublin Mid West, Progressive Democrats)
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Deputy McManus and I certainly survived. Deputy Clune, whom I welcome back to the Dáil, said we should build public beds. We have built the beds. We have ring-fenced 2,500 beds, which have been fully funded by the taxpayer, for the exclusive use of private patients. Does anybody in this House think that is fair? Is it right that we should say that the 2,500 beds which have been provided at the expense of taxpayers can only be accessed by patients with insurance or self-payers? The State pays the nurses who look after the patients in those beds and provides the diagnostic equipment and administrative backup that they need, but it does not allow people to access such public beds unless they are insured patients or self-payers. In implementing this policy, I am trying to provide that 1,000 of the 2,500 beds in question can be used by public patients.

I wish to comment on what will happen when the co-located hospitals are completed. I will talk later about the six hospitals that are involved at the moment — I have the figures in respect of them. The board of Tallaght Hospital agreed unanimously last week to proceed with co-location. The board was not bullied by the HSE. It was asked to decide whether it wished to proceed. I received the approval of the Government for this policy in July 2005. Since then, no hospital has been forced to propose any project. It has been open to individual hospitals to make co-location proposals if they wish to do so. A number of hospitals have done that. I understand that the board of James Connolly Memorial Hospital in Blanchardstown will shortly make a decision on whether it wishes to proceed. That will bring the number of hospitals involved in this process to eight. I am not aware of any further hospitals in this regard. We set out to convert 1,000 private beds for public use. When the co-location facility is in place in all those hospitals, every public bed will be accessed on the basis of medical need and on no other basis. There will be no preferential treatment in the public hospital system for insured patients or self-payers.

Charles Flanagan (Laois-Offaly, Fine Gael)
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Insured patients will not go into public hospitals when co-location is up and running. The beds will be free then.

Mary Harney (Dublin Mid West, Progressive Democrats)
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They will do so in the case of national specialties.

Brian Hayes (Dublin South West, Fine Gael)
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It depends on the procedure they need.

Mary Harney (Dublin Mid West, Progressive Democrats)
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The co-located facilities will have to provide 24-hour admission. That will be a new feature of private hospitals in Ireland. They will have to train doctors. Deputy Reilly said they will not train doctors, but they will have to do so. Their profits will have to be shared. If debt is being refinanced, public hospitals will have to benefit too. We will not have the situation that arose with a toll road recently, whereby a company got a contract that proved to be extremely lucrative 20 years later. Taxpayers will not be forced either to buy out such a contract or to assume the losses involved. That will not happen under these proposals.

I was interested to hear the maiden speech of Deputy Reilly, whom I congratulate on being elected. However, until recently, Deputy Reilly was a strong advocate of tax breaks for health provision.

Deputy Lucinda Creighton, whose election to the House I welcome, represents a constituency with a co-located facility, St. Vincent's Hospital. I am sure she is not suggesting that we should not have that hospital in her constituency. In respect of St. Luke's Hospital, all the expertise in Ireland and overseas indicates that stand-alone radiation is dangerous for patients and that one must, as Deputy Deirdre Clune said, integrate multidisciplinary care, with medical oncologists, surgical teams, pathologists, radiologists and radiation oncologists all working together in the interests of the patient. What is happening is that the radiation facility is being provided at St. James's Hospital. While the actual physical facility in terms of the hospital will remain there, it will probably do different things or may be for overnight patients. The treatment will be multidisciplinary and integrated because that is what patient safety requires.

That brings me to a point made by Deputy Seymour Crawford. My policy and that of the Government is to provide treatments for patients as close as possible to where they reside, provided it is safe to do so. In my view, patients in Ireland, like patients anywhere else, do not actually care how the facility is funded or who runs it. One need only talk to the many people who use the National Treatment Purchase Fund. What they care about is the quality of the treatment and the speed at which they can get it. That is what is important. Above all else, if somebody is sick or a member of his or her family is sick, he or she wants them to be able to access the best treatment as quickly as they can.

Deputy Brian Hayes asked me a number of questions. We will publish details in respect of each site. When that happens, the board of the HSE will meet on 5 July and I think at that point will select the preferred bidders on each site. Among the people who have come forward — the assumption here is that they are all people from outside the State — are the Bon Secours Group, which has a terrific record of health care in this country for many years; the Mater Hospital; and Mount Carmel. These are hospitals with a terrific track record so we should not assume that people in the independent sector in Ireland are not interested in getting involved in this as well because they are.

All the details in respect of each site, including the financing, will be a matter of public information. In respect of the costs, I heard a figure of approximately €700 million quoted here. The insurance foregone in respect of the six hospitals at the moment will be approximately €80 million. This is less than half the cost of running those beds. In respect of the site, no site has been given away. All of them will be leased at above the market value. There has been independent valuation. Many people and bodies have been involved in this, including the National Development Finance Agency, the Departments of Finance and Health and Children, the HSE, Farrell Grant Sparks, Prospectus and internal auditors. For each individual site, this project has gone through a procedure in terms of public procurement that we have not done in health care in Ireland before. All of the services being provided in this facility will be integrated with the hospital, which does not happen at the moment. Private hospitals emerge, are not integrated with the public system and do not necessarily complement the public system. This is different. What is being provided at each site is what each hospital wants. If patients do not have private health insurance, the hospital will be obliged to provide services procured by the HSE for these patients at discounted prices.

Lastly, in respect of the tax foregone, the maximum amount is approximately €455 million. The cost of providing these beds in the traditional way would be at least €1 billion. I think that is pretty good value for money.

Brian Hayes (Dublin South West, Fine Gael)
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What of Professor Drumm's comments?

Mary Harney (Dublin Mid West, Progressive Democrats)
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I have attended many meetings with Professor Drumm, including Cabinet sub-committees where we approved this, and he has never issued or expressed any reservations about it. Professor Drumm is right. His job is to run the public health care system. My job, as Minister for Health and Children, is to preside over a health care system to which everybody can have access. The issue concerns us getting private providers to provide services, like the National Treatment Purchase Fund does, which is not under the remit of Professor Drumm. Not all matters are under the remit of HSE. Professor Drumm's job as chief executive of the HSE is to run the public health care system.

Brian Hayes (Dublin South West, Fine Gael)
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Has Professor Drumm formally set out his support for the project to the Minister?

Mary Harney (Dublin Mid West, Progressive Democrats)
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Professor Drumm has never expressed any reservations. He does not get involved in policy making.

Brian Hayes (Dublin South West, Fine Gael)
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Is the Minister claiming the chief executive officer of the HSE does not get involved in policy-making?

Mary Harney (Dublin Mid West, Progressive Democrats)
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Yes, he does not get involved in policy-making. That is a matter for the Minister and the Government.

Brian Hayes (Dublin South West, Fine Gael)
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Was he never formally asked for his views on the matter?

Mary Harney (Dublin Mid West, Progressive Democrats)
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The HSE implements Government policy in health care.

Brian Hayes (Dublin South West, Fine Gael)
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That is very interesting. Professor Drumm has never been asked for a formal opinion on the project.

Mary Harney (Dublin Mid West, Progressive Democrats)
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He has never expressed any reservations to me or anyone else that I am aware of on this project.

Brian Hayes (Dublin South West, Fine Gael)
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That is quite astonishing.

Mary Harney (Dublin Mid West, Progressive Democrats)
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After the general election debate, in my view the co-location policy has emerged without a dent and without damage. That is because its central objective has always been, and remains, to free up publicly funded beds for public patients. The co-location initiative will achieve 1,000 new public beds faster and more cost effectively so there is better access to acute hospital services for all public patients.

Every Government has a mandate and a responsibility to consider and implement new initiatives in the public interest. This Government does and the former Government did also. It would be short-sighted for a Government to refuse to countenance any new idea in the public interest on the grounds it had not been spelled out in black and white in a party manifesto or a programme for Government. This would mean a Government had to close up shop for five years at a time on all new thinking and innovation. New ideas should always be welcome if they can be shown to serve the public interest and fit with the strategic objectives and policies of the Government.

The former Government sought and received a mandate for the 2001 health strategy which spoke of developing a strategic partnership with the private sector for the development of health services. It stated the private sector makes an important contribution to service needs which must be harnessed to best effect for patients and that a strategic partnership with the private sector will be developed in providing services for public patients.

I brought forward the co-location initiative in July 2005 on the basis that it was a new idea, consistent with Government policy, which would serve the public interest by freeing up more acute hospital beds more quickly for public patients. That was the basis on which my colleagues in Government endorsed it from the start and on which we continue to support it. The policy initiative has been brought to the point of implementation by the HSE. I am pleased to see our ideas are working out in practice and our objectives for public patients will be achieved.

In all publicly funded hospitals, private beds sit alongside public beds which are not routinely available to public patients. For many years, this has given rise to unfairness and inequity right in the heart of our publicly funded hospitals. These beds are heavily subsidised by the State, perhaps by as much as 50% of the running cost, yet they are not routinely available to people without health insurance or who cannot pay themselves. The co-location project will mean publicly funded beds in these public hospitals will always be available to all patients in order of medical need. This is a major advance in achieving equity in our public hospitals.

The initiative will free up designated private beds at each site. It will also mean that public beds will no longer be used for fee-paying private patients, as routinely happens. More beds will be freed up than the number of designated private beds because the designated private bed ratio is exceeded by private activity in many hospitals. In Tallaght hospital, it came to 46% of the elective work in 2005. The precise number of freed-up beds will be set out by the HSE when it shortly completes the tender process.

In service terms, this means there will be no cherry-picking in the provision of health services. Co-located facilities will be required to treat all private patients in public hospitals. The only exception will be where the HSE excludes certain activities on national health policy grounds, such as accident and emergency, radiation oncology and organ transplantation. All of us, regardless of whether we have private health insurance, are entitled to be treated in a public hospital as public patients.

The new private hospital beds will also be available for use for public patients, subject to service level agreements being put in place. As part of the capital allowances scheme, the new hospitals will have to offer services at a discount to the HSE. The National Treatment Purchase Fund has opened up access to private hospitals for public patients. I am confident this will also be possible with the new facilities adjacent to public hospitals. For example, if a bed is needed for a public patient awaiting admission at an accident and emergency department and all public hospital beds are full, those beds in a private facility can be used for his or her admission. This will shorten waiting times for admission for public patients.

There will be only one accident and emergency department at each public hospital campus in which every person will be seen in order of medical need. There will be no public and private distinctions and the new facilities will not be allowed to operate parallel accident and emergency departments.

In this, and in other matters, the initiative has built-in concrete protections for the public interest. In financial terms, the health care benefits must justify the costs, but in a way that is better value than under the traditional procurement methods.

A public sector benchmark, PSB, equivalent has been created for each site. The calculations include, for example, the cost of tax allowances and the foregone income earned heretofore by the public hospital from private beds. The National Development Finance Agency, NDFA, is financial adviser to the Department of Health and Children for this co-location project. The NDFA wrote to the Department yesterday to confirm that, in its opinion, the tenders provide value for money relative to the PSB equivalent at the current stage of the procurement process and that the project is in a position to move to the financial close stage.

The precise cost and benefits of each project depends on the financial profile of each of the successful bids. The HSE board is to meet on 5 July to approve the award of successful bids. In general, as regards costs, I can say the following. The capital costs to the State of the new public beds will be the value of the capital allowances used. This is necessarily less than half the actual construction cost, since relief would be claimed at the marginal income tax rate applicable at the time.

There is no validity to any objection that the new facilities will be built to too high a specification, that is, at a level that could not be justified in the public sector. First, the capital allowances scheme applies to only certain construction costs for new hospital facilities — consultants' suites are excluded, for example. Second, any over-specification would count as a negative in the evaluation, since the comparison with the equivalent cost under traditional procurement would show up excessive construction capital allowance costs. Third, the HSE has stipulated certain requirements in relation to the physical appearance of the new facilities, so that they fit with the existing public hospitals.

The capital allowance costs to the State will only come on stream after the new facilities have opened — from about 2011 onwards — and they will be spread over a seven year period. For every €1 million in allowable investment, the gross tax cost to the State would typically be €455,000 at current tax and PRSI rates, spread over seven years, without taking account of tax buoyancy from the activity generated. The actual expected capital allowance costs have been included in the financial evaluations by the HSE and the NDFA and are being submitted to the board of the HSE.

The current cost includes foregone income to the public hospital from private bed charges that will be no longer available. I understand this is under €80 million a year at the six sites. This is far less than the actual running cost of these publicly-funded beds. To offset the loss of this income, the State will receive: leasehold income from the land; a profit share from the operator of the new facilities; and a share of re-financing gains over the lifetime of the project. However, it is wrong to isolate this net cost of achieving new beds, without comparing it to the cost of running similar new beds under traditional procurement.

The average running cost per bed in the six sites is around €350,000 per bed per year. The running cost of 1,000 new, similar acute public beds at these sites, if procured in the traditional way, would be about €350 million. The net annual cost to the State of the new freed-up public beds will therefore be considerably less than the running cost if new public beds were procured in the traditional way.

I would further point out that detailed requirements are in place to ensure that there is integration between the public and private facilities. Some of these will be new for private hospitals. Before co-location, it has not been possible for the public side to make any requirements of private hospitals in regard to some of the following. For example, teaching and training of junior doctors will take place in the new facilities. The new hospitals will have to be capable of admitting patients 24 hours a day, seven days a week, from both accident and emergency departments and direct by GP referral. They will be required to facilitate a research culture that increases research activity and contributes to staff development and retention across both hospitals. They will report on activity to the hospital inpatient inquiry system and they will report to the performance management unit of the HSE.

Some public hospital consultants will be able to work at the new co-located facilities under the planned "Type B" contract, but it is our policy that new management methods will be in place to ensure an appropriate mix of overall activity on the site on the part of public contract holders. I expect these matters will be specified and finalised in the course of resumed contract discussions.

The co-location policy was drawn up as a means of increasing capacity in major public hospitals in innovative partnership with the private sector. It is fully in line with European trends, where public and private sectors are working in innovative ways, according to local conditions. An invitation to tender has been issued for a project at James Connolly Memorial Hospital with a deadline of 6 July for submissions.

I am pleased also that the board of Tallaght Hospital has now joined the boards of St. James's and Beaumont in seeking a tender. I do not believe any of these public interest boards would have done so had they not been convinced of the benefits to patients at their hospital campuses.

I am confident this initiative will command growing public support, beyond the majority already in favour, especially when the new facilities are up and running.

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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I join the Minister, Deputy Harney, in congratulating the newly elected Members of the House who are present this evening. I welcome back the Members who served in the 29th Dáil and wish them well during the life of the 30th Dáil.

As the Minister stated, the provision of private health care is a long-established feature of health care provision in Ireland. It involves a wide range of health practitioners and health care facilities, including general practitioners, dentists, pharmacists, chiropodists, private nursing homes and private hospitals. It has historically complemented the public health care system. This Government is committed to exploring fully the scope for the private sector to provide additional capacity in the health system. The key objective is to provide the required extra capacity, be it by the public or private sector.

A number of Government policies and initiatives support the co-existence of public and private health care. These include the designation of private and semi-private beds in public hospitals; income tax relief on private health insurance premia; income tax relief on medical and dental expenses; the work of the National Treatment Purchase Fund; and capital allowances for investment in the development of facilities such as private hospitals and nursing homes.

As the Minister stated, there are more than 13,000 beds in the 53 public hospitals. Some 2,500 of those beds, or approximately 20%, are designated for use by the private patients of consultants. However, the level of private elective admissions, that is, planned rather than emergency admissions, to public hospitals is currently running at approximately 35% of the total. This impacts consistently on the ability of public patients to gain access to public hospitals.

It is Government policy, as stated in the programme for Government, to implement the plans for the co-location of private hospitals on the sites of public hospitals, thereby freeing up beds for public patients. The co-location initiative was founded on the principle that all patients ordinarily resident in the State should continue to have access to public hospitals. However, access should be based on medical need only and possession of private health insurance should not influence how quickly one gains admittance to public hospitals or the treatment one receives when one is in a public hospital.

The development of private hospitals on the campuses of public hospitals is all about improving access for public patients to beds in public hospitals that are currently used by private patients. The idea is to migrate private patients from public hospitals to co-located private hospitals and thereby free up capacity for public patients and ease pressures on public waiting lists and accident and emergency departments. The private patients of consultants on the co-located sites will transfer to the new co-located private hospitals. Co-location-type arrangements have existed for many years at both the Mater Hospital and St. Vincent's Hospital in Dublin. The arrangement appears to have operated satisfactorily from the perspective of both public and private patients.

Co-location is the quickest and least expensive means of improving access for public patients. No capital outlay is required as the beds are already in place. In addition, the beds are already staffed and the backup services and facilities required to support them are in place. There will be a loss of income to the hospitals from private health insurers. This is a small price to pay in order to provide 1,000 beds for public patients. This loss of income will be mitigated, in part, through income the hospital will obtain from leasing the land to the private co-located hospital.

The co-located hospital will be capable of treating all of the private patients that are currently in the public hospital. The private co-located hospital will take patients from the public hospital's accident and emergency unit who require to be admitted and who have opted to be private patients of the consultant. The private co-located hospital will accept direct admissions to wards or to medical or surgical admission units from primary care centres and general practitioners 24 hours per day. The private co-located hospital will assist in improving access to research, development and teaching. It will be a separate legal entity and will assume all legal and operational risk.

The new competitive dialogue procedure, which became effective in February 2006, was the procurement process used for the project. On 23 May 2006, the HSE published a notice in the Official Journal of the European Union inviting expressions of interest for the development of co-located private hospitals, the provision of associated hospital facilities and the provision of certain medical services on 11 public hospital sites in Ireland.

Following an assessment of the expressions of interest, the HSE pre-qualified a number of bidders in respect of ten sites. Our Lady of Lourdes Hospital, Drogheda, was removed from the process due to the review of hospital configuration in the north east.

During the next stage of the process, the HSE engaged in competitive dialogue with the short-listed bidders with a view to identifying the hospital's core requirements, a service delivery model for each individual site. A number of bidders withdrew from the process for a number of sites for commercial reasons. This resulted in no bidders remaining for Letterkenny General Hospital and University College Hospital, Galway.

Based on the assessment carried out by the HSE, a set of minimum requirements was developed for each site. Such requirements prescribed a minimum threshold to be achieved in respect of the minimum service delivery model to be provided by the co-located hospital on each of the sites.

Between May and June 2006, the HSE issued pre-qualification questionnaires to all parties that expressed an interest in tendering. The HSE received responses from interested parties and undertook an evaluation of those responses.

In September 2006 the HSE issued an invitation to the successful candidates to participate in dialogue following the pre-qualification process. The invitation to participate in dialogue constituted a formal invitation to bidders to enter into a dialogue process with the HSE on the project. The pre-qualified tenderers submitted outline proposals to the HSE which it evaluated.

Subsequently, an invitation to continue in dialogue was issued to short-listed bidders, who were selected under the evaluation criteria set out in the invitation to participate in dialogue to be invited to continue in dialogue with the HSE. This document also set out details on the requirements for each hospital at each site and the criteria that would be used to evaluate tenders.

Invitations to tender for St. James's Hospital, Beaumont Hospital and Cork, Limerick, Waterford and Sligo hospitals issued on 19 April 2007. The invitation to tender for Connolly Hospital, Blanchardstown, issued on 11 June 2007. The board of Tallaght Hospital agreed on 22 June to continue its participation in the initiative.

The bids for the six sites were returned on 17 May 2007. Each bid was scrutinised by the HSE compliance team to check whether it conformed to the invitation to tender and whether it met the minimum requirements. All bids that satisfied the assessments for conformity with the requirements of the invitation to tender and met the minimum requirements were evaluated by the project evaluation group by applying the award criteria set out in the invitation to tender which was originally formulated on the basis of the policy direction issued by the Minister on 14 July 2005. These criteria covered value for money, financial sustainability, governance framework, service delivery, protecting the public interest, quality and innovation

The HSE will appoint the successful bidders in respect of St. James's Hospital, Beaumont Hospital and Cork, Limerick, Waterford and Sligo hospitals at the beginning of July.

Public procurement process requires that there is a standstill period of two weeks following notifications to successful and unsuccessful bidders before agreements can be signed. Successful bidders will have to apply for planning approval and undertake detailed design work. The entire process has been subject to the review and approval of an independent process auditor separately appointed by the chief executive officer of the HSE.

Establishing value for money in respect of this project has been a key objective of the HSE throughout the process. This was achieved by ensuring the bids received were able to satisfy value for money assessment criteria and also ensuring the financial offers received were better than the market value of the land to be leased to the successful bidders. The Government is committed to improving access for public patients to hospital care. It is not about who provides the service, whether public or private providers, but rather the range of services provided and their capacity to meet the needs of the population, their quality, the safety of the patient and the efficiency of the services provided.

Private patients of consultants have priority access to public hospitals at the expense of public patients. As the Minister outlined, she intends to give early effect to commitments in the programme for Government to ensure greater equality in access and care between public and private patients. The interests of public patients will be protected and promoted through the co-location initiative.

Liz McManus (Wicklow, Labour)
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I wish to respond to what the Minister, Deputy Mary Harney, said and I am sorry she is not in the House. In her reply to the Fine Gael motion she took the opportunity yet again to promote myths and I regard it as important to put the record straight. She referred to Professor Drumm and stated she had never heard his view on this project. I quote him:

We have to be extremely careful that we do not drive through the front gates of our hospitals and find the road to the left to the nice flowered structure with a fountain in front where those who can afford it go to that structure and someone else goes sheepishly in the other direction towards the HSE hospital.

That is precisely what will happen if there is co-location. With regard to Professor Drumm and the approach adopted by the Minister, I have written to her asking her to explain on what statutory basis she issued the directive to the HSE in 2005 to proceed with co-location. Serious legal issues are involved in her failure to reply to me. I again ask her to explain exactly what is the statutory basis for her directive to the HSE.

The Minister promoted another myth when she said her position was to provide beds and care as close to home as possible. There are 1,500 beds to be provided under the programme for Government, but the bulk of them, 1,000 beds, will not be provided as close to home as possible; under the scheme they will be provided where money can be made. It should be remembered that 1,500 beds is far short of the 3,000 which the Government considered necessary and well below the broad figure of up to 3,000 which the ESRI has given.

Another myth promulgated by the Minister this evening was that Tallaght Hospital was not bullied. We all know that it was, unless the Minister has some strange view about what undue pressure means. Tallaght Hospital needs 200 extra beds but it has not a chance in hell of getting them, unless it succumbs to the demand from the Minister and the HSE to go for co-location. I call that bullying, as would any reasonable person, but the Minister still comes into the House and promotes a myth.

The Minister refers to accident and emergency departments where there will be two streams. The money will follow the insured patient which will ensure patients with private insurance will be able to fast-track access to the care they need. This is the way of the world and the way it happens. It is another myth to presume that somehow things will be different in accident and emergency departments; they will not.

The Minister promotes the myth that private beds in public hospitals are solely used by private patients but this is not true either. They are certainly used by insured patients but private single rooms are also used to protect patients from the spread of hospital infections such as MRSA. They are also used for patients who are dying.

In one hospital, it was estimated that 40% of private beds were used for purposes other than to provide for insured patients. The Minister once again speaks as if private patients will go only to private hospitals, but that is not true either. Every patient in the State is entitled to attend a public hospital, and many of them will choose to stay there to gain access to its broad range of care. They may have to do so, but they may also choose to do so if they so wish. It is one part of the two-tier health service that we will see worsen rather than improve under this Government of Fianna Fáil, the Progressive Democrats and the Green Party.

The final myth is that private institutions such as St. Vincent's Hospital and the Mater Hospital started on the same basis as the new co-locate hospitals. Unless the Minister does not grasp the difference between a religious order and a for-profit corporation interested only in making money for its shareholders, she has deliberately muddied the waters instead of telling things as they are. That is surprising, since the Minister's reputation would suggest otherwise. Then again, many of us know better.

I congratulate Deputy Brian Hayes on his election to this House and his successful elevation to the position of his party's spokesperson on health. I regret the loss of former Deputy Twomey, who did an excellent job.

I forgot to mention that I would like to share my time with Deputy Higgins.

John O'Donoghue (Kerry South, Ceann Comhairle)
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Fifteen minutes remain.

Liz McManus (Wicklow, Labour)
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It is usual to congratulate a new Minister for Health and Children at the start of a Dáil, and I am more than happy to wish Deputy Harney well on her return to what is clearly a demanding post. However, I also wish that she would take some time to reflect. As a Deputy who saw her party decimated, she will understand that it has suffered most cruelly at the hands of the voters. Is it too much to ask that she learn some lessons from that experience?

One of the most contentious issues of the last election was the privatisation of the health service. That was spearheaded by the Progressive Democrats and adopted by Fianna Fáil; now it has been embraced by the Greens. However, as this motion outlines, that policy did not win majority public support in the election. The co-location of private hospitals on public lands is the most pernicious and extreme example of the Minister's determination to hand over significant elements of the Irish health service to the private sector.

The Minister has promoted herself — and members of her party promote her — as courageous enough to take on vested interests in health care. However, the curious thing about that claim is that her definition of vested interest extends only to doctors and health care workers. Far from being taken on, the predatory interests of the for-profit developers have been feather-bedded by the Minister to an extraordinary degree.

To be strictly accurate, that trend began before the Minister's appointment, but it was during her period of Cabinet influence. When a constituent approached the then Minister for Finance, former Deputy McCreevy, and asked for a handout, he received it in the form of tax relief on a private health facility. More handouts to the private sector followed the extension granted via the Finance Act 2002.

However, it was Deputy Harney who issued an instruction to the HSE in 2005 to facilitate the handover of scarce public lands to private, for-profit developers who would benefit from generous tax breaks. No analysis was ever carried out, no debate initiated, and no cost or health impact assessment conducted. That decision was ideological, but I once again note the Minister of State presenting it as a cheaper and quicker way to provide the desperately needed beds that the Government promised in its health strategy but never delivered.

The truth is that co-location is not cheaper and not necessarily quicker than providing public beds. There is a real cost through tax breaks. The cost is estimated at €70 million for seven years, which is almost half a billion euro. It has been estimated — our figures were based on Department of Finance ones — that one could provide around 1,200 public beds for the same money. There is a serious cost in the loss of income through insurance to the public hospitals. This cost in revenues forgone to public hospitals as a result of co-location is estimated to be €145 million per annum and possibly as much as €200 million per annum. There is a cost in the loss of public lands. We are all aware of the inflated cost of land at present. It is a finite resource and most sensible people would consider it folly to hand over such a scarce public resource in this way. There is a cost in the duplication of services and facilities because of an unnecessary fragmentation of provision of two structures on the one site. Private patients will be asked to pay the full economic cost of their care in the co-located hospitals and that will lead to a steep increase of at least 40% in their current private health insurance.

The Department of Finance, which one would expect to be very forthcoming in its support of this, in its memorandum dated October 2006 expressed serious concerns about the cost of this policy in terms of the loss of trained staff. Later on it expressed concerns about the soaring cost of private insurance and also about the failure to assess the land value issue.

The other argument of speed of delivery is similarly flawed. Mr. Tom Finn of the HSE claimed it would take 16 years to build a public hospital. That really tells us something about attitudes in the HSE and in regard to how the Government approaches this area. The reality is quite different. In Wexford General Hospital, 21 hospital beds were provided within 12 months. As soon as the hospital got the go ahead, it delivered the beds within 12 months. I was in Letterkenny General Hospital and an entire cancer oncology department was provided in 18 months. Perhaps the Minister is not aware of this but systems of construction on a modular basis can provide new facilities extremely quickly. However, that is not the kind of news she wants to give. She would prefer to give us the myths.

The Minister sent the order to the HSE in mid-2005. It is now 2007 and not a contract has been signed. According to the memorandum from the Department of Finance, it would take at least three years to provide these hospitals. Now the Minister is talking about 2011. That is hardly a fast track process but what is worrying — I referred to this earlier — is that the entire process may be tested in the courts if a developer is not accepted and feels hard-done-by.

I wrote to the Minister on 1 June asking for clarification on the statutory basis of her policy direction and I am still waiting for a reply. In the letter I pointed out that, in relation to the status of a ministerial direction, its subject matter must relate either to the Health Act 2004 or some other enactment and the subject matter must concern some matter or thing which the 2004 Act states is to be specified or determined by the Minister. I wrote that I would be grateful if she would let me know, as a matter of some urgency, how the letter of 14 July 2005 is believed to meet both of these two conditions — the second one in particular — in other words, in what specific way does the co-location of private hospitals on public hospitals' sites amount to a matter or thing in relation to which the Minister has a power under the Health Act 2004 to make specifications or determinations and so derive a power to issue directions under section 10. I am still waiting for that reply and it is important we get it. I would appreciate it if we could get it before this debate ends tomorrow night.

We have an example of private investment in the public health service which is called Beaumont car park. The Comptroller and Auditor General produced an entire report on the car park at Beaumont Hospital. If we had a system that served the public, the car park would generate income for the hospital. Instead, it generates income for private developers while its cost of construction was €13 million more with tax breaks than it would have been had the State built it itself. I fear we will end up in the same sorry mess but on a grander scale on foot of Deputy Harney's folly.

There is no doubt we will see a different approach to patients in for-profit hospitals. We will see procedures carried out that are quick and make money. Nothing the Minister does will change that basic difference between a for-profit hospital and a public hospital established to be dedicated to patient care. Because of the different ethos, cherry-picking will occur no matter what requirements the Minister introduces. To point that out is not to criticise the profit motive, but rather to state a fact. We will see a very different form of bed to the kind that exists for private patients in public hospitals currently. It is not a question of comparing like with like. However, the perverse incentives that operate in our two-tier system currently will be transferred to the new model. The fact that the incentives will operate in two-different locations on one site will not make a blind bit of difference. The money following the patient is the key and that will only apply to insured patients of whom there will probably be fewer as the cost of insurance is to rise as the Department of Finance has pointed out. There will be no empowerment of public patients whom money will not follow.

Given the problems in our public hospitals currently, it is scarifying to see the budget limits being set. Crumlin, Temple Street and the Mater Hospitals are suffering. The budget the HSE provides is not keeping up with demand. The experience of many years tells us that when hospitals reach the limits of their budgets, they simply close down services. They close wards and stop appointments, which are phenomena we may well see happen again. The danger is especially acute given the ending of the stream of income to public hospitals which has come through insurance. When the insurance money ceases, public hospitals will become completely dependent on the HSE whose budgets even now are failing to keep up with medical inflation, the demands of a growing population and increasingly expensive new technology and treatments. The two-tier system creates difficulties not alone for patients but for doctors in the context of medical ethics.

We must acknowledge the most pernicious aspect of the Minister's proposal. At a time when we have the resources to create a good quality health service for all the people, we have a political outlook which is determined to create conditions in which future integration of the health service will be far more difficult than it is currently. While integration represents a difficult challenge, it is the policy most Irish people would prefer. Had they the option, they would choose a service in which people were treated equally and with respect and dignity over the divided system we have currently. However, we are not to be provided with that. We will have what Professor Drumm outlined at the beginning. We will see the return of the old dispensary style of health care. It was formerly the case that the dispensary provided a poor-quality, undignified service for those who were too poor to go privately while the general practitioner provided for private patients. It was Erskine Childers, a Fianna Fáil Minister, who changed all of that. We now have a Fianna Fáil Government reintroducing and exacerbating a two-tier system in our hospital service. The dispensary model will now be the HSE public hospital where people will be treated in a markedly different way to what happens in a private hospital. This serves the patients extremely poorly and the excellent staff we have across the board in our hospitals are extremely disenchanted by the approach adopted by the Minister for Health and Children, Deputy Harney.

In many ways one feels a certain sense of despair that the lessons which were presented in this election in terms of people who voted for an alternative view to co-location have not been heeded. We have back in place a Minister who simply does not listen to the people and this is most regrettable.