Jan O'Sullivan (Limerick East, Labour)
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Question 2: To ask the Minister for Health and Children if her Department has planned for the effect of the transfer of private patients from public hospitals where co-location is to proceed; the cost implications for the running of those hospitals; the staffing implications particularly where specialist clinical staff will be required in both hospitals; the way it is proposed that public patients will have access to the private facility; and if she will make a statement on the matter. [22312/08]

Mary Harney (Dublin Mid West, Progressive Democrats)
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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.

Jan O'Sullivan (Limerick East, Labour)
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I am confused. Is the Minister suggesting there will be two identical hospitals with, for example, two clinical teams from cardiology to orthopaedics on both sides? For example, in order to cover for someone needing appendectomy in the middle of the night, will two full teams be needed, one in each of the two hospitals? If someone breaks a hip, will full teams be needed in both hospitals to deal with all the different specialties? People who work in the hospitals are puzzled about that.

This initiative was announced three years ago. Its purpose was to bring extra beds into the system. Three years later no sod is turned on any of those hospitals. We are now told the banks may be holding up their development because, in spite of them being PPPs, they want a guarantee that the State will ensure there is no loss of money.

The public does not understand what will happen here. Will we have two completely separate hospitals? The Minister has often said that in the area of cancer a minimum throughput of patients is needed and that we should have eight centres of excellence. However, in all the other specialties we will separate the private and public patients and have separate groups of doctors delivering the service. I do not understand that and it does not seem to fit in with what she says about cancer and the need for specialists to deal with a large number of patients in any one specialty.

Mary Harney (Dublin Mid West, Progressive Democrats)
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I am surprised at the Deputy's question. St. Vincent's and the Mater in Dublin are two cancer centres with co-located facilities. There will be a single clinical governance on the site. Clearly, the whole purpose of the initiative is to free up approximately 1,000 beds. In the case of these six hospitals, we are talking about 600 beds. Those 600 beds will be provided for €80 million in addition to 300 day beds that are used for private patients, so we will get 600 inpatient beds and 300 day beds for €80 million. At the moment for €80 million we would get approximately 230 inpatient beds so it is terrific value for money.

In the main, the same consultants will work in both. Under the new contract of employment the private activity of consultants is greatly restricted. The idea is that the private work on fee-paying patients, who are paying themselves or through their medical insurance, would be done in the co-located facility. The idea is that the two hospitals would complement each other. When we announced this initiative, hospitals were free to apply to participate. The hospital boards, and in particular the medical boards, of the hospitals chose to apply for sanction under the initiative.

The idea for the initiative came from a group of consultants in a regional hospital, who suggested to me that if they could free up the 70 beds used by private patients they would cover those beds for public patients if a private facility could be built adjoining their hospital. When the idea was researched and analysed under the public sector benchmark, it proved it would deliver terrific value for money for the taxpayers. In terms of the capital cost, it delivers the beds for less than 50% of the cost of doing it the traditional way. In terms of the running costs, instead of getting 230 beds, we are getting 600 inpatient beds and approximately 300 beds in the rest of the hospital that are used for fee-paying patients but are not ring-fenced for private patients.

Jan O'Sullivan (Limerick East, Labour)
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Consultants will now be able to sign up to three different kinds of contracts. In addition, some consultants can opt to work entirely for private hospitals. How will it work? For example, how will it work in practice if a cardiologist signs up for one particular contract without the proper mix of public and private? Will we need another cardiologist in the private or the public hospital?

Mary Harney (Dublin Mid West, Progressive Democrats)
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As the Deputy knows, we have approximately 50% of the consultants we need and we will double that. We have advertised for 128 new consultants so that we will have consultant-delivered services. The arrangements will not be made centrally, but will be made on the ground at each hospital. The private provider will be responsible for the employment of all the staff to run the private facility. There will be no liability whatever on the taxpayers in that regard. There may well be people who will only work in the private facility. However, many of the doctors in hospitals such as St. James's and Beaumont will be people employed to work in the public hospital and will do their private work, which they are entitled to do if they opt for two of the contracts, in the private facility on site or in some cases under the existing category 2 contracts they can do that work off-site. We have three different contracts of employment for consultants. The ones who do full-time public work will only work in the public hospital. They clearly will not get any fees in addition to their full-time salaries. Therefore, the issue of working in the private facility does not arise in their case.

Jan O'Sullivan (Limerick East, Labour)
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There is grave concern among clinicians as to how this will work.

Mary Harney (Dublin Mid West, Progressive Democrats)
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There is grave concern among a tiny few clinicians. It is not the case with most clinicians that contact me, including clinicians that have contacted me over former Deputy Joe Higgins's objection regarding Beaumont. They are very upset about it.

Jan O'Sullivan (Limerick East, Labour)
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I hear a very different story.

Mary Harney (Dublin Mid West, Progressive Democrats)
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I think I might know to whom the Deputy is talking.