Jan O'Sullivan (Limerick East, Labour)
Link to this: Individually | In context

Question 24: To ask the Minister for Health and Children the proposed co-located hospitals which will qualify for tax relief; the projected amount of that relief; if she has been informed as to the timeframe within which these hospitals will be operational; the number of private hospital beds which will be provided in co-located hospitals; if it is intended that health insurers will be charged the full cost of treating private patients in co-located hospitals; the way public hospitals' budgets will be adjusted to compensate for the funding they currently receive for treating private patients; and if she will make a statement on the matter. [26456/09]

Mary Harney (Dublin Mid West, Progressive Democrats)
Link to this: Individually | In context

The Finance Act 2009 provides that the schemes of capital allowances for private hospitals and certain other health facilities will be terminated, subject to transitional arrangements for projects already in development. Provided that a co-located private hospital project conforms to the requirements of these transitional arrangements and otherwise satisfies the general requirements of the scheme of capital allowances, the tax relief will apply. The value of the tax relief in each case will depend on the level of qualifying capital expenditure.

The HSE estimates that from the start of building, the overall construction and commissioning period for the projects will be about 28 to 36 months. To date, project agreements have been signed on four co-located private hospitals involving a total of 976 inpatient and day case beds and of these, planning permission has been granted in respect of the Beaumont, Limerick and Cork projects. Preferred bidders have been approved for two other projects.

The HSE estimates that the loss of private health insurance income to the hospitals in respect of the six projects would be about €100 million, or an average of €16 million per hospital. This is in the context of their combined current budgets this year of €1.322 billion in public funding. This loss of income will be mitigated in part through income from the lease of lands and a potential share of profits from the co-located facilities. The question of the net impact on the budgets of participating public hospitals will be examined at an appropriate juncture.

Net losses of income are factored into the overall cost-benefit and value-for-money analysis for each project. It always has been an essential requirement that each co-location project demonstrates clear value for money to the taxpayer. The prices charged by private co-located hospitals in respect of private patients will be a matter for the hospitals concerned.

Jan O'Sullivan (Limerick East, Labour)
Link to this: Individually | In context

This project was announced four years ago, in July 2005, on the basis that it was a fast way of getting 1,000 extra beds into the system. Does the Minister accept that the project has been a failure from that point of view? We are four years on but not a single bed has been provided. Not a single brick has been laid for these co-located hospitals. Will the Minister consider abandoning the project at this stage, as it has not fulfilled its original intention? One of the criteria was that the HSE must be satisfied that all co-location proposals represent better value for money than building, commissioning and operating beds in the traditional way. More than 1,000 public beds are currently closed in Irish hospitals because of cutbacks. Would it not make more sense to provide funding to the public system to open those beds, rather than going through the whole process of building more beds at this particularly difficult economic period? According to what the Minister has just said, it will be 31 December 2013 before we can expect all these beds to be provided despite the fact that four years ago we expected they would all be provided by 2010.

Mary Harney (Dublin Mid West, Progressive Democrats)
Link to this: Individually | In context

The answer to that is "No". Among the reasons for the delay was the fact that planning applications were opposed and appealed to An Bord Pleanála, mainly by a former Deputy who is now a member of the European Parliament.

James Reilly (Dublin North, Fine Gael)
Link to this: Individually | In context

And by the Minister's Cabinet colleague from Cork.

Mary Harney (Dublin Mid West, Progressive Democrats)
Link to this: Individually | In context

No, I do not think he was involved in an appeal to An Bord Pleanála. He may have had issues concerning location. At around 1.30 p.m. Deputy O'Sullivan said her party wants to keep the VHI - which provides private health insurance and guarantees people preferential access to public hospitals and super-dooper hospitals - in State ownership, yet when we try to reduce the level of private activity in public hospitals by building these facilities there are also objections.

The representatives of St. James's Hospital came to me recently to make the case for the co-located facility. I invite the Deputies opposite to meet them and hear the compelling case they made. They said it would make such sense for their public hospital to have this facility provided. Perhaps the Committee on Health and Children would consider inviting them in. There is no other plan. There is no public money available.

Jan O'Sullivan (Limerick East, Labour)
Link to this: Individually | In context

Why not use the 1,000 beds that were closed?

Mary Harney (Dublin Mid West, Progressive Democrats)
Link to this: Individually | In context

That would be a lot more expensive. The reality is that when we put private patients into public hospitals, we pay for all the staff and all the diagnostics, yet only insured patients or those who can pay themselves can get into those beds. The State is paying all the overhead costs, including staffing, so that does not make sense.

Jan O'Sullivan (Limerick East, Labour)
Link to this: Individually | In context

No, it does not. It would mean changing the whole system.

Mary Harney (Dublin Mid West, Progressive Democrats)
Link to this: Individually | In context

I want to see people admitted to our public hospitals on the basis of medical need. Although it does not concern a member of Deputy O'Sullivan's party, it is ironic to see that I am being criticised in a County Louth newspaper by a public representative because a doctor who signed a public-only contract will not get a fee for private patients. That public representative of the Sinn Féin party calls it "ludicrous" that there will not be preferential access for these private patients. There is a mishmash of hypocrisy in all of this.

James Reilly (Dublin North, Fine Gael)
Link to this: Individually | In context

Most of it is emanating from the Minister.

Mary Harney (Dublin Mid West, Progressive Democrats)
Link to this: Individually | In context

All our current hospitals are co-located. Some 20% of the beds within them are ring-fenced for private patients only and I do not think that is acceptable.

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context

I will allow a brief supplementary question from Deputy Jan O'Sullivan.

Jan O'Sullivan (Limerick East, Labour)
Link to this: Individually | In context

The Minister knows very well that the Labour Party policy is that there should be no two-tier health system and everybody should be treated the same way. We should not have private beds in any public hospital, nor should we have the kind of system we have at the moment. It is disingenuous to state, on the one hand, that I am saying the VHI should stay in public ownership, while, on the other, the Minister is somehow suggesting that because of that I support private beds in public hospitals. Has the Minister considered how she will end the two-tier health system whereby we have private and public patients?

Mary Harney (Dublin Mid West, Progressive Democrats)
Link to this: Individually | In context

A major contribution to that is the new consultant contract where there will be a one-for-all list of diagnostics and there will not be preferential treatment. Under the Deputy's model of supporting private health insurance-----

Jan O'Sullivan (Limerick East, Labour)
Link to this: Individually | In context

That is not my model.

Mary Harney (Dublin Mid West, Progressive Democrats)
Link to this: Individually | In context

-----whether it is public or private, a VHI member has preferential access to public hospitals and super-dooper hospitals.

Jan O'Sullivan (Limerick East, Labour)
Link to this: Individually | In context

Not the system we currently have.

Mary Harney (Dublin Mid West, Progressive Democrats)
Link to this: Individually | In context

The Deputy wants to preserve that in State ownership, but I do not understand the strategic reason. They have preferential access to super-dooper clinics as well as private and public hospitals.

Jan O'Sullivan (Limerick East, Labour)
Link to this: Individually | In context

We want a universal health system.

Mary Harney (Dublin Mid West, Progressive Democrats)
Link to this: Individually | In context

The new consultant contract greatly improves matters, as we will see. It has only been in operation for a few weeks and there have already been complaints in Louth because of the one-for-all access. Co-location means that one will have virtually no private preferential access to public hospitals which have a co-located facility.

Jan O'Sullivan (Limerick East, Labour)
Link to this: Individually | In context

Because all the private patients will be in super-dooper private clinics.

Mary Harney (Dublin Mid West, Progressive Democrats)
Link to this: Individually | In context

In this city we have two co-located hospitals, the Mater and St. Vincent's. The St. Vincent's project, which was commented upon by a member of Deputy Jan O'Sullivan's party on the radio recently, is not even part of the co-location. St. Vincent's is a not-for-profit, private institution, which provides an outstanding service. They are building their own new co-located facility, which has nothing to do with this whatsoever, yet that was thrown in here. We need to inform ourselves of the facts.

Jan O'Sullivan (Limerick East, Labour)
Link to this: Individually | In context

We are very well informed.

Mary Harney (Dublin Mid West, Progressive Democrats)
Link to this: Individually | In context

The facts are that we need a lot of investment in our public hospitals. We are moving to an environment where more single rooms are required for hygiene and infection control. There is a huge capital expenditure involved. The tax regime we have had in place both for private hospitals and nursing homes has been very beneficial in delivering capital.