Co-location hospitals are the key to a better healthcare system


Those on trolleys and waiting lists will not thank us for failing to deliver better treatment, writes Michael Cullen

WHILE OBVIOUSLY sincerely held, the views expressed by Fintan O'Toole and David Begg in their articles in The Irish Times this week criticising the hospital co-location policy are ideologically based and seriously flawed.

The benefits of the co-location policy are obvious to those not blinded by political ideology.

Public beds are freed up by moving private patients to co-located hospitals, leading to faster access for private and public patients with reduced waiting times

The country gets new hospitals, beds, operating theatres, radiology equipment, state-of-the-art IT and other essential medical infrastructure in a much faster timeframe than would be otherwise possible.

The State will derive a significant income from the tax generated by the 1,500 employees in the Beacon Medical Group co-located facilities in Dublin (Beaumont), Limerick and Cork University Hospital.

Concentration of expertise will result as consultants who wish to practise public and private medicine can do so within the same site, leading to greater efficiencies.

The State does not have to allocate capital expenditure for hospital infrastructure, allowing it to choose to purchase services from a multitude of competing providers at the best value-for-money and at no financial risk to the State.

The land on which the hospitals will be built is leased from the State at full market value. The State will receive an income for land that is not being used but has been designated for further development.

The public hospital does not have its public beds to treat private patients and saves considerably as it is unable to charge the full economic cost.

The public hospital will receive a percentage of any profits from the co-located private facility as well as income from car park, retail etc.

The public and private facilities will co-operate where capacity issues arise. Similarly, medical equipment and other infrastructure may be used by both.

Universal health insurance (UHI) is a goal to which we all aspire. However, it is only workable in a market where there is sufficient capacity to care for all those who require healthcare. UHI requires that the State provides equally for the healthcare of each citizen . . . it does not imply that the State has to deliver that healthcare. We need co-located hospitals to deliver the urgent requirement for capacity.

Neither O'Toole nor Begg suggest a realistic, viable alternative to co-location's fast and efficient provision of new facilities. Having a problem for every solution is not going to solve any problem in Irish healthcare.

Risk equalisation is not the sole justification for co-location. It has never existed in the Irish market and yet 53 per cent of the population have private health insurance (PHI). It is ridiculous to assume that PHI costs will increase so much so as to make it prohibitive.

Begg's outdated estimates suggest that co-location would cost the Irish taxpayer €400 million to €500 million. In fact, the State will benefit to the tune of up to €600 million for each completed facility, of which there are eight planned co-locations not 11. This represents an actual net gain of approx. €4 billion.

Both articles incorrectly argue that the banks and promoters are looking to the State to underwrite the banks' loans in the event of a hospital co-location company collapsing. This is not accurate.

No one is suggesting that the State must underwrite any private sector loan. However, the State cannot benefit by unjust enrichment and take advantage if any company goes bankrupt. If the State wished to take over a facility in the event of insolvency, it should have to pay for that facility.

What does O'Toole mean by "the Government policy of Americanising our health system is in deep trouble" ? By allowing private sector involvement in the delivery of healthcare, the US model is not unique.

Many other countries have successfully implemented policies which include private sector provision of various services within the sector.

We as a country need to learn from other countries and implement the best policies whilst avoiding the pitfalls of the worst. Does O'Toole really believe that the Government, the Minister, Department of Health, the HSE and the 100,000-plus people working in the Heath Service are trying to do a bad job?

Co-location is not a replacement for the provision of public hospitals - it is complementary to public hospitals and is entirely compatible in a country where half the population is privately insured.

In the absence of the co-location initiative there will be little or no hope of any similar public facilities provided in our generation.

Those on trolleys and waiting lists will not thank us for further delays in delivering urgently needed extra healthcare capacity. I believe that O'Toole and Begg will agree with us on that.

Michael Cullen is CEO of Beacon Medical Group which built the Beacon Hospital, Sandyford, Dublin and has contracts to build co-location hospitals in Cork, Limerick and Beaumont, Dublin.