The Government's co-location hospital scheme contradicts its own health strategy and is more likely to harm the public system, writes Dr John Barton
The public has a bad perception of our public hospitals for a number of reasons, among them the crisis in our Accident and Emergency departments. This problem has arisen primarily as a result of the closure of hospital beds 20 years ago. In order to address the shortfall, the Minister for Health, Mary Harney, has asked the private sector to build private hospitals on public hospital sites, a co-location hospital strategy.
It is a potentially high-risk strategy as the private hospitals may close if not economically viable, a reality accepted by Ms Harney, when she indicated that the Government would not provide a safety net for the hospitals. Yet, for some extraordinary reason, the Government has decided to invest through capital allowances to investors more than €1 billion in private for-profit hospitals.
The €1 billion acquired from all taxpayers, those with and without private health insurance, is being invested primarily for the benefit of those members of society who can afford private health insurance, as those without insurance will not have a right to care in these private hospitals. If the Government was investing on your behalf in building beds in public hospitals, then all taxpayers would have a right to use those beds. These would be real public beds. The Government is in essence investing in inequity.
Why is the Government investing in private hospitals when we already have excess capacity in the private system? James Sheehan, founder of the Blackrock and Galway private clinics, has described the co-location policy as "a non-starter" and indicated that his new Galway Clinic has under-used bed capacity.
The Irish Congress of Trade Unions' health report published at the end of 2005 recommended that the Government abandon its co-location proposals. Economist Jim Power said the plan could create a "market failure" and advised that direct Government investment would represent better value for money. VHI medical director Bernadette Carr has indicated that some of the planned private hospitals will fail. In addition, with losses of €35 million this year, VHI is unlikely to be rushing to fund the provision of services in these new hospitals.
So why are the Government and this Minister investing your taxes in risky ventures and why are several hospitals and their medical boards throughout the State supporting this policy? Research on co-location by Dr Michael Wynne, University of Wollongong, Australia (www.uow.edu.au), and by Prof Ross Barnett, University of Canterbury, New Zealand, provides some of the answers. The Ictu health report also provides some reasons for this policy. There are certain advantages to investor-owned co-located private hospitals that explain support for this entity.
These include: reduced capital outlay for Government and quick delivery of infrastructure; sharing the costs of technology and intensive care; "hotel" facilities for patients; affiliation of the private hospital with a prestigious public hospital, enhancing the status of the private hospital in the public eye; greater financial returns to investors from access to private patients in the public hospital; increased incomes for doctors as investors and/or as practising clinicians; leveraged regulation of the private sector in planning bed capacity; cessation of two-tier public hospital care; reduction in Government subsidisation of the private sector and increased health sector employment.
But disadvantages may outweigh advantages. They include: loss of income to public hospitals from private patients; reduced quality in hospital care resulting from fewer qualified staff in private hospitals; higher premiums for private health insurance; higher costs to the taxpayer through Government subsidisation of health insurance premiums; an increase in overall costs to taxpayers for healthcare due to an increase in consumption, accentuated by a private health insurance payment system which encourages procedural over-supply; the drawing of key resources from the public system such as nurses, doctors and administrators trained at taxpayers' expense; the institutionalisation of two-tier hospital care; inequity in access to specialist care created by private health insurance; loss of motivation and autonomy for health professionals from competition in healthcare and the possible closure of private hospitals.
I am concerned about the medical profession's support of the Government's policy on co-location and privatisation. Recently, the Australian Medical Association in Victoria, which had supported similar Australian government reforms in the mid-1990s, changed its policy on hospital privatisation, stating: "The operating risks, in terms of range and quality of services are of such magnitude that they can only be safely borne by the public sector."
The Government's and this Minister's proposals should have been critically reviewed before implementation, as taxpayers' money is being used to further enrich wealthy investors, increase inequity in specialist care, increase unwanted capacity in the private sector and undermine the public sector. Health policy researchers and economists the world over recommend that governments invest in the public health service rather than use taxpayers' money to assist the private sector, because resorting to private finance is more likely to harm publicly-financed systems, and parallel private hospital systems do not significantly reduce pressure on the public system.
I believe we should have an equitable quality-driven healthcare service for all of our people, but as we can see from recent EU surveys we languish at the bottom of the health system league table. The Government and the Minister for Health's policy on hospitals will result in reduced quality and an increasingly inequitable hospital service, that is in complete contradiction to the principles of the Government's own health strategy announced in 2001.
• Dr John Barton is a consultant physician at Portiuncula Hospital in Ballinasloe, Co Galway