VHI rejects private hospital move

A €90m privately-developed hospital with the potential to create 250 jobs is to remain closed after the State-owned VHI said the facility is not required to meet its needs in Munster.

The Irish Examiner has confirmed that an application from Mater Private Cork to reopen the former Cork Medical Centre in Mahon as a 102-bed private hospital has been refused cover by the VHI.

It is understood that a letter was sent on Friday by the VHI outlining the reasons for refusal to the Mater Private, which hoped to build a bridgehead into the lucrative private health care market in Munster which is dominated by the rival Bon Secours Group.

The VHI has consistently argued that there is no need for another private hospital in Cork, despite a PricewaterhouseCoopers report commissioned by the Mater Private that argues that a need exists.

“We examined the application from the Mater Private Hospital in Cork very carefully and have concluded that there is no additional requirement for in-patient or daycare beds in the area,” the VHI said in February.

A spokesman for Mater Private Cork, which offered savings of up to 10% to the VHI on hospital charges, said last night that no decision has been communicated by the VHI to Mater Private regarding Mater Private Cork.

“We remain committed to this project, we are absolutely convinced of the need for additional private hospital services for patients in Cork,” said the spokesman. “We also believe competition is essential in the Cork region for the benefit of patients.”

The VHI faces a multi-million euro claim for damages from the liquidator of the original operators of the Cork Medical Centre, which failed in Sep 2011 with the loss of 75 jobs. Liquidator Kieran Wallace of accountants KPMG has begun High Court proceedings against the VHI on anti-competition grounds on behalf of the creditors of CMC.

A hearing in the High Court scheduled for Tuesday and Wednesday next is expected to deal with a VHI application for security for costs in connection to the litigation that the CMC liquidator has initiated

VHI is being accused of abusing its dominant market position when it decided not to approve the hospital for its members.


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