Hospital puts staff on notice after just 4 months

SCARCELY four months after it opened, the country’s newest private hospital will today put its 75-strong workforce on protective notice following failure to convince the VHI to cover the facility.

It is understood financial institutions are reluctant to release further funding for the €90 million Cork Medical Centre (CMC) without written guarantees that the State’s largest private health insurer is on board.

This is a major setback for the 73-bed hospital, which had hoped to create 325 new jobs when the facility was fully operational. Staff are due to be briefed today by Dr Joe Sheehan, who is flying in from Chicago. Dr Sheehan is part of the Sheehan Medical Group, the hospital developers.

A spokesperson for CMC said yesterday that failure to reach agreement with the VHI meant CMC could not access second phase funding. It includes €3m from a US company and €5.2m from international investors.

However, in a statement yesterday, the VHI re-iterated its belief that there is excess capacity in the private hospital marketplace and it said CMC was first advised of this position in 2009. The VHI said despite this, they “chose to go ahead” with fitting out the new facility at a cost of €20 million.

VHI chief executive Jimmy Tolan met with CMC last week for further talks.

The VHI referenced a newspaper comment made by Dr Sheehan in October when he described the VHI’s failure to provide cover as “a concern but not a big one”.

CMC’s spokesman said yesterday the hospital’s financial advisors believed its experience “will affect the future financing of all medical projects in Ireland”.

Aviva Health and Quinn Health Insurance both provide cover at CMC but talks with the VHI, since 2007, have been unsuccessful.

It is due to open a suite of operating theatres on March 14 and had envisaged treating 39,000 patients a year.

The Sheehan Medical Group founded the private Blackrock and Galway clinics, where they have an agreement with VHI.