Staff at the Cork Medical Centre (CMC), which opened last October, were told yesterday their contracts are being temporarily suspended for four weeks.
But following the VHI’s statement on Tuesday that it is not providing cover for any new private hospital facilities in Ireland this year, the hospital is unlikely to reopen.
All procedures have been cancelled with immediate effect.
Sheehan Medical, who ploughed €90 million into the facility, declined to comment last night.
The group went public on the stand-off last month. Its chairman, James Sheehan, warned unless VHI agreed to cover treatments at CMC, which was covered by Aviva and Quinn Healthcare, it would be forced to close within months.
He said VHI cover was essential to draw down several million euro second-phase investment.
In a last-ditch effort to save the facility, Mr Sheehan offered on Tuesday to match the terms and conditions that VHI agreed three months ago with the 263-bed St Vincent’s Private Hospital, Dublin.
But VHI said the offer was “not relevant” because St Vincent’s Private has been in existence since 1974 and offers critical services to VHI Healthcare customers in the provision of cardiology and cancer care.
Meanwhile, O’Callaghan Properties, which is working on planning issues for its €80m private hospital on Lancaster Quay/Western Road, said last night it intends to proceed with the project.
And separately, the Bon Secours Group, which operates the biggest private hospital in Cork, has confirmed that its board has not discussed its expansion plans with the VHI.
Meanwhile, fears grew last night for the jobs of more than 100 workers in Castleisland, Co Kerry, as a US firm Aetna confirmed it was reviewing its international operations.