Botched consultants' contract could cost taxpayer €50m

Taxpayers could be hit with a €50m bill after a blunder by health chiefs and Government officials who drew up the lucrative new hospital consultants’ pay deal.

The top medics’ contract – hailed by Health Minister Mary Harney as a new era for the health service – was agreed with doctors last year after four years of painstaking negotiations.

Under the scheme public-only consultants are not allowed to bill patients with private insurance, potentially forcing the state to pick up the tab for their hospital stay.

Health Service Executive (HSE) boss Professor Brendan Drumm admitted the embarrassing gaffe, telling the Dáil's public spending watchdog it came out of the blue.

Professor Drumm said: “I think we probably all didn’t see it coming as a by-product (of the consultants’ contracts).”

The HSE described the shortfall as a risk and said it had been identified during the long-running negotiations.

In a statement the organisation said: “It was impossible to definitively state this figure until such a time as we had a clear indication of the numbers of consultants signing up and the type of contracts they were agreeing to.

“We are working closely with the Department of Health and Children in order to minimise this figure.”

The HSE also said the new consultants contract will greatly benefit patients in the public system and the health service in general.

Fianna Fáil TD Sean Fleming said the €50m blackhole was a shocking revelation.

The consultants contract was agreed in January 2008 after four years of protracted hard bargaining and disputes.

Health Minister Mary Harney hailed the deal, claiming it signalled a new era for the country’s embattled health service.

Salaries and working hours were renegotiated, while some consultants took on public patient-only contracts.

It is thought around a quarter of consultants in public hospitals have opted for the public-only route.

Mr Fleming said the Public Accounts Committee had received a letter from the HSE about the impact of the consultants’ contract.

It warned the HSE’s income from private insurance would take a major hit this year.

“The implications are that the HSE’s income from private insurance will fall significantly during 2009,” it stated.

“The cash impact of this loss will not be experienced until late 2009, but estimates indicate a potential loss of up to €50.”

Mr Fleming berated Mr Drumm and the secretary general of the Department of Health, Michael Scanlan, claiming they should have known about the potential loss.

“Because of this you are now not going to be able to bill the VHI for the patients that they have privately insured,” Mr Fleming said.

“The taxpayer now, as a result of this, is not going to be able to charge a private health insurance company for the patient with private health insurance.

“That is an extra cost to the HSE and the Irish taxpayer.”

Prof Drumm said they would be working with the Department of Health to come up with a solution.

Mr Fleming hit back, claiming it should have been foreseen.

“To be saying now after the contracts are signed and the agreements are in place that you are now starting to negotiate with private insurers, this should have been done before these deals were finished,” he said.