Co-location: let’s get the mix right

UNDER the co-location plan, a number of 100/150-bed commercially independent private hospitals will be built on the grounds of our larger public hospitals.

The intention is that beds in the public hospital will be freed up because private patients will no longer require public hospital care.

But it is unreasonable to expect a 150-bed private hospital to duplicate the functions of a large public hospital. The staffing levels required would make it financially non-viable, even if health insurance rises significantly.

So it’s not going to happen. Many patients with health insurance will still need admission to the public hospital, depending on the complexity of theillness and the level of dependency of care required. That is not a problem for the patients, as we all have a statutory right to public hospital care.

However, it creates a financial problem for the public hospitals because, under co-location, it appears the public hospital will lose the right to charge for treating insured patients. This will be a welcome bonus to the health insurers but a significant loss of income for the hospital as it still must provide the care.

Meanwhile, the private hospital will have unused capacity and will be looking for other revenue streams. As the public hospital will continue to be overburdened, the obvious answer is a contract whereby the private hospital treats non-insured cases which are suitable for the services it provides.

So, the likely outcome, on clinical and commercial grounds, is that when our illness is of low to medium complexity, we can expect to be treated in the comfort of the private hospital. And when our illness is of medium to high complexity, we will remain in the public hospital, whether or not we have health insurance. This is a sensible outcome from the clinical point of view.

But what about the money?

Unfortunately, when public funding is spent in the private sector, the record on value for money in health is not good. A useful example is the National Treatment Purchase Fund (NTPF) which has a budget equivalent to 2% of the National Hospitals Office to spend in private hospitals, but which has difficulty achieving treatment for 2% of patients.

Even though the fund is careful to select less complex patients, the 2006 annual report shows that the NTPF only managed to buy 17,000 planned tests or treatments and a small number of outpatients (7,000) for €74 million. If any of our public general hospitals produced a detailed annual report, we would see that a similar amount of money goes much further — €74m spent in a public hospital would yield larger numbers of tests and treatments for the full range of cases (planned and emergency; straightforward and complex), much larger numbers of outpatients and, of course, the full service of a general hospital.

It is too easy to see the ‘value’ of private hospital care but only the ‘cost’ of public hospital care. In this new future, we will all need both public and private systems, so we all have a vested interest in ensuring that the balance of funding matches the work done.

Dr Christine O’Malley

Consultant Geriatrician

Nenagh General Hospital

Co Tipperary

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