The objections are to co-location are both philosophic and pragmatic. There is a fear that because the new clinics will be expected to make a profit (or at least to avoid incurring a loss), that quality will inevitably be compromised, which in turn will make them a hotbed for health-acquired infections.

But this argument conveniently ignores the fact that the duty of care to hospital patients includes the provision of clean facilities, an area where many public hospitals have recently been found wanting. There is a deeper concern that the real, long-term costs of co-location are being hidden from public view and could remain so because of confidentiality clauses in the contracts.

A related fear is that the off-balance sheet-financing mechanism makes the scheme look cheaper than it is. The essence of the principled argument, on the other hand, is that a policy which transfers scarce public resources to the private sector, instead of using them to improve the public sector, is morally and politically wrong.

Robbing income

The concern here is that co-location will reinforce the worst effects of the existing two-tier system, robbing underfunded public hospitals of income from insurers, and forcing patients and clinicians into the private sector.

However, that line of thought ignores the reality that the exchequer is chipping in a further €300 million in subsidies for private beds in public hospitals, on top of the €80 million that will be forgone when the expected complement of 1,000 private beds are moved to the new private clinics.

There is, no doubt, at least some truth in all of these arguments, and the situation is not helped by the general lack of hard information in the public domain.

Left the station

While most people accept that the co-location train has left the station, the problem is they don’t quite know where it is heading, which creates a feeling that if the wheels come off, the costs– both financial and otherwise– may be considerable.

That said, the basic shape of the scheme is now clearer. With just under 1,200 inpatient and day-care beds planned to come on stream in six locations, our hospital system should be unrecognisable in five years time. The fact that there are fewer sites than was first expected is no surprise, though it has fuelled a belief in some quarters that the scheme was not properly worked out at the start.

Never a runner

In Galway, for example, the plan for a third private acute hospital– to be located on the grounds of the University College Hospital– was never a runner. Instead, there is to be a €20 million clinical research facility, embedded in the hospital and the university.
That development shows that co-location, in some instances, is as much about ramping-up expertise through further training, and achieving closer collaboration between doctors and scientists, as it is about delivering hospital care. In other parts of the world, it is already accepted practice.

In the UK, for example, the mission of the Cambridge University Hospitals Trust is to create a dynamic interaction of clinical care, education, research and economic contribution, through co-locating these activities on a shared campus. In the US, a 15-year project is underway to develop and integrate speciality hospitals into the University of California, San Francisco.

Vhi has recently warned that co-location creates the risk of healthcare inflation. It is certainly proven that costs increase as capacity expands, but it is not hospital co-location per se, which is the key driver.

Nightmare scenario

The nightmare scenario for the private hospital sector is that the insurance base simply will not need or utilise all of the extra capacity, which is being provided as much because the business environment is favourable, as it is because the government has adopted a policy for co-location. The private clinics will need the lifeline of increased referrals from the public sector to take up the slack.
It would be important to have appropriate ‘public interest’ clauses in the contracts which ensure, for example, that public hospitals are not obliged to refer patients to the private clinics in the event that the care the patient needs (and is happy to receive) is already accessible in the public setting, simply because the private clinic is running at less than full tilt.

Cherry picking

The fear of cherry picking is real though perhaps overstated, assuming the case-mix has safeguards. If it means that elective work can be protected by being pushed out to the private hospitals, that choice should be made.

The State is set to get a €3 billion windfall from co-location. It has an opportunity to reinvest these funds in strengthening the public hospital service, and in developing the primary and community health services that will be needed regardless of whether we have co-located hospitals or not.