Covid-19: Public takeover of private hospitals upends insurance sector and medical specialists

The Government deal to take over 19 private hospitals during the current Covid-19 crisis has upended both the health insurance sector and the working arrangements of hundreds of doctors who see only fee-paying patients.

The hospitals are the backbone of the private healthcare system in Ireland, employing thousands of staff and providing care for many of the 2.2 million people with health insurance cover.

For the next three months, and perhaps longer, the hospitals’ facilities and equipment will be for the exclusive use of public patients.

The agreement with the private hospitals was broadly welcomed when announced earlier this month as a necessary move to provide additional capacity, an estimated 2,000 beds, at a time when the public system was facing a potential major surge of Covid-19 patients. Some argued it could represent a step towards a single-tier health system.

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However in recent days the Government has come under pressure, particularly from Labour Party leader Alan Kelly, to publish the terms of the deal.

Taoiseach Leo Varadkar said on Thursday that €115 million a month was an "accurate estimate" of the cost of the deal to the State but the actual amounts will not be known until the end of the contract.

Medical specialists

While the agreement requires the hospitals to use their resources, including staff and management, to support the public system, this does not include 600 fully-private medical specialists. These consultants practise in the hospitals’ facilities and many have bought or leased expensive rooms.

As part of the deal, private hospitals must try to ensure that self-employed medical consultants using their facilities sign up to a proposed State contract – with salaries ranging from €141,000 to €195,000 – which would see them treat only public patients.

However consultants became concerned about what would happen to thousands of private patients already on their books .The Government then suggested the doctors could treat their existing fee-paying patients in the public system on condition they did not charge them.

The consultants are also worried that they will be left paying for costs for private facilities without any private income – an impasse has ensued.

A number of doctors also point out that consultants in public hospitals with specific contractual rights can, in theory at least, continue to bill fee-paying patients – as can the public hospitals .

On Wednesday night further HSE proposals were tabled, including on overtime, but it appears that few private consultants have signed up.

Within the medical community there have been rumblings of potential legal action about the impact on practices when the current crisis is over.

Salaries

Under the deal with the private hospitals the HSE has agreed to reimburse the cost of existing staff salaries, including senior management. It will not pay any more than the equivalent of €200,000 per year. While details of the pay of public health staff is published, remuneration for those in the private sector is not as readily accessible. If the HSE is to pay some senior figures in the traditional private hospitals a salary of €200,000, it would be considerably more than many what senior public health personnel are earning.

Undoubtedly when the Covid-19 crisis is over, there will be a review of the private hospital agreement. Given the number of different contracts, the various commercial arrangements in place between doctors and hospitals, the differing indemnity regimes and the scale of the health insurance industry sector, it seems clear at this stage that using this deal as a stepping stone to a single-tier hospital system will not be easy and will not be cheap.