Department of Health fears buying Mount Carmel as going concern

The Department of Health said that buying the former Mount Carmel hospital would unnecessarily expose the HSE and the State to very obvious and significant financial risks.

Newly released official correspondence suggests that among the concerns was the cost of taking on the staff in the hospital.

The correspondence shows that the Department of Public Expenditure and Reform asked the Department of Health in January to set out reasons as to why it would not acquire the former Mount Carmel Hospital as a going concern.

However, the secretary general of the Department of Health, Ambrose McLoughlin, told his counterpart Robert Watt in the Department of Public Expenditure and Reform that purchasing the hospital as a going concern "would not be in the best interest of the health service or the State".

He said that while Mount Carmel may have been on offer to the State “at a much reduced premium”, questions had to be asked in relation to contingent liabilities and the financial capacity of the HSE to turn the hospital around.

Drain on resources
The Department of Health suggested that taking on Mount Carmel could not be allowed to become a drain on "already limited resources".

Dr McLoughlin also said the Department of Health had concerns, given transfer of undertakings regulations, about “the impact of subsuming a large cohort of staff into the public service, their designation as public servants, possible access to the HSE superannuation scheme and the exposure of the HSE to liability for any undischarged obligations that might have accrued to employees”.

“There may, however, be other potential uses for the hospital, eg as a step-down facility or as a short-term transitional facility for older persons and these options might be worth exploring.

“However, the current staff mix at the hospital would not be suitable for a nursing home type facility, and in those circumstances, buying the hospital as a going concern would face us with the logistics of a significant re-deployment exercise or else the costs of a targeted redundancy initiative.”

Change of use
Dr McLoughlin said if the Department of Health wanted to change the use of Mount Carmel, "it would be preferable to buy the buildings, subject of course to a structural assessment, rather than acquire the hospital as a going concern".

The Department of Health told the Department of Public Expenditure and Reform that the purchase of Mount Carmel as a standalone maternity hospital or as a maternity unit in a non-acute setting would not be in line with current Government policy which urged that maternity services be co-located with adult facilities.

Dr McLoughlin said that in view of the falling birth rate in the country and consequently a reduced demand for maternity services, “it is our view that we cannot justify purchasing Mount Carmel as a going concern”.