The Labour Party has said internal Department of Health documents show the exchequer would lose €145 million annually from health insurance companies under Government plans to develop co-located private hospitals on State lands.
It also said an internal Department of Finance paper maintained the plan to transfer 1,000 beds for fee-paying patients from public to private hospitals would "impact on private health insurance costs".
This document stated the private hospitals concerned would have to charge the full economic rate "including the need for a return on capital investment", it was claimed at a press conference yesterday.
The Labour Party said the Department of Finance was also concerned that the development of co-located facilities could lead to public hospitals losing experienced doctors, nurses and other staff to the new centres "where working conditions and remuneration may be more favourable".
The Progressive Democrats last night said that all these issues had been identified and addressed in the planning for the co-location project. Minister for Health Mary Harney said no other project would deliver as many beds for public patients as quickly. She accused Labour of once again allowing "their ideology get in the way of practical results for patients".
Under the Government's plans 1,000 beds in public hospitals, currently designated for private patients, would be transferred to the co-located centres, freeing up the existing facilities for public patients.
It is envisaged that, initially, co-located private hospitals would be developed at St James's Hospital, Beaumont Hospital, Limerick regional, Cork University Hospital, Waterford regional and Sligo general.
Labour Party spokeswoman on health Liz McManus said the co-located hospital plan, financed by tax breaks, was a serious policy error.
"It is expensive, it is bad for patients and it is wrong. It is a backdoor route to a for-profit system for which the Government has no mandate," she said.
The co-location plan was driven by the ideology of the Progressive Democrats, she added.
"No proper estimates are available as to the potential cost and no assessment has been done of the impact on public hospitals or our existing private health insurance system," she added.
Labour has said that if in government it would scrap the plan and instead provide an additional 2,300 public hospital beds.
A spokesman for the Progressive Democrats said the €145 million figure for the cost of "lost" insurance income was out-dated and that the current estimate was less than €100 million.
The party said that this would be offset by lease income from the land, profit share from the operator of the new facilities and the share of refinancing gains over the lifetime of the project.
The spokesman said health insurance costs would rise anyway given the Government decision to move towards charging the full economic cost for private facilities in public hospitals.
He added that the co-located hospitals would not come on stream until 2011 in any event.
On the potential staff drain, the spokesman said that nursing salaries in the private sector followed those in public system.
Ms Harney said all policy aspects of the co-location plan had been tested and evaluated.
"It is our policy to require that each of these projects will have to demonstrate a net benefit to the public interest. A public sector benchmark has been calculated for the cost of achieving the same public benefits by traditional public procurement. In each case, this benchmark will have to be bettered by the co-location project," she said.
