Committee on the Future of Healthcare debate -
Wednesday, 18 Jan 2017

Health Service Reform: Private Hospitals Association

Chairman

I remind everybody in the room to ensure that their mobile phones are either turned off or on airplane mode as they interfere with the recording system. I welcome everyone watching these proceedings that are being relayed live and I welcome the people who are seated in the public Gallery.

I welcome the representatives of the Private Hospitals Association to the meeting. The association represents 19 private hospitals that provide acute and mental health care services. I welcome Mr. Simon Nugent, CEO, Private Hospitals Association, and Mr. Brian Fitzgerald, Deputy CEO of the Beacon Hospital. I thank both of them for attending this morning. We look forward to hearing the presentation. I invite Mr. Nugent to make his opening statement.

Mr. Simon Nugent

As has been said, I am the chief executive of the Private Hospitals Association that represents 19 private hospitals located in ten counties located across Ireland. I am joined by my colleague, Mr. Fitzgerald, who is deputy chief executive of one of the association's members, the Beacon Hospital. He has extensive experience in hospital management in both public and private sectors. He will offer his insight into the potential for the future of health care.

Members will have received the association's submission last August. It sets out the extent of acute medical and mental health care provided in private hospitals in Ireland. We employ over 8,000 staff and provide 2,500 beds for patients on an ongoing basis. This enables us to provide, among other things, 250,000 inpatient procedures, 3 million diagnostic tests, over 1 million bed nights to patients and 10% of Ireland's inpatient mental health care annually.

We estimate that 50% of all elective procedures in Ireland last year were performed in our members' hospitals. In addition, half of our hospitals operate either emergency departments or medical assessment units, which in total see more than 1,000 patients each week, admitting at least 250 of them thus providing an estimated 100,000 bed nights of medical care to patients admitted on an emergency basis each year. I have highlighted these numbers to the committee because they illustrate the scale of care provided by private hospitals. Such care, in our absence, would fall upon the State and the public system as an additional burden.

Earlier in 2016, the association made proposals to the Department of Health with the aim of fostering closer partnership between the public and private systems in the coming years. We believe there is scope for closer collaboration on several fronts, including reducing waiting lists, tackling overcrowding in emergency departments, recruiting health care professionals and adopting a strategic approach to capital planning. We are working through several of these ideas with the Department of Health.

One welcome innovation has been the reintroduction of the National Treatment Purchase Fund. While the resources available to be spent in 2017 are relatively modest, PHA members will be able to respond and provide treatment to some of the longest waiting patients on public lists over the coming months. Earlier treatment of those on waiting lists is important for patients but it also brings significant savings to the Exchequer as an increasing complexity of conditions, as they develop, is avoided.

Looking forward, the PHA would encourage the committee to take a whole-of-system approach to planning the future of health care. It should acknowledge the scope for partnership in delivery between public and private systems and take the following into account: the contribution that private hospitals already make; the modern infrastructure in which we have invested and continue to invest; the highly skilled personnel working in our hospitals; and the capacity we have to work with the public system with hospital groups, community health organisations, etc.

In conclusion, as set out in more detail in our submission, the association recommends that the committee does the following four things. We would like it to acknowledge the mixed nature of health care provision in Ireland and the significant proportion of care delivered by private hospitals. We hope that the committee will offer a strategic vision of health care in Ireland in ten years' time that recognises the benefits of the mixed delivery system and provides a stable environment for investment in the sector. We would encourage the committee to focus on the primary care services, which is something that all of the delegations that have met the committee have emphasised. We want the primary care services, as they develop, to integrate successfully with all of the providers of hospital care. Therefore, there must be a joined-up arrangement between primary and continuing care. The association also wants the committee to place an emphasis on health sector recruitment and the need for a sustained focus on attracting nurses, doctors and other clinical specialists to work in Ireland.

We recommend the establishment of an expert skills group on the medical professions which tackles all of this in a holistic way. I know the committee has spoken on several occasions about the importance of e-health and we would like to underline what we see as the importance of investment in e-health as an enabler of truly joined-up health care, facilitating best crossover between different health care providers. Finally, we urge the committee to support closer co-operation on patient care between public and private systems during the transition between now and 2026.

I will hand over to Mr. Fitzgerald.

Mr. Brian Fitzgerald

I thank the Chairman and the committee for their invitation. I have worked for over 25 years in management in the Irish health care system in the public and private settings. This committee should give serious consideration to planning a health care system based on all capacity available in public and private settings. I am not referring only to private hospitals but to all infrastructure. For example, on any main street in the country one will find private sector operators such as general practitioners, pharmacists, dentists, ophthalmologists, wellness providers and many other health care businesses, nursing homes, etc. Too often there is an ideological debate regarding the existence of private health care which is narrowly focused on private hospitals. Health care in Ireland is an ecosystem with many intertwined operators.

My organisation, Beacon Hospital, employs just under 1,000 staff and contributes significantly to the economy, for example, we pay approximately €25 million a year in income tax. Over 90% of staff working in private hospitals were trained in the public system and a fair proportion work in both systems. Front-line staff should be commended on their work in both systems and many deliberately choose a career of diversity. They are agnostic on whether they work in the public or private system because their main work ethic is focused on providing safe, effective care to their patients in contemporary facilities. Without the option of working in the private system I suspect many front-line staff would leave for new shores. I am satisfied that the medical care provided to patients in the private system is of equal clinical efficacy to that in the public system. The committee may know that private hospitals are subject to external accreditation. Private hospitals must hold a valid accreditation certificate to receive funding from health insurers and to be a member of the association. This is not the case for public hospitals. For example, recently Beacon Hospital successfully completed its fourth triannual cycle of external accreditation audit and was awarded a performance score of 99.4% across 1,200 measurable elements, which I understand is one of the highest scores ever.

In recent weeks we have read about, and are acutely aware of, the capacity challenges being faced daily in the public health care sector. The private system has capacity and is part of the solution to these constraints. In my previous role I frequently availed of services provided by the private system to solve capacity constraints. In future there is ample opportunity for the public and private systems to collaborate and provide innovative cost-effective solutions for the provision of health care to all citizens.

In conclusion, I recommend that the committee consider establishing a task force to explore innovative, cost-effective private sector capacity utilisation and absorb the fact that Ireland is an ecosystem of public and private providers. A private health care system is a significant contributor to the economy. In my experience, front-line staff trained in the public system seek diversity of employment and the private system provides a solution to the problem of staff retention. The private system is and should be accredited. That is a standard we have to meet.

Chairman

I thank the witnesses for those submissions.

I advise the witnesses that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.

Members are reminded of the long-standing ruling of the Chair to the effect that they should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable.

I will open up the discussion to members, starting with Deputy Naughton.

Deputy Hildegarde Naughton

I thank the witnesses for their presentations this morning. The information to hand suggests that most procedures that take place in private hospitals are elective, non-emergency procedures. There are very few accident and emergency departments in private hospitals and of those many are not open 24-7. What are the most common procedures in the witnesses' hospitals? Are they hip and knee replacements? How many inpatients do they treat annually? What is the average length of stay? I would be interested in their comments on the complex cases being dealt with and the burden of complex cases on the public hospitals, for example, some people may go into a private hospital but because of the complexity of their cases they are often transported in an ambulance to a public hospital which adds pressure to the public system. I would be very interested in hearing the witnesses' views on that and how this committee can work to resolve that problem. How many referrals do they get from the public system and what is the cumulative cost of that? Could the witnesses mention the complexity of those cases that are referred to the private hospitals?

Deputy Kate O'Connell

I thank the witnesses for coming before the committee. They referred to 3 million diagnostic tests. While I am aware of commercial sensitivities could they elaborate on the proportion of diagnostic tests per patient in the private sector? Is more testing done on private patients than on public patients? Have they any figures on the pure cost of a test, for example, such as an MRI in the Beacon versus the public cost? I am not talking only about the price of doing it but about associated staffing costs etc. such as rent of the building, whatever it involves. Have they any comparative data on the public sector?

An issue that comes up repeatedly here is the challenge of recruitment and retention of staff who are trained in Ireland but leave the country. Is that the witnesses' experience too? If so, what have they done to address that challenge? Do they have any figures on the ratio of management to clinical staff and patients? I am trying to get at the management set-up in the public hospital. Can they say, for example, that for every five patients there are two nurses, one doctor and three managers? In their management structures are people managers or clinicians? Have they gone down the route of having more clinical input into management? Have they any information on staff absenteeism rates within the private hospitals versus the public hospitals? For one night's overstay treatment, with no diagnostics or operation do they have a comparative figure for the cost of keeping a person in the Beacon or in St. James' Hospital?

Deputy Louise O'Reilly

I thank the witnesses for their presentation. Mr. Fitzgerald said that too often there is an ideological debate about private health care. I would say that too often there is not.

As I understand it, there is no crisis in respect of recruitment and retention in the private sector. That exists in the public sector. How do rates of pay for the staff in the private sector compare with those in the public sector? We can exclude nurses because there is a direct comparison. I refer specifically to support staff, canteen staff, theatre porters and people like them. Are they directly employed or are they agency staff?

What functions are outsourced within the private sector? I am also interested to know how many of the people the association represents have collective agreements with recognised trade unions. When we talk about the beds, one cannot compare like for like. Obviously, an ICU bed is not the same as a bed for somebody who is recovering from an operation overnight and who will go home the next morning. With regard to the numbers of high-dependency beds and ICU beds, how would the private beds compare with the public system in the number of beds that would be reserved for high-dependency activity?

To pick up on Deputy Naughton's point, does the Private Hospitals Association have any figures on patient transfers? I am open to correction if I am wrong but my impression is that many people are transferred from the private sector to the public sector when their care needs become more acute, or we could say more expensive. Patients are transferred by ambulance, using probably a public ambulance or certainly an ambulance paid for by the public purse, into the public system from the private system. I note that two hospitals participated in HIPE, the hospital in-patient enquiry scheme, but they do not do so now. It is very difficult for public representatives when we do not have these figures. Perhaps Mr. Nugent could comment on that issue. I may be looking in the wrong place and I am open to correction in that regard. There is, however, an impression that we do not have much information about the private health system. As I said, two hospitals participated in HIPE and now they do not. Will the witnesses comment on that and on the availability of information?

Chairman

There is a wide range of questions there for the witnesses to address.

Mr. Simon Nugent

I agree with the Chairman that it is indeed a wide range of questions with a lot of data-specific questions. The association does not collect detailed data on many of the areas the Deputies have mentioned. I can take some of the questions away and endeavour to respond afterwards with information where we have it, but it is not the habit or work of the association to collect this sort of data, particularly the comparative data. I understand why the committee is seeking it but we do not collect comparative data between what happens in our system and what happens in the public system. Mr. Fitzgerald might be able to give some anecdotal information that would help on some of the Deputies' questions but we are not going to be able to give a complete answer on them for reasons I hope the committee will understand.

Chairman

I want to clarify the role of the association. Is Mr. Nugent saying the data does not exist or has not been collected, or is he saying that he does not have access to it this morning?

Mr. Simon Nugent

We do not collect it. I can endeavour to collect some of the data if it is of use to the committee but we would not collect it on an ongoing basis.

Chairman

Will Mr. Nugent explain the role of the association for clarification? Is it just an umbrella group or lobby group?

Mr. Simon Nugent

The role of the association is to be a representative organisation for the sector. We represent the private hospitals to the Department of Health, regulators and bodies in the insurance sector and so on. We have not, however, had calls to collect this specific data on a systematic basis, or much of the data the committee is asking about. The need just does not arise.

Deputy Louise O'Reilly

I have a brief supplementary question. The witness said the association has not had cause to collect the information but we are talking about issues around value for money and comparison, the cost of overnight stays and the cost of care. That information has not been provided to the HSE so it would not form part of any service-level agreement or anything like that with the HSE. That is no reflection on the association because clearly if the HSE is not asking for the information, it is a reflection on the HSE.

Mr. Simon Nugent

In the event that we provide services for the public system, obviously those services are costed and priced very carefully and rationally. They would be closely examined, for example, by a body such as the National Treatment Purchase Fund if it is commissioning care. On a case-by-case basis, the procurer will collect the information it needs but that is different from the association gathering data.

Chairman

Is that on a hospital basis-----

Deputy Louise O'Reilly

The procurer could not collect-----

Chairman

-----or across the sector? Is that what the witness is saying? Is it a case that when agreements are reached on procuring a certain level of service, the negotiation takes place with the HSE on an individual hospital basis rather than the group or the sector?

Mr. Simon Nugent

That is correct. We do not negotiate collectively on prices.

Chairman

Does Deputy Brassil want to come in on this specific point?

Deputy John Brassil

No, I just want the Chairman to-----

Chairman

Yes, I have the Deputy here.

Mr. Brian Fitzgerald

I am happy to give some examples if I may. Reference was made to the number of inpatients, which I believe is in the region of 250,000. There were specific comments about the emergency departments, procedures, hip operations, average length of stay and the National Treatment Purchase Fund.

On the issue of emergency departments and patients being transferred from a private to a public hospital, it was reflected in commentary from all the Deputies that perhaps this was in the context of perverse incentives. I can use examples in both systems because I have worked in both. There are basically four types of patients who are transferred. First, there are patients who go by ambulance. Clearly, private hospitals are not funded to take ambulance transfers, which is a choice. If the Government wishes to fund private hospitals so they are open 24-7 and can take ambulance transfers, we would certainly look at it. Second, there are patients who require significant intervention, for example, a patient with a brain tumour. These are small volume numbers of patients. It is not in the interests of the State to have lots of providers treating small numbers of patients, and in fact there would not be the specialists to do it. The private system will not do that because it is not funded to do it and it would not make the best use of resources as one would not find the surgeons.

Third, on occasion a patient might arrive at our emergency departments who might need, for example, an ear nose and throat, ENT, consultant and at that moment, although we have ENT consultants, we would not have one available. This happens all the time in the public system also. In that context we encourage the patient to go where he or she can, if we deem it to be urgent, whether that is to a public emergency department or one of our sister private hospitals. The fourth type of transfer is probably the one that comes up a lot. It is when patients come to the emergency department of a private hospital and there are no beds. This is not dissimilar to a public hospital. In that case, we offer the opportunity to the patients to remain in the hospital under medical supervision, we probably give them a light lunch if they can have food, we will try to admit them later in the day or if they are well enough, they can go home and come back the next day. The bottom line is that we are genuinely only interested in looking after the patient. We want to make sure patients get the best treatment they need and if they are really sick they are treated quickly. If they are really sick, they may choose to go to a public emergency department because they feel they will get the care they need in that setting. That was reflective of a number of queries.

I will now turn to some of the specifics on procedures. Some 40% of patients typically in private hospitals are classed as medical patients with respiratory or gastroenterology problems and about 60% are elective patients for general surgery. We are seeing a huge demand, particularly through our emergency departments, from more medical patients. Last week, we had over 60 medical patients out of, I believe, 143 patients on one day. That is a significant number for us. The elective patients cover areas such as orthopaedics, cardiology, which are the bigger of the general surgery types, vascular surgery and cancer. They are the big elective areas one will find in the private system.

The average length of stay for a medical patient is typically about four days. My comparison with that, and we watch this every month with our board, is the published public figure of seven days, but in my experience in my previous career I have seen stays of over ten days. Reference was made to the NTPF and volumes, which are actually quite low. Last year, it would have been in the order of perhaps 2.5% to 3% of our overall revenue. Just over 90% of our revenue comes from insurance companies and the rest comes from self-pay, the NTPF or patients who come from abroad seeking treatment in the State.

There is a full range of diagnostic tests. In all the private hospitals, there are full laboratory capability, full radiology capability and full endoscopy capability, which is the main diagnostic test that patients seek.

In fact, there are specialist areas in our hospital that are not provided in the public system for which public patients come in by way of service-level agreements with the HSE.

MRI costs is an interesting area. MRI is the only area, under legislation, in the public system for which the public system can charge. For all the diagnostic tests that private patients receive in the public system, MRI is the only one for which there can be a charge.

Cost was referred to but I refer to price in my current life because I have to negotiate price with our funders. We have different prices with different funders, and that is a commercial discussion. We have different prices for self-pay patients. Our patients pay less for self-pay MRI and other diagnostics than we would receive from the insurers. That is a commercial conversation.

We have faced the same recruitment challenges the public system faced. We have just over 300 nurses but when I joined my current employer we had more than 30 vacancies, which is 10% of our nurses. We went abroad to the Middle East and anywhere we could and we practically filled all those vacancies in the last 12 months. The last time I looked we had five vacancies. Interestingly, I have noticed a trend in the last few months of a lot more CVs coming in from nurses who want to take up roles in the private system.

I need to mention doctors. I know there is a view about salaries, history and contracts. I talk to young surgeons in Australia, North America and the UK predominantly who want to come back. In fact, I lecture in Trinity College and UCD on health care management, and I lecture doctors who want to look at a career. Doctors want to come back, but it is not just about the salary. There is a mixture of issues, such as training and career advancement. Having said that, I have noticed in the last six months that we are having some success. There are more doctors coming to us now who want a salary in the private system, and will offer their services to the public system. I am seeing that trend. It is starting to happen.

Chairman

Just to clarify that last point, Mr. Fitzgerald, you said you have noticed more doctors?

Mr. Brian Fitzgerald

I have noticed a trend. It is probably a pent-up issue. Historically, consultants would do their fellowship in North America, typically. They would complete their fellowship within two years and then would plan to take a public post. They stayed longer abroad, maybe two more years. They might be away for four years. They get married, are raising a young family and want to come back. They are taking salaried positions in the private system. They are not seeking a public job at all.

Chairman

Okay.

Mr. Brian Fitzgerald

On the management versus clinical, aside from administrative staff our management team is currently seven in number, and we employ just under 1,000 staff. When I was in St. James's Hospital as CEO, we had 4,500 staff and we had a key management team of around ten, but we had clinical directorate structures below that which had their own management teams as well. I would not have that in my current hospital. However, we have two clinical directors, one for medicine and one for surgery, and we have a chief of staff, so the clinicians are very much involved in the management of the hospital and sit at board level as well.

On staff absenteeism rates, last time I looked we were at 2%. We benchmark against the HSE when it publishes its rates. I think overall it was about 4% the last time I looked.

The cost per night is interesting. I say this because when I was in the public system I was very much a person who encouraged the costing of services. That goes back to the early 2000s. I call it price, some people call it cost, as I said earlier. The Government has legislation in place currently for tier-one hospitals in the public system to charge €1,000 per night for a private patient in the public system. I am sure the committee has heard that before. Forgive me, there are commercial sensitivities because we have different prices with different insurers, but I can assure the committee our price is nowhere near that.

Chairman

Can you give us a range?

Mr. Brian Fitzgerald

Without being precise, the maximum we would get would not be any more than €900, and we have a minimum of around €750.

Chairman

Okay.

Mr. Brian Fitzgerald

On support staff, we do not have unions, but we do not outsource.

Deputy Louise O'Reilly

That only applies to your own hospital.

Mr. Brian Fitzgerald

Yes. I did say I would speak from my experience.

Deputy Louise O'Reilly

That is fine.

Mr. Brian Fitzgerald

On the rates we pay, I am told by the managers in catering and cleaning that we pay competitive rates. At the moment I do not know of a demand for us to be out recruiting. We seem to have full staff in those areas, and we do not outsource.

Deputy Louise O'Reilly

They are all directly employed in the Beacon.

Mr. Brian Fitzgerald

Yes.

Deputy Louise O'Reilly

Perhaps Mr. Nugent could enlighten us as to the number of directly employed staff.

Mr. Simon Nugent

My understanding is that similar arrangements apply in most of our hospitals, but I do not have data on that.

Deputy Alan Kelly

Perhaps Mr. Nugent could consult with all his hospitals and ask for that information and supply it to the committee.

Mr. Simon Nugent

I would be happy to do that.

Chairman

Yes, good idea.

Mr. Brian Fitzgerald

I will finish on the last couple of areas. There was a question about intensive care, and it is an interesting area. There is lots of capacity in intensive care in the private system, particularly in Dublin, and there are cases today of patients being transferred to Belfast from public hospitals. In fact, there are patients I am aware of in public hospitals in medical beds that should be in intensive care for the proper treatment. Some of these patients have health insurance, but their health insurance does not pay the full cost of ICU, so there is a supplement required. The families, I am sure, cannot pay the supplements. It is an interesting topic. In my previous role I transferred patients to intensive care in private hospitals. If the committee is really interested in that area, I would suggest it talks to Dr. Stephen Frohlich, who is an intensivist in Blackrock Clinic. He is well regarded, and he has written extensively on ICU in Ireland.

The last issue is hospital in-patient enquiry, HIPE. We are not required to be a part of HIPE. We did endeavour in our hospital to practise HIPE, and I know other colleagues did as well. The problem is that there is a lot of overheads associated with employing coders, and we are not funded for that. I think it will come in time for the whole system, but it is an administrative cost which is overburdening, to be honest.

Chairman

Is it on diagnostic testing?

Deputy Kate O'Connell

No. It is on the management structures. Mr. Fitzgerald said the Beacon had 1,000 staff and seven managers. Does he have any idea about how many administrative staff there are? Would it be true to say that there is a leaner management structure in the Beacon, which is in the private sector, than there is in the public sector? Would it be fair to say that?

Mr. Brian Fitzgerald

To be honest, I could not say. To be fair to my colleagues in the public system, and many of them do a fantastic job, there are so many different, diverse issues. I have found, coming to the private system, that we get on, it is efficient, we make decisions and we move on. To give the Deputy a percentage breakdown, 60% of what I do today is similar, publically and privately, in terms of managing a hospital, including dealing with staff, retention and recruitment, and operational issues that arise in all settings. Some 20% is different because of our governance structure. I call it precision governance. We have a small board which is made up of commercial and clinical experts, and they hold us to a level of accountability I had not experienced before. Some 20% is down to the commercial realities. We have to make a profit to pay salaries and to invest in our infrastructure. Just to benchmark, we must make at least 5% profit to reinvest in assets and to replace equipment. We have to do that. On the public side, there is a lot more complexity and a greater diversity of issues.

Chairman

Deputy Kate O'Connell also asked about diagnostics, and if there is wider use of diagnostics in the private sector. Do you have a comment on that?

Mr. Brian Fitzgerald

I will speak from my experience. We have the full range of diagnostics so, for example, in radiology, we have lots of capacity, including in MRI, CT, ultrasound and head CT. That is what one is referring to. In the area of endoscopy we are already providing a fairly significant volume of services to the public system at the moment.

Deputy Kate O'Connell

I am trying to find out if more tests are run on private patients in private hospitals than there are on public patients. That is what I am trying to get at.

Mr. Brian Fitzgerald

The Deputy is getting into the area of a fee-for-service model versus a capitation model. In Ireland, the public health system is pretty much still under the capitation model and if one looks at fee for service, one goes to North America. There are many examples there of what I believe the Deputy is referring to, which is overtesting. We cannot overtest for the simple reason that our main revenue comes from insurers in two streams. One is a fixed-price procedure, so if we do a hip replacement, for example, we get one price, regardless of the length of stay of the patient or how many tests are done. The second area in which we get paid is per diem per night, similar to the public system, and again we do not get any extra revenue for the number of tests we perform.

Chairman

I presume it could occur on an outpatient basis.

Mr. Brian Fitzgerald

On an outpatient basis the procedures are predominantly self-paid. A patient pays for one MRI scan, for example, or a CT scan. They would be referred by a GP or consultant for that.

Chairman

Overtesting may well be an issue.

Mr. Brian Fitzgerald

No.

Chairman

We do not know, do we?

Mr. Brian Fitzgerald

I was invited to speak of my experience and I can absolutely tell the committee that we do not overtest. I do not see it.

Chairman

Okay. There are no data on that, public or private. Will the witnesses clarify two points that arose in the context of those questions? It was indicated that the private sector does not do more complex work such as brain surgery as it is not funded. This means the insurance companies do not cover that more complex work.

Mr. Brian Fitzgerald

They do in the case of neurosurgery. I am not aware that they fund very complex surgery in the case of transplantation. There are three points. This affects a small number of patients and it is not a good clinical service to offer it. I will give an example from Europe. I went to the Karolinska institute in Sweden, which is a fantastic hospital and institution, and it needs at least 250 pancreatic transplants per year to justify research-----

Chairman

We take that point. I just want to clarify if there is a schedule of work that the insurance companies do not fund, meaning the service must be done in the public sector.

Mr. Brian Fitzgerald

The obvious one is transplantation.

Chairman

Will the witness provide us with a schedule of other areas it does not fund?

Mr. Simon Nugent

That could be referred to the insurers.

Mr. Brian Fitzgerald

Yes, that is really a question for insurers.

Chairman

The witnesses know what those areas are.

Mr. Brian Fitzgerald

We are not funded for transplantation and that is about the only one. When I speak of transplantation I refer to heart, lung, kidneys, pancreas and liver.

Chairman

What was the comment on brain issues and surgery? The witness said it was not funded.

Mr. Brian Fitzgerald

I referred to the past. Some private hospitals provide neurosurgery but the volumes are low as well.

Chairman

Okay, I thought the issue was it was not funded. The witness mentioned salaried doctors, saying there is evidence that many Irish-trained doctors want to come home but are not interested in the contracts on offer, whatever that might be. They are opting for salaried positions within the private sector.

Mr. Brian Fitzgerald

There is a mixture of issues, including career progression, medical indemnity and the contract. It is not just one issue.

Chairman

What percentage of the private hospital doctors would be salaried as opposed to having contracts?

Mr. Brian Fitzgerald

There are just over ten at the moment and we have 200 practising consultants. The point is we have hired three in the past six months.

Chairman

Okay.

Deputy Billy Kelleher

I welcome the witnesses. Some of the detail has already been raised but the witnesses spoke about closer integration between the systems, including the primary care system, the public health system in an acute hospital setting and private hospitals. Reference has been made to an ideological debate and we had such a debate some years ago in the context of co-location. That was quite divisive. When the witness speaks about closer integration and co-operation with the public system, what does he imagine or propose? Would it be in the context of service-level agreements or is there more intertwining in the view of the witness?

The complexity issue is often raised and there is always the suspicion that there is cherry-picking of patients, with those cases that are more complex and potentially more costly being referred to the public hospital system. I assume the public hospital system would still be paid by the insurer when there is a referral from a private hospital. Will the witness provide some clarity on the issue? Mr. Fitzgerald has indicated he has no evidence of overtesting. In speaking to insurers, they might say the opposite is the case and there is a need to be very vigilant about the number of diagnoses a person is put through to ascertain health status. It has been raised with me by insurers. There are other views on the matter so I would like more clarity on it.

I presume the accident and emergency departments mentioned by the witnesses are primarily urgent care centres in a real context. To be honest, they are not places one would go with heavy trauma. What complexity of case could be dealt with when a patient comes through the door of the accident and emergency department? Are they the type of Swiftcare operations with which most people would be familiar?

The association cannot speak for each individual hospital. There is much highly specialised diagnostic equipment in private hospitals and it is probably much better than what we see in many of our public hospitals. What sort of process is used to procure that type of equipment? Is it done through lend-lease management systems, full capital buy-out or is there a myriad of contracts? Who maintains and services the equipment? Are there purchase or maintenance service-level agreements in place? It seems that in the public system everything is purchased upfront and maintained through either the hospital's maintenance systems or some form of lower-level maintenance contracts. Will the witness provide some clarity on what happens in the private sector?

I do not want to repeat the issue but there is a shortage of consultants in the country and the public health system has a very difficult task in trying to recruit or even maintain staff. A large number of consultants are completing fellowships abroad, as the witnesses have indicated, and attracting them home is proving very difficult. I understand the commercial confidentiality aspect but when the witness said hospitals are recruiting consultants who would traditionally have gone to the public sector, what types of remuneration packages over and above the public health contracts are being offered? I am not referring to a specific context but the loose talk around the private health providers.

Deputy Michael Harty

I thank the witnesses for coming before the committee. Mr. Fitzgerald stated that he worked both in the public and private system but what are the different types of management that exist in the public and private systems? He referred to precision governance in the private system and accountability but will he expand on the issues? With regard to recruitment, he said he has little problem in completing the cohort of nurses and doctors. Will Mr. Fitzgerald explain how there is such a difference between the private and public when it comes to recruiting doctors and nurses? Will the witness speak about information technology within the private system, specifically how it works to increase efficiency? Many of our hospitals have theatres lying idle because of staff shortages and one consultant has said he can do four times as many procedures in a public hospital as he can in a private hospital. Will the witness explore why that might be the case?

Deputy Bernard J. Durkan

How do the witnesses address the suggestion the private system is benefitting disproportionately through the various health insurers on two grounds, first, on the basis of cherry picking and, second, in terms of cost comparisons in that it is regularly alleged that services are more cost-effective in the private sector? Does that entail the comparison of like with like or is it, as is suggested, that less complicated cases are very often referred to the private sector? Is that a basis for a cost comparison that may be misleading?

The witnesses gave considerable information about the recruitment of doctors but what about the recruitment of consultants? We know of the difficulties in recruiting doctors and consultants in the public sector. How do the private hospitals recruit? Do the witnesses have an opinion on the issues that affect consultants who apply to take up positions? To what extent were consultants in private hospitals previously employed in the public sector or overseas?

Mr. Simon Nugent

To address Deputy Kelleher's question on collaboration, there is a range of ways whereby private and public hospitals can work more closely together. The National Treatment Purchase Fund is a good example. Where there is excess demand in the public system for elective procedures, the NTPF works increasingly well in that patients are transferred to private hospitals to be treated there. In a range of other areas, if we join the systems up more closely, we can loosen up all of the resources that are available across the health system and make them work effectively together. For example, private hospitals from time to time also have issues of delayed discharge of patients who are not able to leave and free up the beds, just as in public hospitals. It would be advantageous if we could have a better arrangement with community health organisations in order to arrange the discharge of those patients so they could avail of services in the community. That is just one example.

Much of this boils down to arrangements at local level. The challenges facing hospitals in the public system vary from geography to geography, and the availability of private hospitals to respond varies from geography to geography also. To take places like Cork or Galway, a lot could be achieved if there was a policy of encouraging the private hospitals and the hospital groups to sit down and work out what they might effectively do together. There are quite a few things that could be done in that area. As I said, we have set up a working party with the Department of Health to work through some of these issues. It met in December and is due to meet again at the end of the month.

Deputy Billy Kelleher

Is this working party comprised of officials from the Department of Health and the Private Hospitals Association?

Mr. Simon Nugent

Yes.

Deputy Billy Kelleher

Will there be a report or is it just-----

Mr. Simon Nugent

Hopefully, there will be practical outcomes. We have not talked about creating a report. It is to see what practical things we can work through together and encourage. Mr. Fitzgerald may want to come in at this stage.

Mr. Brian Fitzgerald

A question came up about the term "cherry picking". I have explained about some of the cohorts of patients, so I do not want to go over that ground. We take patients with strokes and patients who are having cardiac events. We have an ICU with 14 beds and eight staff because that is the relevant demand that exists. We have 24-7 anaesthetic cover and medical cover. Therefore, in terms of the experience I have in both settings, it is the same for that cohort of patients, notwithstanding the other patients who are referred elsewhere.

On diagnostics, the point I was making earlier is that we have no incentive to over-test. We do not get paid for each individual test, unlike the fee-for-service approach one would find in North America. We get paid a package price regardless, so if we do ten MRIs, we get the same rate. As happens in the public system also, there is mixture of trained doctors. We have many doctors who have been trained abroad in different systems, for example, in North America or the Middle East. They are trained in different medicine and they tend to test more if they are trained in those systems. That is probably because those systems are incentivised, but that is how they are trained. In Ireland we are not paid for those tests, so there is no incentive.

The point on medical equipment is interesting. We have just gone through an expansion programme, which we funded in three ways. First, if we generate enough funds, we buy the equipment outright because we find that to be the most efficient way of procuring. Second, we have also used bank debt. The third area, which is becoming more prominent, is what are called managed equipment service contracts, where there is a mixture of servicing and capital cost over a prolonged period. The servicing of our equipment is managed by an in-house medical physics team similar to what one would find in the public system. In fact, the team members in the Beacon were trained in the public system and they would collaborate quite a lot with their colleagues in the public system.

The shortage of consultants came up in several questions. Without getting into drop-dead remuneration, the packages that are designed are salaries, and the salary would typically be about 50% more than the starting public salary. The starting salary for a type B consultant is €120,000 and it drops to €106,000 for a type C consultant, so one could add on about 50% to that. In addition, consultants coming back to Ireland are facing extreme medical indemnity costs. A typical surgeon in a very complex specialty is probably paying €70,000 a year in medical indemnity, and I have seen rates of up to €100,000 a year. For consultants coming back to Ireland to set up practice, bearing in mind they are making professional fees, it takes a while to establish a practice, so they need support for the first couple of years.

Chairman

What kind of time commitment would a contract like that involve?

Mr. Brian Fitzgerald

It is a standard 39-hour week.

Chairman

A 39-hour week with inpatient hospital work.

Mr. Brian Fitzgerald

They would have inpatients and outpatients, and they would have clinics. For example, neurologists are not proceduralists, so their work is done pretty much on an ambulatory basis. They are seeing a high volume of patients. An orthopaedic surgeon might have a clinic on a Monday morning and would set up the patients to do surgery later in the week.

Chairman

However, they have a private income from the outpatient appointments.

Mr. Brian Fitzgerald

They will receive private-----

Chairman

What kind of hours, or how much of the week, is covered by the salaries the private hospitals are offering for the inpatient work?

Mr. Brian Fitzgerald

We would expect a 40-hour commitment for that work.

Chairman

A 40-hour commitment for inpatient work.

Mr. Brian Fitzgerald

It is either 39 or 40 hours.

Chairman

Then they do their outpatient clinics on top of that.

Mr. Brian Fitzgerald

No, the neurologist will have all outpatients - it is all ambulatory. We would work out a form of a practice plan for, say, an orthopaedic surgeon. They would have either a dedicated slot in theatre - all day Wednesday, for example - and they might have their outpatient clinic on a Monday. They would be on-call as well, so it is a mixture.

Chairman

However, the €150,000 or €160,000 contract only covers one element of their work. They then have private income from consultations.

Mr. Brian Fitzgerald

Yes, that is no different to any professional-----

Deputy Billy Kelleher

They would expect to have private income outside of that contract.

Mr. Brian Fitzgerald

As an example, if a consultant in the public system does one day a week in the private system, and has the right contract, that consultant will receive professional fees from the insurance companies.

The consultant will also bill patients directly in an outpatient setting. Many consultants will have private outpatient settings within public hospitals. They do not have to come to the Beacon Hospital to do that.

I will try to paint a picture of what I was referring to when I discussed management. The management team produces a management plan for the hospital. We submit it to the board every year. The board scrutinises it and makes amendments as it sees fit. That is the plan and we are held to task for it. We are measured every month under a ream of performance indicators. At an earlier stage in my career I worked with great governance groups but we did not go down to that level of scrutiny. Earlier I referred to accountability. The reality is that if we do not perform, there will be inevitable consequences. In that sense it is no different to any private business.

Recruitment has been mentioned several times. When I referred to doctors I was referring to consultants.

There are two sides to information and communications technology; corporate ICT and clinical ICT. In a previous life, the hospital I worked in was in the public system. It had fantastic clinical ICT and excellent corporate ICT. In fact it was better on the clinical side than the ICT I am working with currently. It is mixed. We have seen the adoption of clinical ICT in the Galway clinic. I know the Hermitage Medical Clinic has a roll-out at the moment. Our hospital is just behind that stage. We are going to catch up and we are planning to invest in that area.

Theatre time is an interesting area. The set-up is typical of all the private hospitals – I have discussed this with people from Blackrock Clinic and the Mater Private Hospital. Typically, staff come in at 7 a.m. and knife-to-skin time is 7.30 a.m. The first patient is prepared, on the table and the surgeon is in at 7.30 a.m. If that does not happen, a big red flag is raised. We have eight theatres in use from Monday to Friday from 7.30 a.m. to 7 p.m. and they go through lunch. Typically, we have two teams on the nursing side. I am unsure what specialty was referred to earlier, but four times seems like a lot. I know of surgeons who could do six joint replacements in a theatre session in one day. They have put it to me that they would be lucky to undertake one or two per week in the public system. I do not know the full reason, I am simply saying that is what they have said to me. That is the process. We offer those slots across the week to a range of surgeons.

Deputy Louise O'Reilly

Can Mr. Fitzgerald give us a view on the reasons? I understand that he may not know, but he has experience in the public and private systems. He knows people who maintain they can do so much more in one than another. I have my views on the reasons, by the way. Does Mr. Fitzgerald have a view on why that is the case?

Mr. Brian Fitzgerald

It is increasingly down to pressure on beds. That is probably the major reason. One of the most disappointing things for me in my previous life was having to cancel elective lists because of the pressure from the emergency department. It is soul-destroying to have to tell a family and a patient. I used to meet the families concerned. I could tell the committee many awkward stories around it. That is the main reason. That is the pressure.

Deputy Louise O'Reilly

There is no difference in the actual practice. It is not in any way, shape or form more or less efficient. It is simply a question of the availability of beds.

Mr. Brian Fitzgerald

Certainly, it is a question of pressure on beds. It is also a matter of the opening times. Our staff come in at 7 a.m. They start at 7.30 a.m. and go through to 7 p.m. based on a shift pattern. In my previous experience, the typical start time was 9 a.m. or 9.30 a.m. with a break at lunch time and we aimed for a finish time of 4 p.m. or 5 p.m.

Deputy Louise O'Reilly

The point I am making is that it is no more efficient; it is simply to do with the person.

Deputy Alan Kelly

The volume per hour is more or less the same. Is that the point?

Mr. Brian Fitzgerald

No, it is complex. However, I reckon the key issue is pressure on beds and the fact that there is no recovery bed.

Deputy Alan Kelly

Let me break it down. What is the position on the amount of time in the theatre actually undertaking the procedure? Is that different?

Mr. Brian Fitzgerald

No, I do not think so. A surgeon doing a hip replacement in a public context-----

Deputy Alan Kelly

The difference between public versus private is not because of the quality of the facility or anything like that. Is that correct?

Mr. Brian Fitzgerald

No, if the surgeon has access to-----

Deputy Alan Kelly

I want to narrow it down to what it is.

Deputy Michael Harty

My question is on the recruitment of nurses. What system is the Beacon Hospital using? Did Mr. Fitzgerald say there were only five vacancies in nursing at the moment?

Mr. Brian Fitzgerald

That is the case at present, yes.

Deputy Michael Harty

The percentage of vacancies in the public sector could be 20%. The Beacon Hospital must have a magic formula for recruitment. How does the group manage it?

Mr. Brian Fitzgerald

I came into the organisation two years ago. The vacancy rate was 10%. It was a red flag for our board. At the time, we had a new board and we were gelling a new management team. We were given a tough task to get out and find people. We went abroad and made visits, predominately to the Middle East. We went to Scotland, London and the Philippines.

Chairman

There was a related question from Deputy Durkan about the split of Irish and non-Irish consultants that the Beacon Hospital employs.

Mr. Brian Fitzgerald

I could not honestly say.

Chairman

Do you have a rough calculation?

Mr. Brian Fitzgerald

I am trying to think of the profile. Maybe a third of our consultants are foreign consultants while probably half of our junior doctors are foreign.

Deputy Bernard J. Durkan

My next question relates to insurance comparisons. There have been allegations in some quarters to the effect that the private hospital system benefits to a greater extent from the health insurance system than the public sector.

Mr. Brian Fitzgerald

Let us consider the charges in the public system. There is a per diem charge. For a level 1 hospital the charge is €1,000 per night. There is a charge for MRI scans as well. If a patient has health insurance and chooses to use the health insurance, the public system will charge that patient €1,000 per night. In our case, our per diem charge is considerably less. I am unsure whether I am answering the question. For example, if a health insurance patient goes to a public hospital, opts to use the public entitlement and does not sign a claim form, the public hospital cannot charge.

Deputy Bernard J. Durkan

I will explain the question I was trying to come at. A programme aired on television some years ago which seemed to level considerable criticism at the private sector on the basis that it was benefitting unduly from health insurance. The implication was that a greater proportion of the insurance cover was being utilised by the private sector by comparison with the public sector. Mr. Fitzgerald denies that.

Chairman

That goes without saying.

Deputy Bernard J. Durkan

I know, but I want to know more about it.

Chairman

You said 90% of your patients are covered by private health insurance, Mr. Fitzgerald. Is that correct? I am unsure what the comparable figure is, but presumably it is low.

Deputy Bernard J. Durkan

I accept that. As a result of that, the responsibility is thrown on to the public sector to deal with the bulk of the severe, acute and expensive medicine required.

An allegation was made in the television programme. Mr. Fitzgerald said the group must make a 5% profit on all procedures on a daily basis or whatever. Presumably, that comes from insurance. I have seen bills from private and public hospitals with mistakes relating to whether the patient was covered by insurance or otherwise or the type of insurance cover. There was a difference of approximately 500%. That is the question I am trying to get at. For example, if I go for a procedure in the public or private sector tomorrow, there is no difference in the cost to the insurers. Is that the case?

Mr. Brian Fitzgerald

There is. I think I dealt with the complexity point earlier. To be clear, the public system may levy a charge on private patients if the private patient elects to use private health insurance, regardless of complexity. If the patient chooses not to, he is treated and pays the Government levy or uses a medical card. Some patients have medical cards and under private health insurance, they do not get a charge.

Operators in the private system have contracts with insurers. We agree a price for them. Typically, every two years we agree a contract and a schedule of prices with all the insurers, including those associated with the Garda, ESB and the Prison Officers Association. That is how we survive.

The reference to the 5% was purely a reference to our need to invest 5% of our revenue every year just to keep our fabric.

Deputy Bernard J. Durkan

That is understood.

Chairman

Could Mr. Fitzgerald clarify whether the charges agreed with the insurance industry are across-the-board agreements or whether they are agreed per hospital?

Mr. Brian Fitzgerald

They are per hospital.

Chairman

The hospitals negotiate individually. There are four more speakers. I call Deputy Kelly.

Deputy Alan Kelly

To refer to Deputy Durkan's comments and the information that the total claims are just under €2 billion, with €600 million paid to public hospitals and the balance, more or less, going to private hospitals, clinics etc., I had not intended speaking on this but it creates a discourse which the witnesses will understand is out there. It comes to us as public representatives and raises concerns. I refer to what Deputy Kelleher said earlier about cherrypicking. I include myself in this, rather than speaking for everyone, but there is probably a misconception of what the witnesses' organisation is or what it does. I know it is a representative body. As a result of this, I have a number of questions which I understand they cannot answer because they will have to try to find the information, if they even can find it. This leaves us with gaps regarding the collation of information from private hospitals. Mistakenly or not, we probably assumed - some of us, including me, did anyway - that they would have their hands on this information but they obviously do not. This is not a criticism. Perhaps we just did not understand or know about this but it does create a gap for us, which we will have to try to fill some other way in trying to find information on the work done in private hospitals.

I have a number of questions. I will try not to repeat the questions that have already been asked, although I may have some nuances to add to them. I have a bee in my bonnet about the issue of ICT and e-health. I understand and appreciate the answers already given regarding the difference between clinical and administrative ICT. I respect Mr. Fitzgerald's honesty in saying that in his current role, some of the ICT on the public side is actually better than the private side. I understand there is a huge cost involved but across private hospitals, is there a kind of coming together or economies gained regarding the type of investment they are putting into ICT across these two completely different areas, namely, the administrative and the clinical? If so, perhaps this could be shared with the public as well because it is all the one. Furthermore, where do the witnesses see the breakdowns regarding the transfer of information interoperability between public and private? I am absolutely convinced that huge efficiencies are possible in this area and I hope we will make reference to them in our final report. Do the witnesses believe and agree that we need to create one unique identification code for all patients in order that there is interoperability between public and private hospitals and across health care?

My next question relates to emergency departments, EDs, and medical assessment units, MAUs, and the 1,000 patients per week. As the committee will know, I have spoken publicly on this. It is quite immoral that we found out during the recent crisis in emergency departments, which is not over yet, that private hospitals were supposedly doing their job, in that they were advertising their EDs to patients while many people - hundreds of people - across the country were waiting on trolleys in public hospitals. How do the witnesses feel their hospitals can play a role in this regard? I believe in ideological debates. I would prefer to see these people treated in public hospitals. However, as an interim step, how do the witnesses believe they could play a better or bigger role in working on an interim solution in the next year or two while we sort out this absolutely chaotic situation? Is there anything in this regard to which they feel they can contribute?

Statistics have been given to us on elective procedures in private hospitals. Reference was made to 50%. Does that change when it comes to the NTPF? Can we break that figure down into types of procedures as opposed to accounting for everything in the one figure?

Regarding the lack of data available on the type or volume of activity in private hospitals, Mr. Fitzgerald talked about the HIPE. Obviously, it is something he feels his sector could work towards into the future. I knew about this, but it is still very concerning. Collectively, we need this information. Do the witnesses feel they are also at a loss because this has not advanced and has not been brought in across private hospitals? Following on from that, what are their views on the advancements of HIQA licensing across private hospitals, which is also proposed?

Mr. Fitzgerald spoke about the transfer of patients from public to private hospitals and from private to public hospitals. Regarding the latter, he spoke about the four different ways in which this might happen. I thank him for his honesty and brevity in this regard. Does this vary by hospital area? Specifically, given the geographical locations of the private hospitals, does it vary based on their locations because of the types of hospitals that may be near them, that is, whether they are tier 1 hospitals? Generally, they are tier 1 hospitals. Does it vary across the country?

The questions about recruitment and length of stay have been dealt with.

Do the witnesses have any idea or knowledge of the percentage of procedures in private hospitals provided for public patients but on behalf of the public health care system? I would appreciate if they would come back to Deputy O'Reilly's questions about support staff across all the private hospitals. That is very important information to some of us on the committee.

I have one final question. Obviously, the witnesses are advocates for the hospitals they represent, and in many ways private investment is important for the existence of their hospitals. They have shareholders. Obviously, because of this, they want profits, etc. Many of their hospitals have been created because of the way in which health care has been managed in this country, and gaps have been created in the market. This is more a question for Mr. Nugent than anyone else. Given the current health care environment in this country - and I hope the committee under this Chairman will change it and have a plan for the next number of decades and the next ten years in particular - do the witnesses envisage any way that they can see new private offerings, private hospitals, etc., being proposed or a need for them anywhere in this country?

Deputy John Brassil

I thank the witnesses for their attendance. Without repeating questions, I will try to be as specific as I can. The terms of reference of the committee are to try to devise a health system that treats a patient in accordance with his or her need rather than his or her ability to pay. According to our objective, were we successful in what we do and were everybody treated in accordance with his or her need, I wonder how many people would take out private health insurance and use private hospitals. The fundamental issue is that people who can afford health insurance get treated and those who cannot, wait. That is the system we are in and about which we are tasked with trying to do something.

In respect of consultants who work in both the private and public systems, do the witnesses know what percentage of consultants - if not across the private system, in their hospitals - do both public and private work? How many work specifically for the private hospitals? I would be interested in that figure if they have it. I know the question was asked but I would like them to come back, if possible, with a specific figure. I am sure they would know the cost of a hip or knee operation.

May I ask the representatives from the PHA to provide the committee with a figure for the cost of a knee operation in a private hospital so that we could compare it with what it costs in the public system?

A witness during an earlier hearing told us that it was six times more expensive to get a procedure done in the public system than it was in the private system. I would like information to back up that comparison so it would be helpful if the representatives would provide us with those figures.

What percentage of the income of private hospitals comes from the public purse as opposed to the income from health insurance? It might have been said that the private hospitals are at full capacity in terms of beds. What percentage of beds in the health service are in the private hospitals sector? In terms of diagnostics, what is the percentage capacity to provide MRI and CAT scans? It would be very useful to know the available capacity in the private hospital system.

We have been made aware that many people in the age 70-plus category who have private medical insurance now have a medical card, as the income guidelines for medical cards are far more generous. One could have a situation where a patient with insurance goes into the private hospital for medical conditions or even an elective hip operation but following discharge would need community health care. Is there a good liaison system, whereby the private hospitals work with the home care teams, the people who set up home help hours, the community welfare nurses and so on or are they simply referred to the GP?

We were told that about 30% of the 70 hospitals are private hospitals, that the private hospitals employ 8,000 staff, have 2,500 beds, conducting 250,000 procedures and carrying out 3 million diagnostic tests. Would the witnesses be able to provide an overall cost for the service, so that we would be able to compare the cost of that service in the private sector with the public system? That would be beneficial.

I have a specific question for Mr. Brian Fitzgerald because he has 25 years experience in management in both the public and private system. I am asking for an honest assessment of the percentage efficiency in the private hospitals versus the efficiency of the public system? Can he tell us what the private hospitals do better? I suspect the private hospitals would run at higher efficiency and I wonder what Mr. Fitzgerald does better now than previously when he was in the public system. What is the reason for the great efficiency?

Deputy Joan Collins

Deputy Brassil made many of the points I intended to make. I appreciate that the representatives from the PHA have come before us. Mr. Fitzgerald stated that 5% profit has to be made to reinvest in infrastructure in the hospitals. How much goes to shareholders? Is that information commercially sensitive? How much goes to marketing for the hospitals as well? They are important parts of how a health service is managed and how the money could be reinvested in the public sector.

Mr. Fitzgerald also referred to accountability and how he had to make himself accountable to his board. Would something similar have applied in his then role as a manager in the public sector? Deputy Brassil also made the point that this committee is examining ways to bring in a health service that is based on need and not on the ability to pay, free at the point of entry and accessible to all.

In his opening statement Mr. Simon Nugent stated, "One welcome innovation has been the reintroduction of the National Treatment Purchase Fund and, while the resources available to be spent in 2017 are modest, PHA members will be able to respond and provide treatment to some of the longest waiting patients on public lists over the coming months". That is a failure in the public health service being welcomed by the private hospital services because it will generate income from the National Treatment Purchase Fund and more patients.

I do not subscribe to private health insurance so I cannot walk up to the door of a private hospital and say that I need a procedure in a private hospital. That is where the ideological debate breaks down. We are looking at how patients are dealt with properly, efficiently and it has to be an efficient system, a system where staff are able to work. The public health service provided such a service for a long time in the general hospitals. There was movement within the structures, people got promoted and people followed the medicine they were interested in.

In 1947 a White Paper was initiated by the Government to look at a national health service similar to the National Health Service established by Bevan and also to examine social welfare payments. It was buried because the then Department of Finance did not want it. There were interested parties who did not want that to happen. With the crisis in the public health service, people want to see a proper public health service that people can access without the need for significant resources or private health insurance.

In his concluding remarks, Mr. Nugent recommends that the committee consider establishing a task force to explore innovative, cost-effective private sector capacity utilisation and so on. However, if we want to provide a public service that is different from the private hospital model, what attitude would he take to such a service?

Chairman

In the context of an universal single tier system, what role would Mr. Nugent see for private hospitals?

Mr. Simon Nugent

I will start with that question and I will try to respond to Deputies Kelly and Brassil as well.

I can understand the committee's efforts to try to work out costs, value for money, efficiency and so on. While that makes perfect sense, there are lots of mechanisms to work out whether the State is getting value for money for any particular expenditure. If we are to have a universal single tier health service, the committee should anticipate all hospitals - private, public and voluntary - as hospitals that are delivery mechanisms that will deliver services in such a system. Then it is up to the procurer, presumably the Department of Health, or whoever is responsible for procuring services to make sure that he or she is getting value for money from whichever hospital is delivering the service. I do not see anything inconsistent between having a universal health service and having private hospitals providing treatment in such a scenario.

In terms of value for money, I would add that the last time there was a detailed exercise done on this was when the NTPF was running previously. The Comptroller and Auditor General, understandably, took close interest in how it worked. The committee might be interested to note that at that time, back in 2008 and 2009, the Comptroller and Auditor General’s reports concluded that relative to the case-mix benchmark, procedures purchased from private hospitals by the NTPF generally cost less than those carried out in the publicly funded system.

The procedures we offer are offered on a value-for-money basis. We would not expect any Government procurement body to be purchasing services unless we were delivering value for money.

Chairman

I think it is important to point out that the finding was on the basis of the absence of a measurement system for consultants on public contracts. We had the phenomenon of people who were on a long waiting list for Doctor X so they went through the NTPF and in some cases they were treated by that same Doctor X, but in the private system. Concerns were raised about that -----

Mr. Simon Nugent

Indeed, they were.

Chairman

----- circular phenomenon and the lack accountability for consultants at public hospital level.

Mr. Simon Nugent

That is correct. There were questions about how the NTPF operated but things have moved on a lot since then. In particular, one can look to the whole area of activity-based funding and the efforts that have been made within the Department and the public system to work out costs and so forth. At the end of the day, our hospitals would have no difficulty standing up and competing for the delivery of services because we believe we provide value for money.

I will now address Deputy Kelly’s numerous questions. We also have a bee in our bonnet around the question of ICT. Relatively recently the association set up a new working party of the chief information officers of all of the hospitals to make sure that we are working as closely as possible with the e-health agenda of the HSE. Mr. Richard Corbridge has appeared before this committee. He has also met our working party a couple of times since it was set up. A key part of the integration process is to make sure that all-----

Deputy Alan Kelly

Did that working party meet the HSE? Is there someone from the HSE working with the association on that?

Mr. Simon Nugent

Well, Richard Corbridge has been to a couple of the meetings and is due to attend the next one. A lot of effort is being made to ensure that we take advantage of the sharing that is possible. There are all sorts of areas where this is relevant, like the sharing of images under the national integrated medical imaging system, NIMIS, and the individual patient identifier to which the Deputy referred. All of these things are very important if we are to have an efficient universal health service in the future and that is why we included it in our submission in August. It is something that we would encourage this committee to support because it needs focus.

Deputy Alan Kelly

Could the PPS number be the unique identification code?

Mr. Simon Nugent

I doubt the Chair wants to drag me into a debate about the relative merits of health identifiers versus PPS numbers.

Deputy Alan Kelly

She might-----

Chairman

That whole project is being headed up by the HSE. I understand that the private hospitals will fall in with whatever is proposed for the public system.

Mr. Simon Nugent

In fairness, the chief information officer of the HSE is very anxious that it be all-of-system in nature rather than solely public system and that is very sensible because many patients spend part of their voyage in the private system and the rest of it in the public system.

Mr. Brian Fitzgerald

Mr. Nugent has already mentioned NIMIS. Healthlink is another system that is at play in both the public and private systems and is used for communication with GPs. The committee should note that the public system was the first to move on electronic health claims to the private health insurers which is now being implemented in the private system also.

Mr. Simon Nugent

Deputies asked about the role we could play in relieving the current emergency department crisis and this is part of the discussions we are having with the Department. We might work with more GPs to get them to refer patients to our emergency departments rather than to the over-congested public emergency departments. Various arrangements could be put in place to facilitate patients being routed to a private hospital rather than ending up in a long queue or on a trolley in the public system.

We were asked if the numbers we referred to in respect of elective procedures included patients referred by the NTPF. The answer is “No” because there was no NTPF activity during the year in question.

The issue of HIQA licensing was also raised. There are two different initiatives that are relevant in that context. The Joint Oireachtas Committee on Health, chaired by Deputy Michael Harty, has recently been looking at the Health Information and Patient Safety Bill which will extend the remit of HIQA to the supervision of private hospitals. This is something that we have supported and looked forward to since the publication of the Madden commission report in 2009. We are absolutely supportive of that and are absolutely confident that our standards will bear scrutiny.

The other dimension is the issue of licensing. There are plans afoot to introduce patient safety licensing for the entire health system. Again, this is something we are totally open to and supportive of and we are a party to the Department of Health working group that is preparing that legislation.

A question was asked about the percentage of procedures in private hospitals that are provided to public patients. It is no more than 5% at present and any change in that percentage would depend largely on the scale of the NTPF activity.

Deputy Alan Kelly

I asked if the transfer of patients is geographically determined.

Mr. Simon Nugent

It is difficult for me to be precise on that. Obviously, it is in large population centres where one tends to find both tier 1 public hospitals and private hospitals so-----

Deputy Alan Kelly

What I am trying to get at here is obvious. In every area where there are private hospitals, the make-up of the local network of hospitals is different. This committee is discussing that issue separately but what I am trying to find out is why there is a variance in transfers from area to area. Are there other reasons for that, apart from geography?

Mr. Brian Fitzgerald

I think it is related to the severity of the care required. Obviously, there are certain centres that have, for example, transplant units and in that context, it would not matter where the private hospital was located; they are the centres to go to. It is a severity of care issue too.

Deputy Alan Kelly

There are probably more issues than that involved.

Mr. Brian Fitzgerald

Yes, there are but the primary issue is that we send the patients to specialist centres if that is the kind of care they need.

Chairman

Do the witnesses have a rough, ballpark figure for the percentage of patients who are referred to specialist public centres?

Mr. Brian Fitzgerald

Off the top of my head, I would say there would be one incident per quarter.

Chairman

Okay. The private sector is dealing with approximately 1,000 emergency department patients per week. Is that correct?

Mr. Brian Fitzgerald

Yes. That figure is for the whole sector.

Chairman

What percentage of those patients would be transferred to public hospitals?

Mr. Simon Nugent

It would be a very small percentage.

Mr. Brian Fitzgerald

Very few.

Deputy Alan Kelly

Would it be less than 5%?

Mr. Simon Nugent

Yes.

Deputy Alan Kelly

Would it be less than 3%?

Mr. Brian Fitzgerald

I would say it is less than 1%.

Mr. Simon Nugent

It was argued earlier that this is a very substantial issue and I meant to disagree at the time. I do not think it is a substantial problem.

Deputy Alan Kelly

That is interesting. I ask Mr. Nugent to address my six-mark question.

Mr. Simon Nugent

I must ask the Deputy to repeat it.

Deputy Alan Kelly

It relates to the future provision of private hospitals. Will there be any more private hospitals developed here?

Chairman

Is it an expanding area or is it contracting?

Mr. Brian Fitzgerald

It is very unlikely because we are reliant on contracts with health insurers. Based on past conversations with the insurers, there is no appetite to give new contracts or new beds.

Mr. Simon Nugent

Effectively, there is a capping of the number of insured beds in the system.

Mr. Brian Fitzgerald

It is very unlikely that any proposal would be bankable.

Chairman

There were a number of questions from Deputy John Brassil on the consultant contract. The witnesses before us are consultants. I ask them to give us a picture of the kinds of contracts that are in place.

Mr. Simon Nugent

The Deputy asked how many are private-only as opposed to mixed public-private contracts. That is remarkably hard to count because many consultants work in more than one private hospital.

I believe the answer to the question is that there are about 300 consultants who only work in private hospitals and that more than 800 consultants are working in one or more private hospitals. That is as good as I can do.

Chairman

The second figure of 800-----

Mr. Simon Nugent

There are more than 800 consultants who are working in one or more private hospitals.

Chairman

What percentage of consultants have contracts to work in the public sector?

Mr. Simon Nugent

Probably all of the remainder. Of the 800, at least 500 work in the private and public sectors.

Chairman

Therefore, we are talking about in excess of 500 consultants who are working in one or more private hospitals as well as in public hospitals.

Mr. Simon Nugent

Yes.

Chairman

It is a long working week. Where is there oversight of the hours worked?

Mr. Brian Fitzgerald

Between the two systems.

Chairman

Yes.

Mr. Brian Fitzgerald

There is none.

Chairman

Are there further questions from Deputy John Brassil on whether private hospitals engage with community services, social services and so on?

Mr. Simon Nugent

I mentioned it as one of the areas in which we were working with the Department to see what more could be done. It could be described as episodic rather than structured. It should be borne in mind that almost every patient treated in a private hospital is referred by his or her GP who is responsible for helping him or her to find other services thereafter.

Chairman

Once patients are gone from private hospitals, they are gone. I cannot see them interfacing much with community care services.

Mr. Brian Fitzgerald

There will be follow-up appointments post-surgery.

Chairman

Private hospitals do not link with community care services, apart from GPs.

Mr. Brian Fitzgerald

We do. We do not link as seamlessly with public services, but there are home care providers in the private setting with which we work. For example, Voluntary Health Insurance, VHI, offers a home care service that takes patients from private hospitals, but generally the GP is the gatekeeper for the patient when he or she has received treatment.

Chairman

Mr. Fitzgerald was invited to comment honestly, if he was prepared to do so, in comparing the two systems.

Mr. Brian Fitzgerald

On the questions on utilisation and the cost of hip and knee surgery, I could come back to the committee with statistics. It would be unfair to do so now because I would have to talk to my colleagues to see if we could provide something generic and anonymous to some degree, if the Chairman does not mind. On the need for efficiencies and the availability of information, all of the private hospitals, with the exception of one, publish their accounts which are placed in the Companies Office. We all have volume statistics that are publicly available.

Chairman

Which hospital does not publish its accounts?

Mr. Brian Fitzgerald

I understand it is the Mater Private Hospital, but all of the other hospitals do. The financial information is quite detailed and includes notes on dividends paid to shareholders. All of it is publicly available. With a little extra detail, I believe the committee could make a fair stab at coming to a view on the need for efficiency or otherwise with the statistics Mr. Nugent has given to it.

Deputy John Brassil

It is good to have somebody before the committee who has worked in and has experience of both systems. I would be very interested in hearing Mr. Fitzgerald's honest appraisal, if he wants to give it to us.

Mr. Brian Fitzgerald

It is hard to give percentages, but I say honestly to the committee that I have committed my life to working in the public system. I love it and the people with whom I work who, I can testify absolutely, are fantastic people. I have got to a stage in my career, however, where I could not comment credibly on health issues without spending some time in the private system. The people with whom I work and I can certainly make decisions much more quickly in this working environment. The plans we have put together for running the hospital are very robust and detailed and, honestly, I find a different level of scrutiny at governance level.

Deputy John Brassil

The accountability in Mr. Fitzgerald's job is far greater than it was.

Mr. Brian Fitzgerald

Accountability has been mentioned. I have been kept on my toes, but was I kept on my toes every hour of every day in the public system? The answer is perhaps not. There is also a psychological issue. I mean no disrespect, but if a person is a public servant, joined the system in his or her early 20s and worked his or her way up, perhaps now in his or her early to mid-40s he or she has become a little stale. It is a permanent and pensionable job which perhaps psychologically and in the background has created a block to making innovative decisions. I am being honest, but that has been my experience. The Deputy asked me to be honest.

Chairman

There are two factors that must be borne in mind - the complexity of the work done in the public system and the fact that accountability processes in the public sector are not what they should be. I believe we all accept this.

There were a couple of other questions from Deputy Joan Collins. The delegates have answered the queries about shareholders. It is information that is publicly available and which varies from hospital to hospital. Some hospitals within the private sector are more successful than others, while others are in difficulty. The delegates have touched somewhat on the issue of accountability. Was the Deputy satisfied with the reply?

Deputy Joan Collins

Yes. Is there a figure for how much of the profits are spent in marketing?

Mr. Brian Fitzgerald

We have a team of three in our marketing department. We probably spend less than €200,000 per year. In a previous life I had a PR company, but, to be honest, I do not see that as a major issue in making a comparison.

There were references to having one tier, as well as to health insurance payments. It must be remembered that €600 million is paid to public hospitals. All of the money is not to private hospitals. I have been thinking about this matter a lot lately and will finish on this point. The other side is that the Government collects €50 billion in taxes from various sources, of which just under €20 billion is income tax. Some €15 billion is spent on the public health system. I buy an insurance policy and if I keep paying I know what I am getting. I do not get anything from the Government for the tax paid into the public health system and no acknowledgement. There is no piece of paper stating, "Here is our contract". Probably 75% of the money raised in income tax is being put into the public health system and, as citizens, we do not-----

Chairman

There is tax relief on insurance premiums.

Mr. Brian Fitzgerald

I have an insurance policy that tells me the hospitals and procedures for which I am covered, but as a taxpayer my biggest bill is for the public health system and I do not receive a contract. I do not know what I get in return.

Chairman

What does Mr. Fitzgerald mean by his biggest bill?

Mr. Brian Fitzgerald

It is my biggest household bill.

Chairman

What is it for?

Mr. Brian Fitzgerald

The public health system. It is paid from paid income tax receipts. That is my belief and I would like to be proved wrong.

Chairman

It covers all services.

Mr. Brian Fitzgerald

If one has health insurance for the private system, one knows what one is buying. In the public health system we do not know we are getting.

Chairman

There are two more speakers, Deputies Pat Buckley and Louise O'Reilly.

Deputy Pat Buckley

I will be very brief. I appreciate the honesty shown on the issue of beds. I am delighted with the honesty shown on the issue of accountability because it has come up over and over again. In the past ten years have the delegates seen a lot more demands on private hospitals? Based on the current system, do they think there will be a demand for a lot more private hospitals? Is it a reflection on the fact that the public health service is not working?

Chairman

The point has been made that the insurance industry has indicated that it will not fund further private hospitals.

Deputy Pat Buckley

I am sorry, but I missed that point.

Deputy Louise O'Reilly

I thank the Chairman for giving me the opportunity to come in again. Mr. Fitzgerald has said there are no unions in his workplace.

I would be interested in finding out whether that is a policy or whether it is simply because they are there.

My next question is for Mr. Nugent. We have discussed at length the differences between the public and the private sectors and we all acknowledge that nothing different is done in a hip operation in the public sector than one in the private sector. Obviously, there are efficiencies and savings that are made in the private sector that might not be made in the public sector. By way of exploring that, I appreciate that Mr. Nugent does not have the information to hand but could he provide the committee with details of pay rates, the numbers of staff by grade directly employed, the outsourcing of functions and the pension arrangements for staff? I am specifically interested in the pension arrangements for all staff. Like Mr. Fitzgerald, I have experience of both the public and private health care systems as a person who represented workers in both and I know that sometimes there can be differences in pensions. It concerns where the overheads are, where the money is going, the extent to which pension schemes exist, how they are funded, whether they are defined contribution or defined benefit and the grades and categories they are available to. Could the committee be provided with copies of the sick leave schemes or a synopsis of paid, unpaid and partially paid sick leave arrangements that would apply in hospitals? I am interested in this because, obviously, taxpayers' money goes into the private sector and, clearly, the Government has an obligation to spend that money in upholding good standards, including good employment standards. I am not suggesting that they are anything other than that. In respect of the Beacon Group and the statement by Mr. Fitzgerald about not having unions, I would be very interested to know if that is a policy or whether it is simply the way it is.

Chairman

Throughout the morning, we have been very conscious of the dearth of data for the witnesses' operations. We are seeking as far as possible to base our decision making on evidence and it is hard to do that when there is no comparative data between public and private. The witnesses have been requested to provide information on a number of different areas. It is entirely up to them as private commercial entities whether they wish to do that but I ask them to note that request and make a decision on whether or not they want to come back to us with any of that information, which might help our deliberations. I thank Mr. Nugent and Mr. Fitzgerald for their attendance and for assisting in responding to the many questions that were asked which, no doubt, will feed into the deliberations and final decisions of this committee.

The select committee went into private session at 11.33 a.m and adjourned at 11.45 a.m. until 9 a.m. on Wednesday, 25 January 2017.