Funding the health service in Ireland

July 14th, 2005 | by aobaoill |

Tomorrow’s Irish Times has an intriguing front page article about a government plan to convert many private beds in public hospitals to public use. (For those not familiar with the Irish health system, it is as complex and convoluted as it sounds.) The plan is to sell land on the grounds of the public hospitals to private developers to build facilities that will replace the private beds being lost. Still with me?
OK, then, how about this: the public hospitals stand to lose some of the €220m per year they currently get in income from the 2,500 private beds they currently have. The newspaper reports that It costs up to €500,000 to provide a new hospital bed, and about €300,000 a year to staff and run one.
To my mind the cost of the private beds is therefore currently €750m with income of €220m. From the point of view of the public hospitals they will have the same costs, with less income, so I can understand why they might be reticent about the move.
Looking to the private sector, however, it seems that the only way for this to be worthwhile, only counting current costs, is to triple the cost to customers or to operate on one third the income that public facilities require.
Whatever your belief about the possible efficiencies that privatization might wring from a system, 70% seems awfully high. Especially given that areas like nursing are seemingly facing labour shortages. How is a system to make significant savings when trying to compete with an existing system for a limited and specialized group of workers?
Of course, Ireland already has private facilities existing outside the public hospitals so someone with more knowledge than I could tell me the difference already existing between charges in private hospitals and charges for private service in public services. Is it really as stark as these numbers would suggest?

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