Private work hits public hospitals

Many consultants are still carrying out in excess of the allowed 20 per cent ratio of private work in public hospitals, and pocketing this money themselves.

Susan Mitchell

Deputy Editor and Health Editor @susmitchellsbp
31st August, 2013
Hospitals are reluctant to recoup the cash that health insurers pay consultants who have exceeded their private practice quota. Photo: Getty

It's been almost five years since the new hospital consultants' contract was introduced. It granted a pay increase to consultants, in return for changes in work practices, accountability for their output and an end to unfettered private work in public facilities.

While some of the back pay for consultants remains outstanding, more than 80 per cent of consultants are now working as either public-only doctors, or are allowed 20 per cent private work (or 30 per cent in a small number of cases) according to what were described as "rigid contractual arrangements".

These private practice limits are supposed to be monitored by the clinical directors and hospital managers. But the contracts are not being enforced, as shown by figures from the Health Service Executive (HSE).

In 2012, more than 50 per cent of inpatients treated at Croom Orthopaedic Hospital were private patients, while 38 per cent of inpatients treated at the Royal Victoria Eye and Ear Hospital and 36 per cent of those treated at Mercy University Hospital in Cork were private patients. Some 35 per cent of children treated at Crumlin Children's Hospital had private health insurance.

That a considerable number of patients treated in public hospitals have private health insurance is unsurprising.

After all, about half the population has private health insurance. Many emergency admissions are patients with private health insurance.

Hospitals can only claim bed charges from health insurers for patients treated in designated private beds, but consultants can levy a fee for private patients treated anywhere in the hospital.

Under the terms of the consultants' contract, hospitals are entitled to recoup the cash that health insurers pay consultants who have exceeded their private practice quota. Yet in the five years since the contract was introduced, just one consultant has been asked to return money owed to the hospital. Why?

"The HSE and the Department do not want to know. The Department has told us there is no appetite to take on the consultants as it took so long to get the last contract across the line," said a senior source in the health insurance industry.

The contract specifically states that any excess fees earned as a result of this private work must be returned to the hospital where the doctor is based, and all further private work must stop until the re-balance is achieved.

Two senior insurance industry sources said health insurers had repeatedly raised concerns with the Department of Health. Both said widespread breaches were evident throughout the country.

"These contracts aren't being policed at all. There is evidence that Category A [public-only] consultants are charging for private patients. Many Category B contracts are doing private practice outside of the public hospital where they work. This was not allowed under the terms of their contract," said another senior figure in the health insurer industry.

"The contracts just aren't being policed at all. Some Dublin hospitals are giving side letters to doctors to say they can have privileges outside the hospital where they are employed under a public contract. Again, it's not allowed under their contract."

Who is losing out? Well, public patients are, as many hospital consultants continue to prioritise private patients in public hospitals. Hospitals are also losing out. Many public hospitals are struggling to maintain services due to successive budget cuts. The failure to recoup money paid to consultants means they are losing a badly-needed source of income.

The Department of Health is unwilling to tackle the problem, despite being aware of what is happening. The Blackrock Clinic in Dublin has repeatedly criticised the fact that doctors with public contracts in St Vincent's Hospital were being allowed to work in the separate private hospital there.

St Vincent's has argued the private hospital is a de-facto co-located hospital. This anomaly means that consultants at St Vincent's have much greater earning potential from private patients, and has resulted in a number of hospital consultants at St James's leaving to join St Vincent's. The Mater Hospital in Dublin is now claiming that the Mater Private Hospital is also 'co-located'.

The Mater Misericordiae Hospital is owned by a religious order, whereas the Mater Private is 50 per cent owned by London-based private equity firm CapVest.

Capping the amount of private practice that consultants could carry out in public hospitals was a cornerstone of the new consultants' contract. The previous contract capped the private practice of consultants, but their private work was not closely monitored. This situation was open to widespread abuse.

There were claims that too many hospital consultants were not pulling their weight or working the hours they were paid to work in the public wards, as they were too busy with more lucrative private patients. Consultants were regularly portrayed as an obstacle to healthcare reform.

In January 2008, then Minister for Health Mary Harney said the new contract would mark "a new era for our health services", which would provide "the key to unlocking great improvements for patients that will be far-reaching and long-lasting".

Harney sanctioned sizeable salary increases. In return, the state was said to be securing an extended working week and longer working hours from consultants, as well as a balance between public and private work that would be managed and properly implemented for the first time.

Although the pay rises were not delivered in full, the cost to the exchequer has increased from about €350 million in 2006 to €500 million today in consultants' salaries alone.

There was a time when the HSE was interested in policing the contract. A source familiar with its implementation claimed a number of hospitals provided the HSE with falsified data soon after the contract was introduced to try to convince the Executive that their hospital was in compliance. Some hospitals did not even bother to record the data, the source said.

A former HSE board member told The Sunday Business Post that the possibility of getting the Revenue Commissioners to investigate was raised at several board meetings. Consultants, for example, get to use nurses, laboratories and other expensive equipment in public hospitals free of charge. It is understood that the HSE decided against making a direct approach to the Revenue Commissioners.

When senior HSE figures realised the extent of the contract breaches, the HSE started doing its own audits.

Sean McGrath, then head of human resources, and Brian Gilroy, then director of operations, spearheaded the drive to bring consultants into line. In 2010, they fired off letters to some of the worst offenders - those doing the highest amount of private work. They were ready to take legal action against one, or possibly more, consultants in the mid-west.

Then, there was a change of government. Under the new regime, the focus has been on getting consultants to participate in clinical programmes designed to improve patient care pathways. McGrath and Gilroy (both of whom have since left the HSE) were increasingly isolated from talks with the Irish Hospital Consultants Association, with the Department of Health taking the lead.

In the initial stages of the discussions on the new contract, Harney stated that all new contracts would be public-only, and that all private beds would be in co-located hospitals (the previous government's plan to build private hospitals on public hospital grounds under public-private partnership arrangements).

That, of course, has not been the case in 2013, as the hospital co-location plan has been axed, and most consultants have opted for limited private rights.

Many consultants themselves say the contract has achieved little or nothing, in terms of tangible improvements to patient care for public hospitals.

Attracting top candidates to public hospital posts has become increasingly difficult. They can earn more money overseas and some specialties can earn significantly more in full-time private practice.

The consultants' contract was never designed to reduce private practice, but to ensure that everyone got equity of care in public hospitals, and to remove the financial incentive to treat private patients ahead of public patients.

That has not happened - principally because it is not being enforced.

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