August 31st Afternoon (The Sun Also Shines): The Recession Diaries

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absurd.JPG I don’t know Dr. Gerry Burke.  Were he to walk past me on the street, I wouldn’t know him.  So, please, someone point him out.  I want to buy him a pint.  For Dr Burke has been going around getting himself disliked in certain circles.  He has made a complaint to the Competition Authority, claiming that the building of a co-located hospital on the grounds of the Limerick Regional Hospital would create a monopoly situation.

“This is anti-competitive and dangerous for consumers . . . Competition implies multiple buyers and sellers in the market. We will have multiple buyers but a single seller.”

The buyers Dr. Burke is referring to are sick people.  The single seller is the Beacon Medical Group who will be building the co-located hospital.  So what does Dr. Burke want?  More co-located hospitals so we can have more ‘sellers’ and, then, have a cracking good market whereby sick people drag themselves from private hospital to hospital in a ‘shopping around’ exercise?  That would seem to be implied in his complaint but I severely doubt that’s what he want.  He laid clear his reasons for going to the Competition Authority:

‘Among the material I have submitted to the Competition Authority are papers from first-rate peer-review medical journals, such as the New England Journal of Medicine, the Journal of the American Medical Association and the Canadian Medical Association Journal.

In high quality studies  . . . involving very large numbers of patients and hospitals, it has been shown that mortality is 2 per cent higher in for-profit hospitals (a study involving some 36 million patients); that mortality is over 8 per cent higher in for-profit dialysis units – an excess of some 2,500 annual deaths in the US; that payments to for-profit hospitals are 19 per cent higher . . that five different measures of quality of care for three acute medical conditions were consistently worse in for-profit hospitals (a study involving some 4,000 hospitals); and that for-profit hospitals spend less on nurses and more on managers.

Thanks to its reliance on for-profit hospitals, the US is now spending 17 per cent of its GDP on health and getting consistently mediocre results. This expenditure is expected to rise to a bankrupting 20 per cent in the near future. But very great fortunes are being made by CEOs and investors in this massive industry.’

Dr. Burke’s concern is not competition, or the lack of it.  His concern is the policy of co-location itself.  His complaint, therefore, is tactical – whether it is an attempt to derail co-location on whatever ground can be found or, at the very least, to highlight how the Government’s health strategy is both inequitable and ludicrous.

And dangerous. And costly.  In addition to the material referred to by Dr. Burke, there is a study published in the Social Science Quarterly – Two Decades of Research Comparing For-Profit and Nonprofit Health Provider Performance in the United States – which conducted a comprehensive survey  of data-based, peer-reviewed scientific assessments of performance differences between private for-profit and private nonprofit healthcare providers in the US between 1980 and 2000.  The institutions examined included hospitals, nursing homes, hospices, dialysis centres and psychiatric hospitals, and non-profit institutions were rated far better than profit ones:

  • Quality of care: non-profits led by a ratio of 4 to 1
  • Access: non-profits led by 20 to 1
  • Cost / Efficiency:  non-profits led by more than 2 to 1

Profit hospitals and other care centres are worse in terms of all categories measured.  The taxpayers are expected to shell out €500 million in tax subsidies to private providers and this is what we will get: a new health system that has lower care quality, less access and is more inefficient and costly.  And more people will die. What a deal!

But the money train doesn’t stop there.  The Sunday Business Post reports that the banks won’t ‘pony up the dough’ for private hospital construction unless the Government gives them a guarantee:

‘The government is understood to be unwilling to underwrite any loss, but mechanisms are likely to be examined which would guarantee some payback for the banks in the event of a project failure.’

Bloody hell.  The Government argued that its co-location plan would reduce public expenditure.  On top of the tax subsides, taxpayers will be shelling out if hospitals fold.  And not only the cost in terms  of subsidising bank loans, but in the losses that investors will be able to write-off against their tax bills.  There is absolutely no end to public subsidies for private profit.

Hopefully, Dr. Burke’s complaint will be upheld (I’m not holding my breath, and I doubt that Dr. Burke is either).  But if it only highlights the absolute absurdity of the Government’s policy, he will have done a good day’s work.

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