The Many Faults of Co-Location


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The simplistic idea behind co-location – to create extra space for public patients in public hospitals by transferring the care of private patients currently occupying beds in those hospital to new private hospitals on the same campus, with the private sector encouraged to pay for these new hospitals through tax-based incentives – is deeply flawed.  Behind it is an unshakeable belief in ‘market justice’.  Market justice, as opposed to social justice, is entirely inappropriate for health care: the US has had over three decades of experience with the market justice model – it has manifestly failed.The government’s cognitive bias has prevented it from recognizing that this apparently simple scheme has far too many faults for it to have any chance of providing a reasonable framework for health care delivery.

1. Social Division

The very worst feature of co-location is the extremely ugly concept of segregating the sick according to their socioeconomic status.  This undermines the community’s sense of social solidarity, of everyone being in the same boat, when it comes to illness.  It further excludes the already-excluded poorest members of the community.  This is particularly relevant in a city like Limerick, where despite exceptional economic growth, great swathes of deprivation and multi-generational poverty remain plain to see in some of the worst of housing estates in Europe.  The idea that the rising tide would lift all boats has proved to be a fallacy.

Co-location will further diminish the less well off person’s sense of worth, with the State effectively saying to them: “You people are poor.  You belong in the run-down, overcrowded and under-funded public hospital.  You are a burden on the State. If you had any worth, you would be able to pay for your own health care and obtain it at that nice new private hospital across the car-park.”

To those who have private insurance, most of whom are very ordinary wage-earners, including many public employees, and most of whom find the cost of private insurance a considerable burden, the State is saying: “You people are well off.  You can well afford to pay for you own health care.  You are not our responsibility.  Off you go and get your care from the private sector.  And pay whatever the investors ask.  This State is washing its hands of you.”

No government in the history of the State has ever attempted to impose such a disgraceful social injustice on the Irish people.

2. Expense

Eamon Gilmore ably demonstrated the true cost of the co-location project in the Dail earlier this year. Between tax-breaks and the loss of income from private rooms to the public hospitals, the total bill is €1.3 billion over seven years.  Hospitals cost about €1 million per bed to build.  For €1.3 billion we should, in fact, be getting 1300, not 1000, extra beds.

In the long run, privatization of the hospital sector will be ruinous.  Costs will escalate to US levels (health care expenditure now accounts for 17% of US GDP and sickness is the number one cause of personal bankruptcy).  Only the wealthiest will be able to afford good medical care.

Private for-profit hospitals are not more efficient than public hospitals, except in one regard: they are extremely efficient at maximizing profits.  Techniques identified in the US include ‘up-coding’, where the patient’s medical condition is exaggerated to attract higher payments; choosing more profitable treatments over the best treatments; over-investigation – using more expensive and often unnecessary diagnostic tests such as MRI’s; bed-filling – keeping patients in hospital unnecessarily until there is another patient to fill the bed; off-loading – finding ways to transfer sicker and less profitable patients back to the public sector; and finally, operating on healthy patients and lowering the threshold for operating, when it is not clear that surgery is actually necessary.

Sensational greed has been a hall-mark of for-profit hospitals in the US.  CEO remuneration is typically 180 times that of a house-keeper in the for-profit sector (compared with 20 times in the not-for-profit and public sector).

The total amount money, public and private combined, to provide for the health care of the community is limited.  If the wealthier have to spend more and more on their private health insurance, they will have less money to give to the State as taxation, so redistribution is reduced.  Thus, the amount of money available to the government to spend on public health care is diminished.

3. The Replication of Services

In order to get around certain aspects of competition law, the morons behind this project devised an ‘equal case-mix’ scam so that the private for-profit hospitals might be ‘prevented’ from getting up to their usual trick of ‘cherry-picking’ profitable cases.  Equal case-mix means that it will be necessary to have two intensive care units, two oncology units and two coronary care units on the one campus.  There is a shortage of the highly skilled personnel needed to staff these specialized areas, especially ICU nurses and doctors.  No intensive care specialists support this plan and all consider it complete madness.  No doctors appear to have been consulted.  It is similar to allowing a quango of political advisors to plan new bridges without consulting engineers or to plan invasions without discussing the matter with the army generals.

Far from being a synergistic relationship, the private hospital’s relationship with the public hospital will be totally parasitic.  It will be ideally placed to easily obtain the services of the public hospital’s highly skilled personnel, who have been educated and trained largely at the State’s expense.

The operational problems that this replication will cause are immense.  For example, were two patients with an identical medical emergency, such as an aneurysm, to require emergency surgery, one patient  insured and one uninsured, two separate teams of vascular surgeons, anaesthetists and intensive care specialists, along with the necessary support staff, would have to be on stand-by.  This makes no sense, economically or medically.

4. Poorer Access to Highly Specialized Services

Many consultants have highly specialized skills and provide very specialized services. Some doctors may be the only ones who can deal with certain types of medical conditions in a given region.  If such a highly specialized doctor opted to work only in the private sector, his skills would be unavailable to public patients, and vice versa, except through special and costly arrangements.  It is simply not possible to replicate the current skill mix of all of these doctors in a way that makes for a cohesive operation of the co-location plan.

5. Poorer Care

As I outlined in my letter to the Irish Times, there is a large body of evidence in the medical literature to show that for-profit hospitals provide poorer quality care at higher costs. No research, none, has shown that for profit hospitals do a better job and there is very little to show that they come even close.  If such research did exist, one may be quite sure that the for-profit barons would have it well advertised. Statements by promoters of for-profit hospitals that such material exists are just examples of the elaborate and carefully-wrought stercor tauri that they constantly peddle to the media – and they have an excellent PR system to peddle it for them.

The perversity of privatizing medical care has been demonstrated expertly by Professors Steffi Woolhandler and David Himmelstein of Harvard Medical School in several articles.

6. The ‘brain-drain’

Doctors and other health professionals working in the public hospitals will become increasingly frustrated with the lack of investment in and the gradual deterioration of those hospitals, and with the over-crowding and the complaints.  They will be attracted to the relatively comfortable life of working in the private sector, with leisurely consultations in a boutique-style environment, with managers bending over backwards to facilitate them and provide them with convenient operating theatre sessions, and no hassles.  There will be a commensurate deterioration in the quality of the public service.  This will be a particular pity – hospitals where consultants do all of their work, public and private, under the same roof, are known to be highly efficient: this efficiency will be lost.

Dr Gerry Burke, FRCOG, is a consultant obstetrician & gynaecologist in Limerick’s Regional and Maternity Hospitals. He is also a member of the Labour Party.


The photograph above was taken from a campaign to prevent the closure of St. Michael’s Hospital in Dun Laoghaire and was originally published on


3 Responses

  1. Dermot Looney

    September 9, 2008 9:33 pm

    Congratulations on an excellent, accessible and to-the-point piece from someone in the thick of it. This should be also published on and in as many newsletters, magazines, journals and other publications of both political and health interest. Callously, health is already being targeted in the economic downturn. Now, more than ever, public investment is a must and with developers looking with foaming mouths at the steadiness of income provided through so-called “co-location” it is essential that we continue to campaign for a decent, civilised, universal healthcare.