From top Health Minister Simon Harris; Larry Goodman (left) and Denis O’Brien
In the Dáil.
Rise TD Paul Murphy asked the Minister for Health Simon Harris about the cost of leasing private hospitals during Covid-19.
They had this exchange:
Paul Murphy: “I want to ask the Minister about the cost of the private hospitals. The Taoiseach confirmed to me two weeks ago an estimated cost of €115 million per month for the leasing of the private hospitals.
“I then later asked the Minister for Finance why we are paying more than four times as much per bed as they are in the UK, which he was not able to answer.
“I then wrote to the Minister for Finance, copying to the Minister for Health, seeking the publication of the final agreements with the individual hospitals, a detailed breakdown of the €90.2 million which has been already given to the private hospitals and asking him again to explain the discrepancy between the €44,000 paid per bed in Ireland and the €10,000 paid per bed in Britain.
“I will give one example as to why we need to see these figures. The Beacon Medical Group was bought by Mr Denis O’Brien for €35 million, according to The Irish Times. If they get €44,000 a month for 200 beds, the State will have paid more than €35 million in four months but will not own a bed at the end of that process.
“Can we get the full final agreements? Can we get a breakdown of the costs so that we can see if there is profiteering going on?”
Simon Harris: “I thank Deputy Paul Murphy. I have done everything I can to be transparent in relation to this.
“First, payment will be on a cost only open-book model whereby the hospitals will be reimbursed only for the operating costs properly incurred during the period. The costs that will be covered will be limited to normal costs of operating the hospital.
“Since the rationale for the arrangement relates to the Covid-19 pandemic for which no one can provide a definitive time horizon, it is not possible to indicate a precise cost estimate attaching to the arrangement but the final cost will be verified by an independent firm of accountants appointed by the HSE and the private hospitals. There is also an arbitration mechanism in place in the event of any disagreement.
“Under the heads of terms, private hospitals are funded to 80% of their estimated monthly costs in advance by the HSE.
As the Deputy says, €90.2 million was advanced to the hospitals for April.
“We will independently verify that and claw back if we find any issues as we audit it. This will continue to be examined by a committee of public accounts in due course and will be subject to the normal scrutiny by the Comptroller and Auditor General, and I lay an agreement before this House.
Murphy: “Directors’ pay at Beacon in 2018 was almost €1 million.
“Are we paying the directors’ pay? Are we paying the bloated pay of the CEO on top of that? These companies often officially claim to be making no profit but make intra-group transfers through transfer pricing, interest payments and fees to other companies owned by the same person.
“With that in mind, are we paying for any rents or interests to Mr Denis O’Brien, Mr Larry Goodman or any of their companies?
Specifically, do the payments we are making include rent or interest payments made directly or indirectly to companies owned by Mr Denis O’Brien or Mr Larry Goodman which are registered in Luxembourg in order to avoid paying tax?”
Harris: “I will ask for the HSE or the Department to respond to the Deputy in writing on this matter in the coming days.
“I want to be clear that nobody is meant to be profiteering as a result of this. The whole purpose here is to ensure that nobody can make a profit and we pay solely according to the cost-only open-book model.
“We were in a very lucky position to be able to acquire the use of these facilities. Thank God we have not needed to use their ICU capacities yet. The HSE will respond directly to the Deputy in the coming days.”
Transcript via Oireachtas.ie