Mary Harney for EU Commission - No Thank You Very Much

tonys wrote:

Aragon wrote:

Zhou_Enlai wrote:

tonys wrote:

Aragon wrote:

tonys wrote:

cactus flower wrote:

http://www.independent.ie/unsorted/features/healthcare-the-new-drug-for-investors-121985.html

The idea that this was not intended to be another gravy train for developers and wealthy businessment friends of government

There is nothing in that article to substantiate your claim. It is hardly surprising that when the Government looks to the private sector to spend millions in order to save the public purse, it’s wealthy individuals who step forward with the necessary.

But Tony, don't you get it? The private sector does not spend millions! The government gives them everything they need and, once they have had that, they pull out and/or renege on promises made.

That’s just nonsense Aragon, I don’t care if it’s Stalin’s red hordes that build the hospitals & run them for free by threatening the consultants with a gulag holiday, so long as it works & gives us what we want. I just want the services we need, as soon as possible and at the least cost to the taxpayer, I don’t have any ideological hang ups about how that happens, that’s yours & CF’s job.

Aragon - please identify one person and what they "got" from the Government? If there is so much free loot why does it look like these projects won't go ahead?

If they are not going ahead it will be because even Harney will be having the jitters about continuing this gravy train policy in all the current dire circumstances. People are starting to ask 'where is the value for money in all of this'? She cannot answer that question positively.

Suggest you look at Michael Moore's 'Sicko' - even in Cuba they have a vastly superior health service than we do here - or indeed than in the United States. Despite massive privations as a consequence of the vicious US embargo on Cuba, its health service is still performing better.

]
Anyone can run a health service with doctors @ a Dollar a day, even Cuba.
Com'on now Aragon, you've got to be able to do better than Michael Moore & Fidel.

Why? They are infinitely better at running a health service than Mary and Fianna Fail - obviously you havent studied the facts.

tonys wrote:

cactus flower wrote:

tonys wrote:

cactus flower wrote:

Just remind me tonys, what is the motivation for private investment in the health sector?

To make money

And I’ll remind you how privately run business does that as well,

By providing a (better) service people want, where they want it and at a better price than its competitors.

If it doesn’t do the above, it doesn’t make any money & goes out of business

Like the M50 Toll?

People like to forget, when it suits them, that the M50 Bridge was built at no cost to us, at a time when the only other way we could have paid for it was to borrow when we were already borrowing more than was good for us.

It’s so unfair, isn’t it, that the very people who have to make decisions are the only people who don’t have a crystal ball and on top of that, years later, we make them listen to the hindsighters, who, like teenagers everywhere, knew everything there was to know at the time.

There's nothing "hindsight" about having pointed out what a regressive and damaging scheme hospital co-location is, over the last couple of years, well before it was committed to. Learning lessons from the past is not hindsight. Refusing to learn them is deliberate blindness, agenda driven.

"The very people who have to make the decisions are the only people who don't have a crystal ball" - if you are making the point that everyone else saw they were over-reliant on construction and capital expenditure, and Government didn't, I wouldn't argue with that.

cactus flower wrote:

Zhou_Enlai wrote:

cactus flower wrote:

Everyone got too greedy. None of this takes from the fact that Co-location and other forms of state aided private medicine are a gift to the rich at the expense of the poor. Also, all the evidence is that private medicine is far, far more costly to provide than public.

Who has been gifted what?

Tax "incentives" are a gift. Furthermore, there is not an open market, and the owners of these hospitals are proposed to be sent a steady stream of "public" customers. M50 Toll.

I don't consider tax incentives to be a gift. You are encouraging somebody to invest by taking less of their money.

The M50 toll was a bad deal but again it wasn't a gift. There were conditions and performance criteria and a mechanism for taking it back. It was a bad deal but not a gift.

Zhou_Enlai wrote:

cactus flower wrote:

Zhou_Enlai wrote:

cactus flower wrote:

Everyone got too greedy. None of this takes from the fact that Co-location and other forms of state aided private medicine are a gift to the rich at the expense of the poor. Also, all the evidence is that private medicine is far, far more costly to provide than public.

Who has been gifted what?

Tax "incentives" are a gift. Furthermore, there is not an open market, and the owners of these hospitals are proposed to be sent a steady stream of "public" customers. M50 Toll.

I don't consider tax incentives to be a gift. You are encouraging somebody to invest by taking less of their money.

The M50 toll was a bad deal but again it wasn't a gift. There were conditions and performance criteria and a mechanism for taking it back. It was a bad deal but not a gift.

A little more here on the financial machinery that makes the co-location arrangement potentially highly lucrative for a small number of very wealthy individuals:

Quote :

Critics say it is a major step in the direction of the American health system which is only possible because of the generous tax breaks afforded to the private sector.

Irrespective of the wider debate about the ideological and practical issues involved, the legislation introduced by the then Minister for Finance Charlie McCreevy which grants the tax breaks is incredibly generous.

The use of special tax incentives and capital allowances is not new. Avery strong argument could be made which says they are absolutely necessary in relation to building private hospitals. But clarification on exactly how the tax break works shows just how generous it is.

A consortium forms a company, let’s say, called Company A. It raises €100 million in equity from tax investors. It then borrows another €400 million from the bank on the back of that. Company A borrows the €400 million, not the tax investors.

Company A builds a private hospital for €500 million. Then the entire €500 million in capital allowances goes to the tax investors over a seven-year period. In other words they can offset €500 million in other rental income over seven years, which would reduce their tax bill by around €210 million (assuming tax at 42 per cent).

The real beauty of the scheme is that an investor could put in €100,000 in equity, but in reality he has borrowed all of that. He would then receive tax allowances on the interest on his €100,000 loan, plus the allowance available to him from the several hundred thousand borrowed by Company A on the back of his €100,000.

The point is best illustrated by the investment prospectus for the Beacon Hospital, which raised €42 million in equity from tax investors in 2005 through Goodbody Stockbrokers.

The promoters raised a total of €165 million for the hospital, which was made up of €42 million in tax investors’ equity, €107 million in bank borrowings, which is non-recourse to the investors, and a further €16 million in loans from the promoters. [b]The prospectus shows that a tax investor who put in €75,000 in equity would benefit from €293,000 in capital allowances over seven years, which would be used to offset their tax bill on any other Irish rental income they have.[/b]
The investor who even borrowed the €75,000 would reduce his tax bill by €141,000 over seven years, without having to actually put in any of his own cash. The annual return on the investment was 28.9 per cent. The promoters are taking a risk, but in the end they will own the hospital.

The investors benefit from capital allowances based on borrowings they have not taken out, but have been taken by the company.

Beacon is planning another hospital in Sandyford, Dublin, plus it has been awarded the contract for three co-location facilities. It is in the running for a fourth in Tallaght.

It has achieved this because of its track record in putting together the highly successful Beacon Hospital. Building these other four or possibly five hospitals will cost between €800 million and €1 billion. Based on the ratio of equity to borrowing for the first one, Goodbody’s could be helping Beacon raise around €250 million in equity over the next few years for the projects. It will be a no-brainer for investors. They will sign up to annual returns of around 28 per cent, without taking any risk. In the current climate of a property slump and a highly volatile stock market, investors will be queuing out the door to avail of these extraordinary tax breaks, backed by a solid promoter with a successful track record.

Irrespective of whether the co-location project will solve the problems of the health service or not, there is one enormous flaw in the way these tax breaks are constructed. They are of absolutely no benefit to anyone who does not have a very sizeable rental income from property. In other words, they are not available to the average Joe.

They are not even available to the reasonably well-off investor. These are only of real benefit to the extremely well off. If it solves the health service problem it may even be worth it. But if it doesn’t, it will have been one hell of a state subsidised bonanza.

http://archives.tcm.ie/businesspost/2008/01/20/story29689.asp

It looks like a gift to me.

And are the public going to benefit from this arrangement?

Quote :

Well, research from the US shows consistently that for-profit hospitals provide lower quality care and have a higher mortality than not-for-profit hospitals. The research also shows that they are not as financially efficient as not--for-profit hospitals. They may be more efficient at making profits but clearly are not efficient at minimising costs.

Money, and not healthcare, is the primary mission with this type of hospital. For-profit hospitals tend to provide unnecessary healthcare services and also perform more investigations than are really necessary for patient care, as Australian research has nicely shown.

Private patients in private hospitals in Australia had a rate of coronary angiography roughly three times greater than the public insured patient in public hospitals or indeed, than private patients in public hospitals in Australia. What all of this means is that the overall cost of healthcare will rise and us taxpayers will pay for it either through private insurance premiums which will rise substantially, or you will have to pay upfront for more and more items of healthcare that insurance companies will not cover. This is termed cost-sharing. Equity will be further undermined.

What is equity? This is the concept of patients being treated on the basis of need and not on how much you have in your pocket. We already have the latter system in many instances, and providing more private beds in private co-located hospitals will aggravate this trend. It will be great for private patients and those who have private health insurance. On the grounds of quality, there is a distinct possibility that the further increase in for-profit hospitals will undermine the country's so called healthcare principles.

*Dr John Barton is a consultant cardiologist at Portiuncula Hospital, Ballinasloe, and ran as a Fine Gael candidate in Galway East in the recent general election.

At the end of the day, if this goes ahead, we will pay more for a worse system. The beneficiaries wil be a handful of already very wealthy individuals.

This SBP article says that Harney's promised 1,000 beds by 2011 will not happen. The whole planning and negotiation process is dragging on for years and now of course there are bank funding problems.

http://archives.tcm.ie/businesspost/2008/11/09/story37419.asp

In my personal opinion, an ideologically driven mess.


http://archives.tcm.ie/businesspost/2008/11/09/story37419.asp

cactus flower wrote:

Zhou_Enlai wrote:

cactus flower wrote:

Zhou_Enlai wrote:

cactus flower wrote:

Everyone got too greedy. None of this takes from the fact that Co-location and other forms of state aided private medicine are a gift to the rich at the expense of the poor. Also, all the evidence is that private medicine is far, far more costly to provide than public.

Who has been gifted what?

Tax "incentives" are a gift. Furthermore, there is not an open market, and the owners of these hospitals are proposed to be sent a steady stream of "public" customers. M50 Toll.

I don't consider tax incentives to be a gift. You are encouraging somebody to invest by taking less of their money.

The M50 toll was a bad deal but again it wasn't a gift. There were conditions and performance criteria and a mechanism for taking it back. It was a bad deal but not a gift.

A little more here on the financial machinery that makes the co-location arrangement potentially highly lucrative for a small number of very wealthy individuals:

Quote :

Critics say it is a major step in the direction of the American health system which is only possible because of the generous tax breaks afforded to the private sector.

Irrespective of the wider debate about the ideological and practical issues involved, the legislation introduced by the then Minister for Finance Charlie McCreevy which grants the tax breaks is incredibly generous.

The use of special tax incentives and capital allowances is not new. Avery strong argument could be made which says they are absolutely necessary in relation to building private hospitals. But clarification on exactly how the tax break works shows just how generous it is.

A consortium forms a company, let’s say, called Company A. It raises €100 million in equity from tax investors. It then borrows another €400 million from the bank on the back of that. Company A borrows the €400 million, not the tax investors.

Company A builds a private hospital for €500 million. Then the entire €500 million in capital allowances goes to the tax investors over a seven-year period. In other words they can offset €500 million in other rental income over seven years, which would reduce their tax bill by around €210 million (assuming tax at 42 per cent).

The real beauty of the scheme is that an investor could put in €100,000 in equity, but in reality he has borrowed all of that. He would then receive tax allowances on the interest on his €100,000 loan, plus the allowance available to him from the several hundred thousand borrowed by Company A on the back of his €100,000.

The point is best illustrated by the investment prospectus for the Beacon Hospital, which raised €42 million in equity from tax investors in 2005 through Goodbody Stockbrokers.

The promoters raised a total of €165 million for the hospital, which was made up of €42 million in tax investors’ equity, €107 million in bank borrowings, which is non-recourse to the investors, and a further €16 million in loans from the promoters. [b]The prospectus shows that a tax investor who put in €75,000 in equity would benefit from €293,000 in capital allowances over seven years, which would be used to offset their tax bill on any other Irish rental income they have.[/b]
The investor who even borrowed the €75,000 would reduce his tax bill by €141,000 over seven years, without having to actually put in any of his own cash. The annual return on the investment was 28.9 per cent. The promoters are taking a risk, but in the end they will own the hospital.

The investors benefit from capital allowances based on borrowings they have not taken out, but have been taken by the company.

Beacon is planning another hospital in Sandyford, Dublin, plus it has been awarded the contract for three co-location facilities. It is in the running for a fourth in Tallaght.

It has achieved this because of its track record in putting together the highly successful Beacon Hospital. Building these other four or possibly five hospitals will cost between €800 million and €1 billion. Based on the ratio of equity to borrowing for the first one, Goodbody’s could be helping Beacon raise around €250 million in equity over the next few years for the projects. It will be a no-brainer for investors. They will sign up to annual returns of around 28 per cent, without taking any risk. In the current climate of a property slump and a highly volatile stock market, investors will be queuing out the door to avail of these extraordinary tax breaks, backed by a solid promoter with a successful track record.

Irrespective of whether the co-location project will solve the problems of the health service or not, there is one enormous flaw in the way these tax breaks are constructed. They are of absolutely no benefit to anyone who does not have a very sizeable rental income from property. In other words, they are not available to the average Joe.

They are not even available to the reasonably well-off investor. These are only of real benefit to the extremely well off. If it solves the health service problem it may even be worth it. But if it doesn’t, it will have been one hell of a state subsidised bonanza.

http://archives.tcm.ie/businesspost/2008/01/20/story29689.asp

It looks like a gift to me..

A piece of absolute nonsense above.
No mention of the “loans” having to be repaid with interest, a wee bit of a hole in the financial analysis that.

cactus flower wrote:

And are the public going to benefit from this arrangement?

Quote :

Well, research from the US shows consistently that for-profit hospitals provide lower quality care and have a higher mortality than not-for-profit hospitals. The research also shows that they are not as financially efficient as not--for-profit hospitals. They may be more efficient at making profits but clearly are not efficient at minimising costs.

Money, and not healthcare, is the primary mission with this type of hospital. For-profit hospitals tend to provide unnecessary healthcare services and also perform more investigations than are really necessary for patient care, as Australian research has nicely shown.

Private patients in private hospitals in Australia had a rate of coronary angiography roughly three times greater than the public insured patient in public hospitals or indeed, than private patients in public hospitals in Australia. What all of this means is that the overall cost of healthcare will rise and us taxpayers will pay for it either through private insurance premiums which will rise substantially, or you will have to pay upfront for more and more items of healthcare that insurance companies will not cover. This is termed cost-sharing. Equity will be further undermined.

What is equity? This is the concept of patients being treated on the basis of need and not on how much you have in your pocket. We already have the latter system in many instances, and providing more private beds in private co-located hospitals will aggravate this trend. It will be great for private patients and those who have private health insurance. On the grounds of quality, there is a distinct possibility that the further increase in for-profit hospitals will undermine the country's so called healthcare principles.

*Dr John Barton is a consultant cardiologist at Portiuncula Hospital, Ballinasloe, and ran as a Fine Gael candidate in Galway East in the recent general election.

At the end of the day, if this goes ahead, we will pay more for a worse system. The beneficiaries wil be a handful of already very wealthy individuals.

This SBP article says that Harney's promised 1,000 beds by 2011 will not happen. The whole planning and negotiation process is dragging on for years and now of course there are bank funding problems.

In my personal opinion, an ideologically driven mess.

And a piece of wilful nonsense here.
If, as the writer claims, private health insurance will go up as a result of these hospitals doing all sorts of unnecessary tests, then at least with these hospitals in place, people will have a real choice as to whether they continue with their private health insurance or depend on the public system, which by then will have an extra 20% of its own beds exclusively available to it + 20% of the beds in the private hospitals exclusively available to the public system, strangely not mentioned in the above article.

The writer of this reply did not stand for FG (or anyone else) in the last general election.

Quote :

The real beauty of the scheme is that an investor could put in €100,000 in equity, but in reality he has borrowed all of that. He would then receive tax allowances on the interest on his €100,000 loan, plus the allowance available to him from the several hundred thousand borrowed by Company A on the back of his €100,000.

DId you read this tonys?

There are innumerable intermational comparative studies that show public systems to be of lower cost and higher efficiency than private systems.

tonys wrote:

cactus flower wrote:

Quote :

The real beauty of the scheme is that an investor could put in €100,000 in equity, but in reality he has borrowed all of that. He would then receive tax allowances on the interest on his €100,000 loan, plus the allowance available to him from the several hundred thousand borrowed by Company A on the back of his €100,000.

DId you read this tonys?
I did, the article shows no calculation or cost for the repayment of the “loans”, making a complete nonsense of its main point.

There are innumerable intermational comparative studies that show public systems to be of lower cost and higher efficiency than private systems.

If that were true why for example do the French, who are otherwise practically communist, depend on the private sector to provide 25% of treatments in their health system?

You might remember this post from Pax, which shows that this does not correctly represent the French system.


https://machinenation.forumakers.com/national-politics-f32/the-fallacy-of-private-health-care-efficiency-t541-200.htm#16951

cactus flower wrote:

tonys wrote:

cactus flower wrote:

Quote :

The real beauty of the scheme is that an investor could put in €100,000 in equity, but in reality he has borrowed all of that. He would then receive tax allowances on the interest on his €100,000 loan, plus the allowance available to him from the several hundred thousand borrowed by Company A on the back of his €100,000.

DId you read this tonys?
I did, the article shows no calculation or cost for the repayment of the “loans”, making a complete nonsense of its main point.

There are innumerable intermational comparative studies that show public systems to be of lower cost and higher efficiency than private systems.

If that were true why for example do the French, who are otherwise practically communist, depend on the private sector to provide 25% of treatments in their health system?

You might remember this post from Pax, which shows that this does not correctly represent the French system.


https://machinenation.forumakers.com/national-politics-f32/the-fallacy-of-private-health-care-efficiency-t541-200.htm#16951

That post by pax doesn’t address the 25% private provision of French health care at all and it is 25% as reported by the French government themselves.

The point that is addressed by pax is the fact that the public purse in France only covers 80% of any health treatment, whether provided by the public or private service, leaving the balance of 20% to be covered by private health insurance or by the patients themselves, a fact not usually referenced when we are being told how wonderful the French system is.

It isn't clear to me CF. Just because somebody can make a financial arrangement which allows tax incentives to be moved doesn't mean it is incredibly generous over all. The people who are borrowing the €800m have to forego the tax allowance as it has been given to others.

What makes the deal attractive is not the tax allowance per se but rather the non-recourse loan granted by the bank for the construction of the hospital. Whether such finance will be available again is another matter altogether.

Also, the hospital in Sandyford was built - that is a result. How long it keeps going is another matter.

A point you are all missing is that co-location hospitals are possibly pie-in-the-sky with the current illiquidity in the financial system. Perhaps even more generous tax-breaks will be required?

Also, while public hospitals may be better run, it is hard to imagine that the state could instantly develop the expertise to design and build them efficiently. If they had that expertise maybe they could do it but I suspect that they don't. Getting that expertise would be just as painful as getting expertise in road building and IT projects has been (and continues to be). We can't afford that pain.

tonys - its you who brought up the French system - I'm not sure why. The thread I linked to above provides plenty of information to substantiate the greater health and economic efficiency of a public system.

Zhou, we are not going to see the tax allowance the same way - its a matter of viewpoint I think, rather than a dispute over facts. In my mind, people who owe tax are let off paying it and instead are able to put the money into aquiring an asset. In many cases - holiday homes, over supply of hotel rooms, the development is actually been environmentall, and economically damaging. The tax take is reduced and already wealthy individuals benefit - regressive taxation I think its called.

The private hospitals are unlicensed. Hospital design is a hghly specialised area dealt with by a small number of large firms across Europe. The same designers would be likely to work on a public as a private hospital.

Not missing the point at all about the likely collapse of many of these projects. I've posted in this thread about it several times including my previous post.
http://archives.tcm.ie/businesspost/2008/11/09/story37419.asp

I was told that an incentivised hotel in Sandyford is being lived in apartment style. I suppose there would be a tax claw back in that situation..?

The collapse of the co-location schemes would at this stage inevitably mean serious future bed shortages as they have been relied on to provide 1,000 beds by 2011.

This scheme was a "something for nothing" dream turned into a nightmare.

cactus flower wrote:

Zhou, we are not going to see the tax allowance the same way - its a matter of viewpoint I think, rather than a dispute over facts. In my mind, people who owe tax are let off paying it and instead are able to put the money into aquiring an asset.

I think that’s a misunderstanding of the system, as I understand it, this is how it works out;
If for example I earn 243,000 rental income and therefore would be due to pay 100,000 tax on that income, but I have also invested 100,000 in one of these hospitals, this means that,

1. I get to save 41,000 on tax, not 100,000 and I only make that saving over 7 years, not in 1 year. In other words, of the original 100,000 due in tax in year 1 I'd still have to pay 94.000

2. To make that tax saving I have had to invest an extra 100,000, there is a direct tax take on that spend of about 30% in year 1, (VAT, direct construction wages, supplier wages, supplier profits etc.). If you then factor in interest saved by Government over 7 years that 30% then comes up to a value of about 34.5% as against 41% cost over the same 7 years, so a tax cost of only 6.5% to the state.

From the Governments point of view you then factor in the ongoing economic activity generated by the completed investment, employment, tax take on wages, profits etc. Far from being a cost of 6.5% tax not taken in, this ends up being a very good earner for the state, not to mention the huge savings on capital cost the State would otherwise have to make.

Is there no end to the damage the goverment is going to allow her to do? Between this nonsense and Bertie for President, I dont know what the world is coming too.

Some posts here split to new "Bertie for President" thread.

So.. EU Commissioner, did anyone here mention Richard Bruton's name?

Looking back over the thread I see John Bruton's name mentioned by ibis, but not Richard's.
I heard last night from a FF'er that it would be offered to RB in order to silence him. They can handle Kenny but not Richard.
This person also noted that RB has been quiet on the issue of the Anglo 10, perhaps feeling there is nothing to it.

In a similar vein I was told that the galwayman is a persona-non-grata within his party but was not involved in what has been rumoured.

On the first point, I can't see Bruton taking the job myself.

eoinmn wrote:

Looking back over the thread I see John Bruton's name mentioned by ibis, but not Richard's.
I heard last night from a FF'er that it would be offered to RB in order to silence him. They can handle Kenny but not Richard.
This person also noted that RB has been quiet on the issue of the Anglo 10, perhaps feeling there is nothing to it.

In a similar vein I was told that the galwayman is a persona-non-grata within his party but was not involved in what has been rumoured.

On the first point, I can't see Bruton taking the job myself.

He might be silent because until recently he was a shareholder, I think. He certainly had a portfolio of bank shares, that he had declared on the Register in the proper way.

cactus flower wrote:

He might be silent because until recently he was a shareholder, I think. He certainly had a portfolio of bank shares, that he had declared on the Register in the proper way.

Excellent point. I'd completely forgotten that.
What do you make of the idea of Cowen sending Bruton off to Brussells?
My own thinking is the Bruton has a good chance of being Taoiseach and won't walk away from that.