Thursday 27 October 2016

'Politics and ideology have got in the way of good healthcare'

The Ferrari-racing fan Michael Cullen is enjoying life in the driving seat at the Beacon Hospital - and argues that mixing the best private care with a public system is the right track, says Colm Kelpie

Published 24/09/2015 | 02:30

‘I don’t care whether it’s a public patient or a private patient. It’s a nonsense really,’ says Michael Cullen, pictured outside the Beacon Hospital in south Dublin. Photo: Frank McGrath
‘I don’t care whether it’s a public patient or a private patient. It’s a nonsense really,’ says Michael Cullen, pictured outside the Beacon Hospital in south Dublin. Photo: Frank McGrath

Not being a fan of the sport myself, I'm not sure what a race car driver looks like. But I wouldn't have pegged Michael Cullen, the chief executive and co-founder of the Beacon Hospital, for one.

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His office in Sandyford in Dublin has an impressive display of model Formula One-style racing cars, along with two helmets.

It seems he's quite a deft hand behind the wheel, having raced with Ferrari around Europe up to 2008, and was the European pro-am champion of the European Ferrari challenge in 2005 and 2007.

But while you might meet him decked out in racing overalls, the one thing you won't see Cullen wearing is medical scrubs.

With a commercial rather than medical background, Cullen is the business mind behind the Beacon, while his long term friend, Prof Mark Redmond, is the medical brains.

Cullen says the idea behind the hospital came from the fact that Redmond, who had returned to Ireland from the US in 2000, was, just a few years later, fed up and contemplating returning to America because of frustration with the health service here.

"I got into this because Mark was going to head back to the States because he was frustrated with the lack of operating time and I thought this would be crazy," Cullen says.

"He was the head of heart surgery in Johns Hopkins [University] in Baltimore and he had come back home. I said to Mark, 'if you had your Hopkins facility in Ireland, would it work'? And he passionately believed it would work, so I said we'd build you a hospital. We got the funding, secured the planning permission and we built it in three years and four months."

The Beacon opened as a private hospital in 2006 and is one of the most advanced in Europe, with more than 800 consultants, nurses and healthcare staff. It treated around 100,000 patients last year.

It doesn't come cheap. The cost of a bed per night is estimated at around €1,000, and the A&E charge is €150, capped at €480 for outpatients. The public A&E fee is €110.

The hospital's had its ups and downs in recent years. In April last year, it was announced that businessman Denis O'Brien was taking the bulk of it over after US-based hospital operator UPMC Ireland said it was selling up and relinquishing all management responsibilities at the south Dublin facility.

Ulster Bank sold loans linked to the Beacon to O'Brien, and a new board was appointed later in the year to position the business for expansion in the private medical market nationally. Former AIB managing director Colm Doherty was appointed non-executive chairman. The hospital has seen a number of new developments Cullen is keen to emphasise, including extended opening hours for its A&E department, the establishment of a strategic partnership with UCD which has seen Beacon become Ireland's first private teaching hospital and the unveiling of plans for the hospital to become paperless by the end of 2016. Cullen keenly points out that amid it all, patient well-being is the priority.

I suggest those opposed to the privatisation of healthcare may disagree, and the fact that I'm interviewing him for the business pages reflects the fact that Beacon is first and foremost a business. And in business, profit, and the making of money, trumps all else.

Cullen has no time for this argument. "It's a very unsophisticated, immature argument put out by people who don't know any better," he says.

"This hospital will be around here in 70 years time, long after myself, or the shareholders, or the management team. What we have to do is invest, and reinvest in order to be sustainable. If we were profit stripping, we would end up in a downward spiral, where lack of investment would rank us uncompetitive. Our doctors and our staff would go.

"We have to make money, because we are a business. We have to make money in order to be able to reinvest. We would hope and aspire to make a return on capital, but having said that, everything we're going to be making for the next number of years, is going to be reinvested, because we have suffered from a lack of investment."

Cullen isn't interested in a debate that pitches the public and private health systems against each other. For him, the two should be working in tandem, with the public health services tapping into the private sector for procedures that the latter is better equipped to do efficiently, and cost effectively. This, he argues, is how best to ease the pressure on public hospitals.

"The National Treatment Purchase Fund (NTPF) did just that. Various hospitals, both public and private, had arguments about it. People who were more pro-public didn't like seeing the investment going away from the public hospitals, but where is best for the patient? A lot of the private hospitals are better geared up to do these planned elective procedures, leaving the resources within the public system there to deal with what they're best able to do," he says.

"Does that mean you're diverting funds away from the public hospitals to the private hospitals? Yes, but so what? We're a big employer anyway and where we can offer value for money, and, most importantly, offer a high quality clinical service to our patients, then it's appropriate."

The hospital points out that its services are covered on over 90pc of VHI Plans and all standard policies with Aviva, Laya and Glo. The Beacon, Cullen argues, wasn't built for an "insured elite" but to cater for whoever needed it. And ideology doesn't come in to it, he adds. "By all means have a strong public sector and a strong public hospital network in order to treat those that aren't insured and those other patients, private patients, who would just be best treated in a public hospital for the particular ailment that they have. I don't think there is a discrepancy or anything wrong with that. I think the private and the public system can and should work very well together. I wouldn't like to see a fully public-only system, just as much as I wouldn't like to see a fully-only private system." Does he look to a model internationally that he believes Ireland should emulate?

"There are bits and pieces of every system that I think are great, but there is no one system that people would admit that's exactly what we want. I think we have a system that is by no means perfect, but it's served the country quite well," he says.

"I think politics and ideology have got in the way of good healthcare, and that combined with a lack of investment, has led to many of the issues that the Irish healthcare system faces."

Cullen says he and the board are focused on ensuring the hospital doesn't suffer the problem some believe bedevils the public system: a lack of investment. They want to position the hospital for the future, he says. They recruit consultants either through referrals or headhunting those who work abroad and who may wish to return home. As well as the teaching tie-up with UCD, they have held recruitment days for nurses in the UK.

"What we find with a lot of the nurses working here, they find the conditions superb and careers and pathways are really well catered for," he says.

There's clearly demand for the Beacon's services. Earnings rose more than three-fold last year to €7.2m. Turnover at Beacon Medical Group Sandyford rose by 10pc to €82.2m in the year to the end of June 2014. Cullen forecasts EBITDA (earnings before interest, taxes, depreciation and amortisation) at the hospital of €7m to €9m this year, growing to €15m in the next three years.

"We're probably the most financially strong and secure hospital in the country, if not the UK and Ireland," he says. "We're debt free, we're making money. We're 30pc up on last year. Our losses were left behind with the previous operator, the University of Pittsburgh. We've been able to start afresh."

I point out that the problems in the public sector may be to his advantage. Those who can afford it, will avail of Beacon's services. It's not as simple as that, he suggests, reverting to his argument about a greater need for public and private collaboration.

"Ideology just doesn't come into it. I don't care whether it's a public patient or a private patient. It's a nonsense really. As long as we can offer the service competitively, on a level playing field and our staff can do what they're best trained to do," he says. "I think there's an absolute need for a good properly resourced public system that has proper facilities, with properly reimbursed staff, both doctors and nurses. And I think with 300 consultant posts vacant, we have a problem there.

"What we as a country need to do is have a mature conversation about what is best for the patients and I would argue that a mixed public private system... is the right way. I would like to be able to offer our services to everybody."

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