Doctors rake in extra cash for supplying hospital scanners
HIGHLY paid doctors are earning extra income of more than €100,000 a year by hiring out private scanning mach-ines to public hospitals, the Irish Independent has learned.
The consultant radiologists in Cork and Galway, who are on staff salaries averaging €150,000 a year, have set up private companies that provide in-house MRI and CAT scans to the public hospitals where they work.
The doctor-owned scanning services are in operation in Cork University Hospital, the Mercy Hospital, the South Infirmary, Galway University Hospital and Merlin Park Hospital.
An Irish Independent investigation found that the consultants, who are shareholders in these companies, earn fees as high as €125,000 a year from renting out their machines to the hospitals.
Their work contracts do not prevent them from earning income from private ventures.
The machines bought by the radiologists were installed in the hospitals between the mid-1990s and 2007 and are being used on public and fee-paying patients.
The hospitals, some of which have huge waiting lists, have claimed the arrangements are cost-effective.
However, none of the hospitals could provide any cost-benefit reports to back up its claim that the arrangement provided value for money for taxpayers.
The HSE claimed that the capital funding was not available to buy these machines at the time they entered agreements with the consultants for their use.
The Irish Independent investigation reveals how:
•Radiologists at Cork University Hospital formed the company Scancor to provide MRI services to the hospital. It is understood that the 10 directors shared an average of €1m in annual fees in recent years.
•The Mercy Hospital in Cork uses the MRI services of 20/20 Imaging, which has two of its doctors as shareholders and is operated with another company. Its accounts does not disclose company fees.
•The South Infirmary Hospital uses an MRI scanner owned by five of its doctors, who formed a company called Trans-Specialists Ltd to provide the service. Their individual fees ranged from €119,588 to €123,998, according to company filings. l University College Hospital Galway and Merlin Park Hospital use the scanning services of Merlin Park Imaging Centre, one of whose shareholders is Dr David O' Keeffe, a radiologist now in a senior management position over both hospitals.
Dr Simon Blake, who is a shareholder in Trans Specialists, said they decided to buy the MRI scanner in 2001 because there was only one in Cork.
"There was a reluctance in the health service to purchase a scanner. We thought it should be available to more patients," he said.
The doctors purchased the first scanner and installed it in the hospital, where they pay rent, insurance and employ staff.
The company is still paying back the loan it took out to purchase a second scanner in 2007.
Although the some of the companies do not show a profit in their company filings, this has not prevented the doctors who are shareholders from paying themselves large sums.
The fee charged to the hospitals for each scan on a public patient is higher than the sum they receive from health insurers for each private patient.
The hospitals refused to say how much they are paying the companies to provide the service, but confirmed the consultants who own the machines are not involved in referring patients for scans.
All of the hospitals claim they get value for money from the arrangement. However, none was able to provide any financial analysis to show the arrangement was more beneficial than if the hospital had its own machines or outsourced it to independent companies.
Scancor has had the contract with Cork University Hospital since 1994 and was again chosen during another tender in 2005. It ended in December but can be extended for another two years.