The Irish Nurses and Midwives' Organisation has told the Joint Oireachtas Committee on Health and Children that Mount Carmel Hospital in Dublin should be reopened to relieve overcrowding and pressures at public hospitals in Dublin.
Industrial Relations Officer Philip McAnenly said there had been a misconception that Mount Carmel was a maternity hospital.
He said that of the 130 beds, just 25 beds were for maternity services.
Mr McAnenly said that the hospital conducted general surgery, orthopaedics, ear, nose and throat and other procedures.
1,200 patients would go onto public hospital waiting lists as a result of the closure, he said.
He told the committee that the National Asset Management Agency had rejected a recent bid for the facility, which lost €1m in 2013.
McAnenly told the committee he understood there had been a bid for Mount Carmel of €14m, with €10m going to creditors including the Revenue Commissioners and €4m to NAMA.
He said it would have cost €2m to continue the operation of the hospital but the bid was rejected by NAMA.
Minister for Health James Reilly told the Committee that a State purchase of Mount Carmel as a going concern was never a viable option.
He said the purchase of a stand-alone, low-volume maternity hospital would be contrary to Government policy, which is for co-location and tri-location.
The minister said there may be a use of the hospital as a step-down facility, or for short term care for older people, but it could not be bought by the State as a going concern.
Dr Reilly said that with its closure, the HSE stepped in quickly to ensure a seamless transfer of patients to other hospitals where required.
NAMA declined to attend today's committee hearing but provided some documentation.
Liquidators were appointed to the hospital last month, following an application by NAMA.
Over 380 staff were made redundant when the hospital closed.
Last month, NAMA said the facility had been incurring significant losses since it acquired its loans in 2010.
Speculation over North/West maternity services
The West/North West Hospitals Group has said that speculation on the future of maternity services in the area is unhelpful and potentially upsetting for patients and staff.
Opposition politicians have called for Government clarification amid concerns that services could be removed in Sligo, Mayo and Roscommon.
Fianna Fáil said if reports are accurate, maternity services in the region face a major downgrade with only services at Letterkenny and Galway being retained.
Speaking in the Dáil this afternoon, Mr Reilly said recent reports on the future of maternity services in some hospitals in the west and northwest are purely speculative and as such unhelpful.
He said he regretted that any upset had been caused, but said while maternity services in those regions are under review, no decisions have been taken.
He said the review arose out of a HIQA report into the care of Savita Halappanaver and was in the very early stages.