The Secretary General of the Department of Health, Jim Breslin, has told the Dáil Special Committee on Covid-19 Response that if another surge of Covid-19 comes they will be able to take on 100% capacity in private hospitals again.

Mr Breslin said there will be a stream of public funds and private health insurance money will also come into play.

However, he said there will be the protection that if there is a surge, they will be able to take over 100% capacity again.

Mr Breslin said that the arrangement with private hospitals was developed in very quick order in exceptional circumstances.

He said it met its urgent objective of ensuring additional capacity was available in the event of the public system being overwhelmed.

Mr Breslin told politicians that it had supported the maintenance of urgent critical care, such as cancer services.

He warned that the public system faces ongoing challenges as it resumes operations in the context of the ongoing impact of Covid-19.

The Irish Hospital Consultants Association said that the private hospital agreement, which is costing around €115m per month, represents very poor value for money from patient care and taxpayer perspectives.

In his opening statement to the committee, Martin Varley, Secretary General of the IHCA, said there has been a "very low" private hospital bed capacity occupancy at around one third on average.

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The State's arrangement with private hospitals is due to conclude at the end of the month, following a Cabinet decision last week, but the hearing has shown the merits of renting 19 private hospitals is still very much a live issue.

Mr Varley said the private hospital contract is prohibiting the provision of urgent care required by patients with non-Covid illnesses.

He said this is leading to the accumulation on waiting lists of a large number of patients who require urgent care.

Mr Varley warned there is now the additional risk that these patients will deteriorate clinically and will increasingly evolve into emergency cases if they are not treated without delay.

He called for the contract with private hospitals to be brought to an end and the savings achieved utilised to put increased capacity in place for public hospitals.

Fine Gael's Fergus O'Dowd said the actions that were taken were appropriate and were fit for purpose if the worst had ever happened.

He said he supported all the actions that the HSE and the Department of Health did take.

Fianna Fáil's health spokesperson, Stephen Donnelly, wanted to know why private patients could not continue to be paid for by the insurance companies.

Mr Breslin said the rationale of the arrangement was for a single-tier service, everybody in the pandemic would be treated based on clinical need and there would not be two streams of income going into the private hospitals.

Deputy Donnelly asked again why the decision was made.

Mr Breslin said there were two reasons, the principal of the matter, in that "if we faced a surge it should be public and single tier and also practically nobody knew what it would look like during the month of April" and the cost only reimbursement model was put in place for those reasons.

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Earlier, Irish Medical Organisation CEO Susan Clyne has told the committee that it is untenable to continue with historic deficits in manpower and bed capacity in the context of increasing waiting lists.

She said there is a need for the urgent assessment of current capacity and how that capacity will be affected with new social distancing arrangements and infection control guidelines.

Ms Clyne called for immediate investment in building works for the health service - including in temporary builds and long-term projects such as stand-alone public hospitals for elective care and she said there must be immediate investment to recruit and retain doctors to work in the health service.

Ms Clyne said there are 570,000 people waiting for an outpatient appointment and another 230,000 waiting for an inpatient of day-case procedure.

Committee member and Sinn Féin health spokesperson Louise O'Reilly said there was a very real and pressing need for additional capacity to be sought.

She asked if the private hospitals would have seen a downturn in attendances due to Covid-19 in any event.

She said the evidence suggests that people were staying away from hospitals.

Responding, Mr Varley said the IHCA would regard the contract's value for money as "poor" with the passage of time.

However, he said given what was occurring in Spain and Italy, extra capacity had to be brought on board and he said IHCA members were fully committed to that.

Mr Varley said with the passage of time we can see now that we did not need the capacity.

Answering a query from Fine Gael's Jennifer Carroll MacNeill, Mr Varley said it was a "big failure" there was not engagement between the three organisations; the HSE management, private hospitals' associations and private practice consultants before the contract was signed.

He said going forward "we don't need capacity to be 'under utilised' as we have seen in the last three months".

Additional reporting: Fergal Bowers, Paul Cunningham