The cost of removing private medical practice from public hospitals would lead to higher taxes but lower health insurance premiums, according to the chairman of the expert group that examined this issue for the Government.

Dr Donal de Buitléir is expected to tell the Oireachtas health committee on Wednesday that it is unfair that those with private health insurance or who can pay out of pocket are able to access services in public hospitals quicker than those who do not have private health insurance or who cannot afford to pay.

Dr de Buitléir said in an opening statement to the committee that almost 30per cent of total hospital activity was funded privately – “a situation comparable only to the US”.

He said his group estimated that the cost of removing private medicine from public hospitals would, at the end of a ten-year implementation period, be approximately € 650 million per annum.

“The main element of this is the private income of hospitals (now just over €500 million) paid mainly by insurers. This income is declining in any event due to the campaign by insurers to inform patients that they gain no advantage from using their insurance when admitted via the emergency department of a public hospital. While the loss of this income will result in a cost to the Exchequer, people are already paying for this in the form of higher insurance premia. The loss of this income will result in higher taxes but lower insurance premia. Even if there is no change in the existing system, this source of income will decline.”

He said it would be “very risky to rely on this income continuing into the future”.

He said it was important to note that €650 million is the annual cost which arises after all private activity is removed.

“In the initial years of implementation, the costs will actually be quite modest, primarily arising in relation to the additional expenditure on consultant pay.”

The expert group recommended that all new consultant appointments should be to a “Sláintecare” contract which would allow them to conduct only public activity in public hospitals.

It proposed that pay cuts imposed for medical specialists appointed after October 2012 should be reversed for those appointed to the Sláintecare contract who would have a starting salary of €182,000.

It proposed that existing consultants should be offered a “contract change payment” to move to the new Sláintecare” contract.

It suggested a special derogation from pay service caps be put in place to facilitate recruitment to highly specialised posts in a very limited number of cases.

Dr de Buitléir forecast that the vast majority of patients being treated privately in public hospitals would in future become public patients because either they were admitted as emergencies or required complex care, multidisciplinary or maternity services which were not available within easy reach in the private sector.