Spike in cost of medical supplies ‘far worse’ than hospital staff know

The spike in the cost of hospital supplies since Vitals Global Healthcare appointed Technoline exclusively is far worse than what doctors and nurses witness, a former employee of one of the largest medical suppliers in Malta told The Shift News.

The increase in prices of hospital equipment is only part of the problem since suppliers make their real money off the provision of maintenance services and consumables for the machinery, he said.

“Very often, it’s not only about the machinery or equipment but also the servicing which would need to be done by the same company that supplied them, as well as consumables required for any equipment,” he said.

Hospital staff who spoke to The Shift News earlier this week following its investigation into VGH showing that taxpayers got a rotten deal to explain what they have been witnessing in the provision of healthcare services under the Public Private Partnership involving VGH.

When line managers were asked to counter sign for delivered equipment they realised that the cost of hospital equipment has skyrocketed with some items invoiced at triple the cost. While welcoming the needed equipment, they said they were shocked.

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When VGH contracted Technoline for all its medical supplies, it forced all other medical suppliers to hospitals to enter their bid through one of their competitors resulting in an extremely lucrative deal for the company.

Now, a former employee of one of the major medical supplies company in Malta has come forward to explain the bigger picture. Having occupied a senior position at a major medical supplies company, he was involved in both private and tender markets at high levels.

“Once you have the machine / equipment in, the hospital would need to use your equipment and your people for servicing and maintenance. In fact, it’s not uncommon to give equipment at an extremely low price, or free at times, to the government because then you can charge whatever you like for the maintenance and the consumables,” he said.

The spike in the cost of hospital equipment was explained by suppliers who spoke to The Shift News as a direct result of the exclusivity given to Technoline soon after it was bought out by one of its managers, Ivan Vassallo.

“When the government forces you into what is clearly an unfair and discriminatory deal, the context changes. You are no longer offering your lowest possible price to the government for a public service. If Technoline is going to make money off the goods you are offering, and it is the only channel through which you can offer that service, then you have to make sure that you survive and that your employees’ salaries can be paid. The only way was to increase our prices,” a supplier said.

VGH was granted a concession to run three public hospitals – St Luke’s, Karin Grech and Gozo hospitals – for up to 99 years in a fixed deal. Investigations by The Shift News have shown the hidden interests behind the Vitals deal, and the links behind suppliers and the registered owners of Vitals, may mean that even though the company may pack up and leave, the lucrative contracts established may position them to earn profits off a deal they never delivered for years to come.

On Tuesday, the Medical Association of Malta held a one-day strike action in protest at the way St Luke’s, Karin Grech and the Gozo General hospitals were being transferred to Steward Healthcare.

Although it agreed in principle on a public-private-partnership for the hospitals, the union said it believed management and leadership should remain in the hands of the government. The government gave its consent to the transfer without giving the association a six-week notice, in breach of their collective agreement, the union said.

The action in support of patient care received full backing by doctors at the hospitals affected by the privatisation, the union said. MAM is calling on the government to retract its consent for the transfer and consult with it first, in line with a collective agreement.

No further industrial action by doctors is expected at least until the beginning of next week, when the union is set to meet the government over the transfer of three State hospitals to Steward Health Care.