National health service should not be guided by profit

Andre Delicata - 17. March. 2018

The Vitals saga poses serious consequences on our healthcare system. It impacts each and every one of us whichever way you slice it. I expressed concern about the move since day one, and now I am not just concerned but very alarmed.

First of all, I have my reservations on whether the arrangement is really a public–private partnership (PPP). It’s a concession to profiteer from our national health service, coupled with a service agreement.

I know of no such model that has worked within the context of a national health service system similar to Malta’s. Moreover, EU experts in the health sector have questioned the wisdom and outcomes of PPPs in the health sector.

Secondly, Vitals is a company that exists to make profits. Once a company’s profits decline, or it wants to increase its profitability, its options are to reduce services, put more pressure on staff (or possibly downsize) and / or ask the government for more money.

The taxpayer gets a bad deal. The patient gets a bad deal. The staff get a bad deal.

The concession was awarded to hidden investors and fronted by a man with a track record of fraud and no experience in the management of hospitals. Entrusting the management of a good chunk of our national health service to Vitals was sheer madness. It was irresponsible.

It was enough to know that the owners of Vitals were hidden behind a complex web of company structures in the British Virgin Islands. The public has a right to know who the government enters into agreements with on national services.

I am not surprised Health Minister Chris Fearne distanced himself from the arrangement (although he endorsed a questionable transfer of Vitals ownership to Steward Healthcare).

The set-up of Vitals was designed to avoid detection and deter any real scrutiny. The hidden parties started setting up the companies based on a secret agreement the government signed with them on 10 October 2014, five months before any call for proposals on the hospitals concession was made.

The following month, the investors signed an agreement among themselves which showed they knew exactly what they were getting, court documents show. A damning due diligence report on Vitals was prepared by a leading consultancy firm. All this is documented, showing taxpayers were the real losers in the Vitals deal.

Vitals was financially unsound from the start, unable to honour its commitments and pay off debts despite receiving some €50 million from taxpayers since 2016.

Vitals was sold to Steward Healthcare but key questions remain that the man at the helm – Armin Ernst – has not answered.

The Health Minister said Steward Healthcare was now “the real deal”. So why did the government enter into an agreement with Vitals, which by its own admission, was not the real deal? How are we supposed to trust the same government that now tells us they got it wrong?

Steward Healthcare is a company that operates several hospitals and nursing homes in the US, where there is no universally free national health service. Healthcare is mainly offered through private insurances that are unafforable to a large part of the population. It is nothing like Malta’s free public healthcare system.

Moreover, Steward Healthcare has just negated on its obligations to a community in the US, selling a public hospital to real estate developers for $12 million, The Times of Malta reported.

No wonder many have serious concerns regarding the management and leadership of key parts of our national health service when left in the hands of people whose interest is profit. Any arrangement of this importance with a private company should be sound, putting taxpayers’ money to best use and ensuring that patients’ interests remain a priority. This cannot be assured in the current scenario.