People & Skills
Procurement Corruption Allegations – Irish Hospitals Accused

A programme on Irish television last week claimed that a number of procurement staff at two hospitals in the country have received gifts from a supplier in return for favourable treatment – both award of contracts and being given commercially sensitive information. But the problem may spread to a wider range of hospitals.

As the Irish Examiner reported:

“Three employees, two from the publicly-funded St Vincent’s University Hospital and one at the private Beacon Hospital, are on paid leave since allegations about their dealings with Eurosurgical medical supplies were revealed in an RTÉ Prime Time investigation.

A whistleblower originally tipped off the authorities, with Irish health minister Leo Varadkar confirming he received information on seven hospitals last year. Those allegations were apparently more serious than those discussed on the TV programme, including a suggestion that bribes included cars and foreign holidays. But after that, an internal audit of the publicly-funded hospitals found no evidence of wrongdoing. The health minister said that would now be looked at again following the programme. (It would be rather embarrassing if those audits themselves were found to be flawed!).

The Garda (police) meanwhile confirmed that they “are and have been carrying out inquiries in relation to procurement practices at Irish hospitals.” However, there is some confusion as St Vincent’s Healthcare Group, which includes a hospital named by the minister as one of those mentioned, said it was not made aware of any issue at the hospital or that there was a Garda inquiry. “Neither the Department of Heath, nor the HSE, nor the Garda Fraud Bureau sought to engage with SVPH, or the wider group, at any stage about this,” it said.

In any case, this is obviously terrible news for Eurosurgical, as all payments to the firm from the Irish health service have been suspended. And this is only a small firm, with 35 staff and annual revenues of a few million Euros. The firm said “Eurosurgical have always behaved ethically and will continue to do so.”

Back to the report in the Examiner:

Among the claims in the Prime Time programme were that Eurosurgical paid for holidays for members of hospital staff who were in charge of purchasing, that Eurosurgical was given details of the prices its competitors were charging, and that the company secured contracts to supply some goods and repair services at prices in excess of what existing suppliers charged.”

Whatever emerges, the case throws up some interesting questions. If it turns out that corruption has taken place at the private hospitals, but not at the state run institutions (as per the audit results), might that be a vindication for EU and national procurement regulations? Of course, regulations cannot stop someone passing on a competitor’s price list to their favoured supplier, for instance. But they do make it more difficult (for instance) for a more expensive bid to win against cheaper offers . Not impossible, because of other evaluation criteria potentially, but certainly more difficult.

Secondly, we wonder if the procurement people accused are members of any procurement Institute. CIPS (the Chartered Institute of Purchasing and Supply ) is pushing for its members to take an “ethics test” as part of their membership. CIPS is also promoting the idea of a “licence to practice”, which seems to have most interest in the public sector within certain countries that have a corruption problem. The idea there is that only people with that licence – a CIPS member for instance – would be “allowed” to buy. But does having a licence, a membership or passing an ethics test really make an individual less likely to behave corruptly? We may find out one day.

Finally, we should be grateful that there is generally more transparency these days. However, in the UK health system, one idea that is being considered is to introduce something along the lines of the Sunshine Act in the USA. This is aimed at medical staff and suppliers, and forces public disclosure of any payments and gifts made to staff by suppliers. In this case, it looks like procurement staff rather medics who are implicated in bad behaviour – but the more we can do to make relationships between suppliers and the buy-side transparent generally, the easier the fight against corruption will be.

Breaking news: Noel Bergin, a supply chain co-ordinator at the Beacon Hospital in Dublin, has handed in his resignation, the hospital confirmed. It comes before an Oireachtas Health Committee hearing into the issues highlighted in the RTÉ Prime Time programme aired last week.