Two firms, each having connection to employees at the University Hospital Limerick, were awarded contracts amounting to over €1.5 million without undergoing the standard procedure of competitive procurement. The audit from the Health Service Executive (HSE) also uncovered that another contract, worth close to €400,000, was issued to a company headed by a HSE-worker at a distinct hospital.
On Monday, an internal audit report revealed that in 2023, the University Hospital Limerick made payments totalling €14.2 million to external service providers for the purposes of shortening waiting lists, all conducted without using the conventional procurement process. Moreover, it was confirmed by the management at the Limerick Hospital Group that a devoted procurement function was not in place.
The report detailed that one company received a €714,087 contract while another got a €919,885 contract; both companies had a director who was a staff member of the Limerick hospital at the time of service. However, auditors found no link between the HSE employees and the contract-giving process.
In 2021, HSE adopted a “dynamic purchasing system (DPS)” to carry out insourcing of clinical services, a model widely used by government bodies across the European Union. There were 14 healthcare providers enlisted on this DPS system at the time of the audit, providing medical services based on standard terms. If a hospital receives non-recurring funding, they may hold a reduced-scale competition within the DPS framework, bypassing the traditional tender process.
Despite the routine use of the DPS system by hospitals to insource services, auditors recommended further analysis regarding the legality and personnel implications of private capacity engagements. This advice came in response to the management’s assertion that the HSE consultant and other staff were usually hired by the DPS firms “to provide the service”.
The report revealed that using companies from the DPS framework as standard practice is widely accepted across hospitals, as conveyed to the internal audit. The HSE Mid West confirmed their acceptance of the internal audit report’s conclusions, assuring that they are collaborating with national colleagues to establish an improved procurement support function within HSE Mid West. They aim to ensure total compliance in the future.
Reducing patient waiting times was highlighted as crucial. The audit report also stated that Health Minister Stephen Donnelly had pledged €240 million to the HSE and the National Treatment Purchase Fund with the intent to manage waiting list backlogs. Additionally, last year €99 million was set aside by the HSE for this purpose.
Once approved, hospitals have the option to provide additional services through the recruitment of extra staff or overtime. They could also opt to employ a private provider to undertake the work either at the public hospital (insourcing arrangement) or at their own facility (outsourcing arrangement).
Limerick managers explained to the auditors that the reasons for procuring services were based on patient geographic location, the availability, skills, and capacity of the service providers, and their capability to provide continuous patient care. The hospital’s scheduled care oversight committee is responsible for reviewing all initiatives, according to management.
It was noticed by auditors that among the initiatives selected to mitigate waiting lists at various locations, one out of 12 initiatives at Galway University Hospital and one out of 10 at Tallaght lacked a completed open competitive tender process.