HSE chief executive Bernard Gloster was worried enough to send an email at breakfast time on a Saturday to Robert Watt, the most senior Department of Health official.
At issue were rumblings about large volumes of public money being spent on “insourcing” in public hospitals. Insourcing, a practice aimed at cutting waiting lists, involves the State paying private fees to public healthcare staff for extra work.
On Thursday April 10th, Minister for Health Jennifer Carroll MacNeill called for a formal HSE review of insourcing.
It was just before 9am on the following Saturday when Gloster wrote to Watt saying he was “concerned at some emerging, albeit anecdotal at this point, pieces of information” about insourcing. Gloster said he “may need to take additional steps” to stop or partially stop the practice pending the review.
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Insourcing was an integral part of the Government’s drive to reduce waiting lists, which is a top priority. Any cessation would hinder such efforts, leading to frustration and yet more delay for patients and a risk their conditions would worsen.
The policy facilitated third-party companies in hiring State healthcare staff and public hospital equipment at night or weekends to treat waiting-list patients. Some companies were controlled by medical practitioners on the payroll of the public hospitals to which they provided insourcing, raising questions about potential conflicts of interest and governance.
The money involved was potentially huge. Former minister Stephen Donnelly had increased annual waiting-list spending to more than €400 million.
But anxieties were also emerging. HSE auditors last year noted two companies, which collectively received some €1.5 million from University Hospital Limerick (UHL) under contracts not subject to public tender, were owned or part-owned by UHL staff.
Insourcing was little-known beyond the healthcare world. But it soon became clear that a multimillion-euro private industry had developed within the public hospital system.
Concerns were raised about the children’s hospital group Children’s Health Ireland (CHI) and Beaumont Hospital in Dublin. The National Treatment Purchase Fund (NTPF), which procures care for public patients and sanctions insourcing payments, suspended insourcing payments in each case.
It was not until June that the NTPF made public its pause of funding at an unnamed public hospital on foot of “potential financial irregularities”.
The Irish Times reported the next week that certain Beaumont consultants in rheumatology had written a letter in March to hospital chairwoman Pauline Philip. They said Beaumont had sent a bill to the NTPF for insourcing the treatment of some 1,400 patients seen in routine public clinics. Such clinics were supposed to be outside the scheme.
Neither the NTPF nor Beaumont had much to say about what was going on. But newly-released files show a row was rumbling in the background.
NTPF records, released under the Freedom of Information Act, feature correspondence sent in the spring and summer from Beaumont chief executive Anne Coyle; its chair, Pauline Philip; NTPF chief executive Fiona Brady and NTPF chairman Don Gallagher.
The correspondence began on Friday, April 11th, when Coyle wrote to Brady. This was the day the NTPF cancelled approval for insourcing.
[ CHI board concerned three years ago over insourcing in hospitalsOpens in new window ]
Citing encrypted NTPF rheumatology invoices, Coyle said it had been confirmed that “all of these patients” were seen in a new Wednesday clinic in the Omni shopping centre in nearby Santry as “part of the core working week”.
“This was never additional capacity nor was it a waiting-list initiative,” she said. Beaumont planned a forensic analysis of NTPF work, with an initial focus on rheumatology.
Gallagher wrote on April 30th to Philip in Beaumont saying he had become aware of “potential financial irregularities”, and any review or investigation should be transparent.
“To that end, we request that your board ensures any forthcoming review process is demonstrably independent of any internal interests that may be perceived to affect its objectivity,” he wrote.
Philip replied two weeks later saying Beaumont could not agree to an independent review as it was part of the HSE’s review.
“Your letter refers to potential financial irregularities. No evidence of financial irregularity has come to light, and we reject the inference that the hospital has engaged in such matters absent any evidence,” Philip said.
Eleven days later, Gallagher replied saying Philip’s letter was “clearly at odds” with Coyle’s earlier correspondence. “The positions outlined in each are fundamentally conflicting and such inconsistency requires robust clarification.”
Coyle’s assertion that the Omni clinic was never additional capacity came despite Beaumont “having claimed the funds from the NTPF as being additional activity under insourcing arrangements”, said Gallagher.
Responding on June 12th, Philip did not discuss the alleged inconsistency. Beaumont was satisfied HSE internal auditors were examining the matter “independently of the hospital” but with its co-operation.
That same day, Coyle of Beaumont asked Brady of the NTPF to restore funding. Brady said the NTPF’s stance was unchanged.
Five days later, Gallagher said his request for “robust clarification” was not addressed in the two June 12th letters and another of June 13th.
“This clearly leaves open the issue of financial irregularity by Beaumont Hospital’s own admission and, while that remains open, the NTPF cannot recommence insourcing,” he said.
The NTPF recently told the Dáil Public Accounts Committee that it received a €25,000 reimbursement from Beaumont in October following the HSE’s internal audit.
“The NTPF is currently awaiting the results of an additional audit, agreed upon by Beaumont Hospital, concerning seven other specialties, in order to determine whether further funds are owed,” the fund said.
All of this is in addition to a HSE internal audit investigation at Naas General Hospital and internal reviews into consultants paid on a “fee-item basis” at University Hospital Kerry and St Michael’s Hospital, Dún Laoghaire.
There is still some way to go before the story is fully told.
