Canadian hospitals' contracts with consultants scrutinized

Oct 22 2010

News outlets report on issues affecting the hospital markets in Canada, Pennsylvania and Massachusetts.

The Boston Globe: Cerberus Capital Management is poised to purchase Caritas Christi Health Care. "This morning, at a Massachusetts Supreme Judicial Court hearing, Caritas and Cerberus face the final hurdle in an approval process that began in the spring. A single justice, Francis X. Spina, will review the transaction, relying heavily on the recommendations of Attorney General Martha Coakley, who earlier this month advised that the deal should go through. There has been little opposition to turning the nonprofit organization, once run by the Archdiocese of Boston, into a for-profit venture. But the unwavering support of the Service Employees International Union, which represents 35,000 health care workers in the state and 3,000 at Caritas, stands out" (Healy, 10/21).

Pittsburgh Tribune-Review: The struggling West Penn Allegheny Health System is planning to open at least four "more accessible, low-cost urgent care and outpatient centers" that will include "doctors' offices, both in primary care and specialty areas." Dr. Christopher T. Olivia, the system's CEO, told the paper about the plans in an interview after speaking at a conference which "focused on the federal health law and its impact on the industry. Olivia said hospitals will be hard-hit by the law because it will slash key payments from federal programs" (Fabregas, 10/21).

Meanwhile, newspapers in Canada report that Ontario hospitals have not been following the rules for paying consultants. "Hospitals in Ontario used money that should have been spent on front-line health-care services and instead awarded lucrative contracts to consultants who spent freely on travel and entertainment, the province's auditor says," The Globe and Mail reports. "The government unveiled new rules on Wednesday that would prevent the public sector from using taxpayers' money to hire lobbyists. In addition to their use of consultants, [Auditor-General Jim] McCarter said eight of the 16 hospitals he audited spent $1.6-million on lobbyists. Hospitals, universities, colleges, school boards and children's aid societies are among the public-sector entities that would also have to comply with stricter rules on expenses and procuring goods and services. But the proposed legislation takes particular aim at hospitals. As first reported in The Globe and Mail, hospital executives would have to post their expenses online and their pay could be docked if they fail to comply with the legislation" (Howlett, 10/20).

Hamilton Spectator: "Among McCarter's more shocking findings was the extent of single-sourced contracts — 75 per cent — and follow-on contracts that saw consultants work related jobs without having to reapply. In one example, a consultant hired for a $160,000 job ended up being paid more than $1 million in add-on jobs" (O'Reilly, 10/20).