[WATCH] Vital Group’s hospitals management takeover kicks off

Gozo General Hospital (GGH), St Luke’s Hospital (SLH) and Karin Grech Rehabilitation Hospital (KGRH) will be run under a public-private partnership

The management transition at the Gozo General Hospital (GGH), St Luke’s Hospital (SLH) and Karin Grech Rehabilitation Hospital (KGRH) from the government to Vitals Global Healthcare is officially underway.

The complete management takeover is expected to take between 30 and 60 days, or as long as is necessary, Health Minister Chris Fearne and Vitals Group Healthcare director Ram Tumuluri told MaltaToday during a press briefing.

“The conditions have been met,” Fearne said, sitting in a boardroom at Vitals’ headquarters in Ta’ Xbiex.

Contracts signed with VGH will be tabled in parliament after the summer recess or before the end of year.

Also present for the briefing were GGH CEO Nadine Delicata, KGRH CEO Stephen Zammit, interventional cardiologist Albert Fenech and Professor Mark Brincat.

Flanked by Tumuluri, the minister for health said that all services will remain free of charge, a radical push towards medical tourism will be given whilst Maltese and foreign patients will receive the “exact same” healthcare treatment.

“The workers will retain their status as government employees and they will remain on the government’s payroll.”

VGH expects its investment in medical tourism to provide substantial profit, keep specialists engaged and ensure that the service provided to all patients – locals and foreigners alike – remains at the highest levels.

For its medical tourism plans, VGH has roped in Walter Reed National Medical Centre; at St Luke’s, VGH will invest in a research and development project at the Centre for Women’s Health – to be led by Brincat – and the Centre for Diabetes. A third centre, concentrating on dermatology, is in partnership with the government and therefore services will be free of charge.

Both the government and VGH want the hospitals to be accredited by the ‘Joint Commission International’ which would place Malta on the medical tourism map.

In total, bed provision at GGH will be of 450 beds: 250 acute beds and 200 for geriatric and long-term cases. Of the 450 beds, 350 will be open for Maltese patients whilst 100 will be reserved for medical tourism.

At Karin Grech, VGH will provide 320 beds for geriatric care and all will be available for Maltese patients, in partnership with the government.

St Luke’s Hospital, where extensive refurbishment will take place, will have 350 beds, 150 of which will be for rehabilitation. 80 of these beds will be available for Maltese patients whilst 70 have been reserved for medical tourism. Rooms at St Luke’s will be either single or double bed rooms. Plans are to focus on trauma, specialized oncology and orthopedics.

Negotiations with the company started in October, after it was selected as the preferred bidder for the €220 million investment at the three hospitals. Vitals, whose finances are sourced between bank loans and equity, was one of three which bid for the redevelopment, management and operation of the hospitals.

“The hospitals required substantial investment and the government partnered up with the private sector. The plan is to continue buying beds from VGH at the same budget we’re currently spending,” Fearne said.

VGH’s CEO is physician Armin Ernst, who will be relocating to Malta from Boston, along with his family, to take up the job. Ernst has also worked with the European Union.

The medical board will have no shareholders, will comprise 12 members, half of whom will be Maltese physicians and specialists. The government and Barts will have a seat each. Because VGH has also partnered up with Partners HealthCare International, PHI will have a number of seats on the board too.

VGH, with roots in Singapore, will be based in Malta and plans on investing in similar public-private partnerships with at least five other countries. Its target is to have 3,500 beds worldwide.

In March, Vitals signed a 30-year concession agreement with the government, regulating a fixed lease fee. The €220 million initial investment will be carried out over the next two years. The company estimates that €150 million will be spent over the concession period in lifecycle planning and maintenance. Information sessions were recently held with workers at Karin Grech Hospital and the Gozo General Hospital.

“Whilst operations will move to VGH’s management, the government will continue working directly with the workers’ unions. For the duration of the concession, we will respect any decision that is agreed to between the government and the workers. In order to provide the comfort and the stability that the workers need, negotiating relations will be strictly between the government and unions,” Tumuluri said.

Whilst new workers replacing older workers will be enrolled on the public payroll, new workers working on new initiatives provided by the investor will be engaged through VGH.

Both Tumuluri and Fearne gave an assurance that the ‘same pay for same work’ principle will apply. Moreover, workers will be given the option to work additional shifts if they’d want to.

Some 1,600 workers are currently employed at GGH and KGH, with the team expected to expand to 2,400 workers. In Gozo alone, Vitals expects its project to create some 600 additional jobs.

Describing PPPs as the way forward in public healthcare, Tumuluri said one of the advantages was the drastic reduction in red tape, even in the simplest decision of engaging an anesthesiologist: “Following public procedure would take at least three months … this is eliminated in the private sector.”

GGH, SLH and KGRH will also serve as teaching hospitals: Vitals is partnering up with MCAST and Northumbria University to develop a nursing academy whilst working with Barts on their Gozo campus.

Whilst addressing staff shortage, not all students will be absorbed by the Maltese system and some might even go through the VGH system.

Tumuluri said the investment by the mother company in the health sector was varied, including pharmaceuticals, IT, management systems and so forth.

Investment in research and development will be given a push, and Vitals is looking at an annual investment of €200 million through its partnership with Partners Healthcare International.

Geotechnical studies at the GGH are underway, after which a report on the foundation works required will be presented to the Planning Authority for the necessary permitting.

Vitals is planning to have rehab beds at St Luke’s operational by September 2017, and start expanding the hospital on a wing-by-wing basis.

Works at Karin Grech started immediately.