The Steward saga continues

On Thursday, Business Today reported that it had contacted Steward Health Care after allegations that it threatened to leave Malta unless the government allocated more funds. The US company categorically denied the claims, asserting that it has no plans for leaving.

At the time of writing, this was the last episode of the Vitals/Stewards saga – the people who were entrusted to manage three hospitals by the Maltese government by means of a contract that includes substantial parts that are still hidden from public scrutiny.

The Steward saga came back to the fore in the Maltese media this week after MAM – The Medical Association of Malta, the doctors’ union – held a press conference on Tuesday asking in no uncertain terms for the termination of the government’s agreement with Steward.

The original concession was, in fact, given to a more mysterious company, Vitals Global Healthcare, owned by unknown persons. Vitals subsequently ceded its rights to Steward. That story in itself was not just fishy, but stinking fishy.

The only other official reaction to the MAM press conference was a rare public rebuttal issued by the office of the Auditor General in which it denied MAM’s allegation that it had not conducted the inquiry about the deal as requested by Parliament’s Public Accounts Committee. MAM claimed that this was an “institutional failure”. On the other hand, the Auditor General’s office assured everybody that this inquiry is still ongoing.

Union Haddiema Maqghudin (UHM), the trade union representing Steward employees, joined the fun by appealing to government to absorb the healthcare professionals currently engaged by Steward Health Care as these do the same work as state employees but do not enjoy equal conditions. Such a step, of course, would tend to undermine some of the advantages of privatising hospital management.

On the other hand, with the situation being what it is, one can hardly discern what benefit the Maltese taxpayer is getting through this privatisation agreement. When the Prime Minister, Joseph Muscat, boasts about the money that this country ‘invests’ in health, his figures include monies that go to Steward, money that – according to MAM – are going down the wastewater system.

In fact, in his reply to the speech made by the leader of the Opposition about the budget, Muscat ignored Delia’s reference to the Vitals/Steward deal but just boasted about the money his government is contributing to the nation’s health services. This money includes that given to Steward, which is hardly well spent money – at least from the little the Maltese people know about what Steward are delivering.

In their press conference, MAM gave details of milestones in the original contract that have been completely missed. Apart from the new Barts College in Gozo that is now up and running after an extraordinary delay, the contract stipulated 50 additional beds for Karin Grech and St Luke’s Hospitals by 1 January 2017; 80 new rehabilitation beds at St Luke’s by 20 September 2017; completion of new Gozo Hospital by 31 May 2018; renovation of existing Gozo Hospital by 30 September 2018; and completion of St Luke’s tourism beds by December 31, 2018.

All these targets have been missed.

With government apparently doing nothing about these serious failures in Steward’s obligations, why would they want to leave?

The privatisation of the management of state hospitals makes sense only if the initial financial input for any needed new investment is made by the private sector that also runs the hospitals in a more efficient manner. In the long run, of course, it is the state that forks out the money for a more updated and efficient service that would not have been achieved by the public sector with the same money... while the private sector makes a profit.

The irony is that Mater Dei hospital has become more efficient over the last couple of years, despite its management not being privatised... while the hospitals with a privatised management have continued to fall behind.

I tend to agree with MAM in that government seems to be throwing good money after bad as a result of the Vitals/Steward contract and that cutting short its losses is the way forward for government to get out of this trap that it has set on itself.

Why and wherefore it chose to go down that road is another story, of course.

New German electoral mood

Last Sunday Germany’s far-right part Afd (Alternative for Germany) scored substantial gains in the election held in the ex-communist eastern state of Thuringia, at the expense of the big parties including Angela Merkel's centre-right CDU.

While the far-left Die Linke party easily won with about 30%, Afd came second with 23%, more than doubling its result in the previous election in 2014. This put the anti-immigration party in second place, narrowly ahead of the CDU that won about 22%, and far ahead of their coalition partners, the once powerful Social Democrats (SPD), who scored only 8%.

AfD’s strong result came despite widespread criticism after an incident in the eastern city of Halle, where a suspected neo-Nazi gunman tried and failed to storm a synagogue and then shot dead two people outside.

AfD is stronger in eastern German states compared to western states. It started out as a radical protest party and made huge gains in two other eastern state elections at the beginning of September.

The Thuringia campaign was marked by anger, threats and recriminations, with the CDU top local candidate – Mike Mohring – labelling the local AfD leader as a ‘Nazi’.

Mohring, said he was open to talks with Die Linke, even though his party had previously ruled out such a coalition. He pointed out that, for the first time, the ‘political centre’ was no longer a majority. However, he insisted that this does not mean that the CDU can stand in a corner without having to take any responsibility.

The result of this state election is just the latest one to send warning signals to the coalition in the Berlin Bundestag that is made up of the Christian Democrats and the Democratic Socialists.

The Christian Democrats, led by Annegret Kramp-Karrenbauer with Angela Merkel as Chancellor, need to decide how they are to move forward and how they can win back voters.