Millions of euros wasted: the Mater Dei nightmare

"What is distressing of the state of play is that there is no rational reason of why Malta's health system - with MDH, currently, the kernel of such a system - is in the level of disarray that it is."

This is how John Dalli prefaces a report into the mismanagement of the €600 million Mater Dei Hospital commissioned by the health ministry earlier in the year.

According to the report, and disconcerting in more than one way, is Dalli's assertion that Mater Dei's financial system was "tantamount to being non-existent", with a one-entry bookkeeping system that is not covered by any accounting policies, no proper books of account, no proper records of amounts due or owing to the hospital, no control of payments made, and no management accounts that could assist management in taking proper decisions. 

"All these are multi-million euro assets," Dalli says, ominously of the fact that there is no effective control to manage yearly hospital operating costs amounting to €230 million; no strategic plans to sustain free health care services; no proper management of yearly contractual obligations amounting to €25 million, and the possibility of double payments to creditors.

Dalli also found:

• No control over consumption of pharmaceuticals (€14m) and medical supplies (€20m) leading to waste and "out-of-stock" situations;
• Yearly overtime and allowances amount to €37m; same pay rates for "on call" and "on duty" services by doctors; untaken vacation leave and time-off allowances amount to €3.07m; no management control over payroll costs amounting to €105 million.
• Unauthorized transfers of high value medical equipment from one location to another; financial records disclose medical equipment at €110 million against inventory records of €67 million.

Information Technology

IT at Mater Dei is "in total disarray". No integrated system, with the government infrastructure of MITA inflicting "dictated policies, introvert attitudes, heavy-handed bureaucracy, obsessive control, and a one-track approach in procurement."

Dalli even found MDH at the mercy of suppliers in accessing patient data.

With the current patient database set to be discontinued by the end of the year because it is outdated, the health ministry now has no alternative but to roll over the contract with the same supplier at a cost of around €2.5 million for a new licence, with an upgrade and a maintenance agreement for a "temporary" period of five years.

Staff and rosters

Data from the salaries section found 534 different shift patterns among 3242 staff, mainly nurses. The shift patterns generate 22 different working hours per week and many workers who have the same duties operate on different shift patterns in different sections at MDH.

"This means that the task of payroll calculation becomes a very laborious and tricky task (20 employees are required to calculate the payroll manually), a lot of disruptions are experienced in the flow of work and overtime is generated to fill the gaps created by these distortions," Dalli said.

"For example, it is a frequent occurrence that operations are not started on time because the full team does not report to work at the same time, and the rest of the team has to wait for the last member to appear. Worst still, it also happens that nurses change during an operation because of roster limitations. Apart from gross inefficiency, this can also affect patient safety."

Dalli also said that management had been further weakened by "interference from political masters who dictated the appointment of people without any consideration of meritocracy, forced staff movements not necessarily on an as-needed basis and who pushed pet vagaries such as family-friendly measures which, though laudable in themselves, were taken to extremes with the absurd results of myriads of unmanageable roasters."

Medical inventory

During 2012, Mater Dei consumed €43 million in pharmaceutical and medical supplies, "without even the basic controls and in a free-for-all environment. This must account for the waste of millions of Euros in pilferage, outdated stocks, and consumption of items at higher prices then appropriate."

Dalli found that apart from the Central Purchasing Supply Unit (CPSU) that manages three stockrooms in Gwardamangia, Madliena and Marsa, there were sub-stores in Mater Dei outside the CPSU's remit.

"There exist in all these stores many months' worth of stock. Everybody tries to have 'just-in-case inventories' so we don't run out. Yet, we still run out [and] end up with many thousands of euros worth of expired inventories."

Out-of-stock pharmaceuticals

Dalli found inadequate computer systems that made it difficult to ensure that medicines were available to patients, without shortages. He blamed government bureaucracy for such problems, such as a purchase requisition taking up to 18 months to get approved.

In an example, he explained how when a supplier is late in his delivery of an order, a tender is issued to bridge the expected medicine gap. Suppliers are asked to quote for this urgent supply, and amongst the tenderers is the late supplier.

"The late supplier who knows the prices quotes a cheaper price. Being the cheapest tender the late supplier is awarded the tender. The 'urgent' tender is also not delivered and no action is taken.

"I would recommend that such a supplier should be blacklisted as his tender offer was a fraudulent one being made when he knew that he could not deliver."

Dalli said that procurement of medicines were placed with a very select group of agents, not manufacturers. "This restricts even further the ability to leverage competitive bids to generate better availability, lower prices, shorter lead-times and better terms and conditions."

Inventory in hospital

Dalli said his visit to the stores in the surgical area was "shocking", finding access open to anyone, concluding that there was excessive expenditure due to pilferage and waste.

Dalli found expensive supplies stored in unsecured rooms; no active implant and instrument inventory on the general surgery side; instrument sterile collections unattended with outside doors commonly left open; and card readers inactivated at the first level security area.

"In short, inventory control is non-existent. This has its genesis not only in inefficient financial management, but also in the fact that there is no proper stock keeping function and system in Mater Dei," Dalli said.

Dalli said that MDH often loaned surgical instruments to private hospitals at no charge; three types of hip replacement implants varying in cost from €700 each to €1,200 but with the same functionality, and maintenance contracts for repairs of some equipment at €2,500 each repair: "When this was questioned, and a cost was requested for a particular repair - equivalent to that contracted - the cost was €750."