[WATCH] Talks between Vitals and Steward started last September, health minister says

The government was informed that talks had started between Vitals Global Healthcare and Steward Health Care in September last year, deputy Prime Minister and health minister Chris Fearne said today.

Speaking on Xtra on TVM, Fearne said that it was primarily Vitals which had notified that government about the talks for the sale of St Luke’s Hospital, the Gozo Hospital and Karin Grech Hospital, to Steward, but that the government had later confirmed this with Steward too.

Fearne maintained that “around November or December” Steward made a presentation, on their administration of hospitals in the United States, to the government.

A due diligence investigation on Steward was underway at the same time, he explained, which was finalised by early December.

At the end of December, VGH reached an agreement with Steward, which was approved by the government around nine days later, Fearne said.

Memorandum of Understanding

Asked by host Saviour Balzan for his reaction to the issue of lack of transparency regarding the deal between the government and Vitals, Fearne said that he disagreed that the arrangement had not bee transparent.

“A number of companies applied when we issued the request for proposals, and we chose Vitals. I went on record in parliament last week, offering to present all the relevant contracts to the Opposition,” he asserted, “How can you be more transparent than this?”

“The reason the government chose a public-private partnership for the three hospitals was that we wanted to improve certain areas of our health service. We wanted to keep developing the health infrastructure, and the funding for this had to come from the private sector - first from Vitals, and now it will come from Steward,” he said.

In reaction to this, Stephen Spiteri, Nationalist MP and health spokesperson, also on the programme, said that the deal had not been at all transparent.

“A Memorandum of Understanding, between Vitals and the government, was drawn up in February last year, before the request for proposals for the hospitals was even issued. This is enough to make one think,” Spiteri said.

“Moreover, apart from the transparency problem, Vitals had no track record in the health sector and they never administered hospitals. When you grant a tender, you would usually choose someone with experience,” he emphasised.

Fearne, in response to the Spiteri’s experience argument, argued that in the next few days, Steward, the biggest American company in the health sector, which administered around 40 hospitals in the US, will start managing the three hospitals. This would eliminate the poor track record issue, he said.

He also maintained that, when it came to the MOU, Malta Enterprise had been looking for foreign investment (as it normally does), and on finding Vitals, which was an interested investor, it invited it to Malta to make a presentation. Malta Enterprise would then let the company, in this case Vitals, know that a tender would be issued in the future in the health care area, and that it could apply for it if interested.

In return, Balzan asked if this meant that the entire tender was based on Vitals and tailor made for them.

Somewhat evasively, Fearne said that “the government did not issue a direct order. A number of companies applied when we issued the request for proposals, and Vitals was one of them.”

In a video message, Medical Association of Malta secretary general Martin Balzan said that the clause in the Vitals contract, which stipulated that the company needed the government’s permission to sell the hospitals, gave the state a degree of power, which was a positive thing.

In another message, Colin Galea, Malta Union of Midwives and Nurses secretary general maintained that MUMN had not been aware of the clause in the contract which allowed the government to extend the lease of the hospitals from 30 to 99 years.

“As the country’s biggest health union, we expected to at least be unofficially informed of this,” Galea said.

Asked by Balzan whether it was wise to have the possibility of entrusting hospitals to the public sector for such a long stretch of time, Spiteri said that the PN was not against privatisation, but when health care was concerned, it believed this was best left in the hands of the state, which was not interested in profit and did not have ulterior motives.

Asked whether Vitals was a bad choice to begin with, Fearne reiterated that the public-private partnership’s aim was to improve the health sector, and highlighted that the government didn’t want to leave St Luke’s “abandoned” and the Gozo Hospital as a “second-class” hospital.

“This is why we needed private investment - the alternative would have been to do nothing with the hospitals, as happened under the Nationalist administration,” he said.

Fearne also revealed that Vitals was under pressure by the government because they had ‘fallen behind’ on what they had been expected to do with the hospitals, and they were asked to find a solution to this problem.

‘Health care will remain free for all’

Asked what he expected from the public-private partnership, Spiteri responded that he wanted the health service to keep moving forward, that any areas lacking were brought up to scratch, and that Steward would not miss its milestones like Vitals had done, but kept to its targets.

He also remarked that he wanted to ensure that the system Steward used in America wasn’t copied, but that the system in Malta safeguarded patients as its top priority.

Fearne emphasised that the health care service in Malta remain free for all, including at the Gozo Hospital and Karin Grech.

“Steward will be making their money from medical tourism. Each medical tourist is expected to leave around €10,000 when seeking treatment at the Gozo Hospital,” he claimed.

Elaborating, he said that St Luke’s would become a rehabilitation hospital once the project progressed, something Malta was currently lacking.

The Gozo Hospital would be a general hospital like Mater Dei Hospital, and would offer the same standard of care which is on offer at Mater Dei.

“The idea is that, if you are Maltese, you go to Mater Dei, if Gozitan, to the Gozo Hospital,” he said.

“The medical tourism service for foreigners will be against payment. We have set out a number of beds in the Gozo Hospital which will be used for this purpose. However, we have an arrangement in the contract that in the case of a crisis where more beds are needed for Maltese citizens, then the beds dedicated for medical tourism can be made use of in such a situation.”

Ten-year health plan

The health minister said that the government was currently in discussions with Barts to formulate a national health plan for the next ten years.

“We are focusing strongly on prevention, mental health, research, personalised medicine and digital health,” he said.

Spiteri said he believed Malta was not prepared for its aging population, the life expectancy of which kept increasing.

“There are many things we still need to address,” Spiteri maintained, “Dementia, for instance, is a social plague which is not adequately dealt with in Malta. The dedicated ward at St Vincent De Paul Residence is overloaded. Therefore we need to equip ourselves not just for today, but also for the next ten to 15 years.

Asked, as the programme concluded, what he would do if the ongoing investigation on the Vitals contract showed that there had been some wrongdoing, Fearne said that he was confident that all had been done as it should have.

“If it results that something was not done right, however, I will see to it that all the relevant laws are observed.”

A number of questions sent to Vitals before the programme was recorded remained unanswered. Namely, Vitals failed to answer on: how they planned to get adequate financing for the project when they knew they couldn’t take a loan from a Maltese bank; at which point did they realise the project was not viable for them; whether the decision to look for a new buyer was theirs, or if they were pressured by the government; what will Steward have to start administering the hospitals; and whether the European Union money laundering directive which Malta signed earlier this month had any influence on the decision to sell the hospitals to another company.