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Revealed: VGH to be paid €188,000 a day to provide hospital beds for government

Contract between Vitals Global Healthcare and government is leaked

Updated at 11.40am - Adds Health Ministry statement

VGH will be paid €188,000 a day, or nearly €70 million a year, to provide beds to the government at the Gozo, Karin Grech and St Luke’s hospitals, this newspaper can reveal.

The full agreement was leaked to The Sunday Times of Malta after a heavily redacted copy was tabled in Parliament last October following intense pressure by the Opposition.

The blacked-out sections concealed what Health Minister Chris Fearne said were commercially sensitive clauses.

Under the agreement signed by former health minister Konrad Mizzi, Vitals Global Healthcare – a company with no previous record in the provision of health services anywhere – was awarded the management of three State hospitals for 30 years.

The government bound itself to purchasing the service of at least 712 beds a day from VGH, according to the leaked copy of the agreement. In return, the government will be paying the company €68.5 million a year.

Even if the government does not need all these beds – something remote, according to VGH sources – it is still bound to paying the €188,000 daily.

The agreement also provides for the possibility that the government will want to increase the number of beds it rents from VGH. However, when the minimum 712 beds is surpassed, it will need to pay much higher rates per bed, in line with a price list used for medical tourism patients. This means the cost per bed will rise exponentially.

According to the parts of the agreement concealed by the government, taxpayers will be forking out different rates per bed depending on the type of healthcare provided and the hospital providing the service (see below).

For acute healthcare, the government will be paying VGH about €75,000 a day, or €27 million a year. Geriatric beds will cost €88,000 a day – €32 million per year – and will be provided both at the Gozo and Karen Grech hospitals, while for some 80 rehabilitation beds at St Luke’s, taxpayers will pay an additional €9 million a year.

It is not yet clear how these rates compare to the rates of private care currently available in Malta.

Nor is it known whether these rates include all the care and related pharmaceuticals and medical supplies, or whether the government will be billed separately for these provisions.

Mr Fearne assured Parliament that the cost related to the agreement with VGH would be equivalent to the amount paid by the government for the same health services outlined in the national budget.

According to Mr Fearne, the government was until last year spending about €55 million to run the three facilities.

Now it will be spending nearly €70 million for 712 beds.

Questions sent to the Health Ministry had not been replied to by the time of writing.

Mr Ferane has always disassociated himself from the commercial aspects of this agreement, pointing out that it was negotiated by Dr Mizzi and that he was only responsible for the medical side.

However, the full implementation of the agreement now falls completely within his remit, as Dr Mizzi has been placed in charge of tourism.

According to the agreement, VGH are bound to invest some €220 million in the facilities. However, they will be paid €2 billion over the next 30 years for the minimum number of beds required under the agreement.

Last year, following the government’s insistence upon not publishing all the details of the agreement, the Opposition asked the Auditor General to investigate the contract.

That probe is ongoing.

What the government hid from taxpayers

The government’s guarantee to Vitals:

▪ 125 acute care beds at Gozo General Hospital at €600 per bed per day

▪ 175 geriatric care beds at Gozo General Hospital at €180 per bed per day

▪ 320 geriatric care beds at Karen Grech Hospital at €180 per bed per day

▪ 80 rehabilitation beds at St Luke’s Hospital at €300 per bed per day.

ivan.camilleri@timesofmalta.com

Health Ministry statement

In a statement this morning, the Health Ministry said the cost per bed was to be comparable to the same service today and the government would not have to pay more for the significant improvement in infrastructure and medical equipment.

The cost of a bed, the ministry said, included all services received by the patient including tests, operations and medicines. It also included workers’ wages. These were to be paid by the government and the government would then be repaid by VGH.

The ministry said that the full contracts between the government and VGH were at the Auditor General for scrutiny. It was the government itself which requested the auditor to scrutinise the contracts, and not the Opposition.

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