Auditor General: Hospital contracting out practices fall short. Now what about the big contracts?

The Auditor General makes two general observations about the contracting out of services to consultants: [1] Ontario’s health-care sector makes extensive use of consultants, and [2] all too often, they do this without following sound business practices.

The Auditor found some problems with the practices of the Ministry of Health (e.g. the Ministry seemed to favour certain consultants in some cases) and more in the practices of the LHINs.

But it's the hospitals that really get the brunt of the Auditor's criticisms. "We noted far too many instances at the hospitals we visited where sound public-sector business practices were not followed in the selection and oversight of consulting ser­vices." So hospitals did not require:

• assignments to be well defined and properly justified before consultants were engaged;

• adequate contractual arrangements with fixed price ceilings;

• payments to be tied to specified deliverables; and

• consultant performance to be properly managed.

And indeed the AG exposes some very embarrassing incidents.  A consultant was paid $170,000 and then demanded another $3,000 for detailed receipts. Another consultant (billing $1,100 for every 8 hours of work) got paid while he vacationed in Japan.   In fact the consultant billed for every single working day for three years -- no days off. 

It makes you wonder if the hospital bosses ever read the news stories that came out of the eHealth contracting out scandal.

The Auditor recommends that "hospitals should track and regularly report to Local Health Integration Networks (LHINs) on their use of consultants in a manner that demonstrates their compliance with required policies and sound public-sector business practices."

It is certainly a good thing that the Auditor has exposed these problems.

But the focus, so far, is only on management services contracted out to consultants. And that sort of contracting is, in many cases, only a rather small portion of the contracting done by hospitals.

Much bigger contracts go for work formerly done by unionised employees of the hospitals -- e.g. for dietary services, housekeeping services, office services, and maintenance.

That's where the big boys, the transnational corporations, get in on contracting out hospital services.  And that is where some bigger money is found.  Indeed, when the Auditor reviewed the Brampton privatized P3 hospital, he found major problems with the contracting-out of such services. That's where some of the biggest extra costs were found for the P3.  These contracts involve many millions of dollars, not tens or hundreds of thousands.

So good on the Auditor.  But how about some public reports on the major contracting out that goes on in hospitals? It would be great to see hospitals publicly report on their contracts with transnational corporations for dietary, housekeeping, or other major hospital services (and not just for the little things, like consulting services).

If they goofed up so badly with consultant contracts, there's probably some big money to be saved if the service contracts are reviewed.

Oh -- and by the way -- the ink wasn't dry on the Auditor's report before I began seeing claims from hospitals that they had learned their lesson and would do better. 

We will see.


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