RTÉ Investigates: Medical suppliers bribing hospital purchasers

Surprised there's nothing about this yet on Boards. It looks like some people in very powerful positions as purchasers of medical equipment and services for Irish hospitals are in major trouble, if Paul Murphy's report on Prime Time tonight is all accurate.

It became clear quickly that the source for the story was within the company, Eurosurgical Ltd, as the emails used were from the Sales director in that firm. Sure enough when the "whistleblower" was interviewed he had been an employee of Eurosurgical Ltd. Be careful what enemies you make.

The firm was essentially getting quotes from competing firms from these hospital buyers and thus winning contracts but it was also bidding higher - 10 times in one case - than those firms and still getting the contract (i.e. Irish taxpayers were paying for this). In return, the senior hospital purchasers were given holidays and so forth - with very unconvincing explanations for why Eurosurgical paid for these holidays.

Excellent work, RTÉ. I sense this is only the tip of things. We need more eyes on people who have the power to award lucrative public contracts. I'd say this firm is now in major difficulty not only within its own industry and with hospitals but also with the Revenue.

Here's a website summary of the programme, but the whole thing is worth watching:

http://m.rte.ie/news/2015/0716/715345-senior-hospital-staff-accepted-gifts-from-supplier/

Harry Palmr

Didn't see it but that it happens is not surprising, the health and medical supplies industries are run on practices that some would call bribery.

The Rape of Lucretia

Ach, bribery schmibery.
We are talking pennies here really, and it happens all the time in business. A little bit of you scratch my back and I'll scratch yours. You would need to be very innocent or ignorant of how the world works to think this story has any bite in it.
RTE scraping the bottom of the barrel if this is the best they can do looking for inefficiency and lack of transparency in the health service.

arctictree

The two involved have been suspended with pay. That'll teach them...

SEPT 23 1989

Happens in most big companies i would imagine

The Muppet

Perhaps but that doesn't make it acceptable . The consumer ends up paying for these perks.

eamonnq

arctictree wrote: »

The two involved have been suspended with pay. That'll teach them...

Suspending them without pay, prior to a full investigation might have been more expensive in the long run!!

gladrags

The Rape of Lucretia wrote: »

Ach, bribery schmibery.
We are talking pennies here really, and it happens all the time in business. A little bit of you scratch my back and I'll scratch yours. You would need to be very innocent or ignorant of how the world works to think this story has any bite in it.
RTE scraping the bottom of the barrel if this is the best they can do looking for inefficiency and lack of transparency in the health service.

Its the tip of the iceberg.

This is small fry compared to what is going on with major suppliers.

Surgical instruments and equipment are very expensive.

There are several major suppliers involved in this lucrative market.

jjC123

Correct me if I'm wrong, but aren't The Beacon and St. Vincents private? Isn't gift-giving as an extra incentive for a company to buy your product just private corporations at work? Or are there laws against it?

gladrags

jjC123 wrote: »

Correct me if I'm wrong, but aren't The Beacon and St. Vincents private? Isn't gift-giving as an extra incentive for a company to buy your product just private corporations at work? Or are there laws against it?

If decisions are made on the purchase of surgical equipment based on gifts,rather than the quality and justified cost of the product,does this not compromise the safety of the patient,and increase the risk.?

There are strict EU guidlines and standards that govern the procurement of surgical equipment,particularly instruments used directly on the patient.

And gifts are not one of them.

According to the RTE broadcast,there are other hospitals involved in this practice.

This should not be swept under the carpet.

This particular company is very well known,and this issue is not specefic to this company.

By a long shot.

jmayo

Harry Palmr wrote: »

Didn't see it but that it happens is not surprising, the health and medical supplies industries are run on practices that some would call bribery.

Not everyone is the same.
And the sad thing is that honest companies are now being tarred with the same brush.

Companies who don't enage in this are the biggest loosers, apart form the taxpayer or hospital owner as in Beacon.
How would you like to be in one of the companies who unfairly lost business to the one mentioned in Prime Time?

gladrags wrote: »

Its the tip of the iceberg.

This is small fry compared to what is going on with major suppliers.

Surgical instruments and equipment are very expensive.

There are several major suppliers involved in this lucrative market.

If you have evidence go to the guards or call Prime Time.
Don't just be lazy and basically intimidate that everyone is doing it.

gladrags wrote: »

...

According to the RTE broadcast,there are other hospitals involved in this practice.

This should not be swept under the carpet.

This particular company is very well known,and this issue is not specefic to this company.

By a long shot.

Again put your money where your mouth is.

No one in the industry, or at least those playing by the rules, want this swept under the carpet.
In fact they want it thoroughly exposed so that it is a fair playing field.

Today all medical suppliers, rightly or wrongly, are being lumped in with this company.

And that includes the companies who actually lost business because of this particular company. :mad:

But of course you carry right on labelling everyone the fooking same.

Fratton Fred

jjC123 wrote: »

Correct me if I'm wrong, but aren't The Beacon and St. Vincents private? Isn't gift-giving as an extra incentive for a company to buy your product just private corporations at work? Or are there laws against it?

If someone took an incentive to buy something, on a companies behalf, at four times the cost then it is fraud.

jmayo

jjC123 wrote: »

Correct me if I'm wrong, but aren't The Beacon and St. Vincents private? Isn't gift-giving as an extra incentive for a company to buy your product just private corporations at work? Or are there laws against it?

Beacon is private, St Vincents Private is private, but this was Vincents public.

And no not all private corporations or companies buy their contracts with gifts.
Companies and organisations have rules about staff getting gifts from suppliers.
Some companies decide that gifts, like the christmas bottles of whiskey or wine, are often meant to be put into a central kitty and raffled off.
Other companies have rules in place that strictly forbid gifts above a small value.
Yes you can accept a diary, a box of chocs, a bottle of plonk, but that is it.

Gifts or "sweetners" are not meant to be given or sought.
Of course how many companies, and indeed organisations of the state, offer certain people match day tickets for rugby internationals, All Irelands, etc.

Atlantic Dawn

SEPT 23 1989 wrote: »

Happens in most big companies i would imagine

Yes but when it's public money there's a difference.

Looks like James Reilly got a donation from them of €650 for a golf classic in 2008.

http://www.boards.ie/vbulletin/showthread.php?p=69717471

Fratton Fred

Atlantic Dawn wrote: »

Yes but when it's public money there's a difference.

Not in the eyes of the law.

Fraud is fraud.

Atlantic Dawn

Fratton Fred wrote: »

Not in the eyes of the law.

Fraud is fraud.

Yes I meant more from a public rage point of view, private companies can bung and bribe each other for all I care

Fratton Fred

What surprised me is that it is procurement people doing this. They are supposed to be the gamekeepers that stop this kind of thing happening and as such, are often subject to closer scrutiny.

A procurement manager with a criminal conviction for fraud will never work in that field again.

michael999999

Interesting that one of Denis o Brien's company's is at the wrong end of a dodgy deal for a change!

Atlantic Dawn

Just finished watching it there, interesting that authorities knew about it over a year ago and only today was anything actually done to suspend payment.

michael999999

Atlantic Dawn wrote: »

Just finished watching it there, interesting that Leo knew about it over a year ago and only today was anything actually done to suspend payment.

That's fine Gael for you. Asleep at the wheel!

IBRC, siteserv, Rehab, NAMA. No governance or oversight from this so called Government!

gladrags

jmayo wrote: »

Not everyone is the same.
If you have evidence go to the guards or call Prime Time.
Don't just be lazy and basically intimidate that everyone is doing it.

The Gardai and the HSE were informed a year ago.

RTE has specified that there are at least another 3-4 Dublin hospitals involved,but they cannot name them for legal reasons.

I don't see you mention the interests of the patient,which as far as I am concerned,is the priority.

I am sure that you would like to be reassured that if you or any of your family were to undergo a medical procedure,that the equipment used,is fit for purpose.

KomradeBishop

That whistleblower should be rewarded a huge sum of money - need more people like that in this country.

The people committing the fraud, should go to prison - but what are the chances of that in this country?

Fleawuss

The Rape of Lucretia wrote: »

Ach, bribery schmibery.
We are talking pennies here really, and it happens all the time in business. A little bit of you scratch my back and I'll scratch yours. You would need to be very innocent or ignorant of how the world works to think this story has any bite in it.
RTE scraping the bottom of the barrel if this is the best they can do looking for inefficiency and lack of transparency in the health service.

Hi Bertie.

brightspark

Hopefully Revenue audit all those involved, and issue their punitive fines where appropriate.

Eutow

If these were public procurement contracts then they must obey European public procurement law, such as laws and procedures from the Official Journal of the European Union (OJEU). This being Ireland I wouldn't be surprised if these procedures were not followed. Doesn't Ireland pay a lot more for branded drugs rather than paying less for generic drugs that do the same job?

Private companies often have their own ethical procedures in place, so that gifts from suppliers above a certain amount have to be declared. Private companies don't have to follow the OJEU, so they don't fall under these procedures.

I would hope that these buyers that should have been working to get the best price for the best service when using public money will now be charged with fraud for not carrying out their role according to the principles laid out under European public procurement law.

BigBrownBear

What should be happening in the health service is a proper tendering process.
A ward or department identifies a number of medical products it requires.
They meet with the purchasing department and agree specs required.
The purchasing dept then contacts ALL potential suppliers to submit a quote, based on the specs requested.
Each company then provides a quote and a sample of their product, for quality analysis.
Each sample is assessed and the ward or dept meet with purchasing dept and give feedback.
A contract is awarded, for a defined period to the company that satisfies both quality and cost.
This ensures the decision is not left up to one individual, thus reducing the likelihood of the indivual being potentially compromised

Aidric

Fratton Fred wrote: »

What surprised me is that it is procurement people doing this. They are supposed to be the gamekeepers that stop this kind of thing happening and as such, are often subject to closer scrutiny.

A procurement manager with a criminal conviction for fraud will never work in that field again.

From experience I can say that procurement would be subject to strict audit controls, both internal and external. I haven't seen the documentary but was their any attention paid to internal audit function?

UsedToWait

Aidric wrote: »

From experience I can say that procurement would be subject to strict audit controls, both internal and external. I haven't seen the documentary but was their any attention paid to internal audit function?

Presumably, given what has come out about competitor's prices being shared with the company, they were able to be the lowest bidder.
Also, I would assume the purchasing department was favourable to the company's product in the scoring process of the tendering in respect of the intangible elements such as quality.

Given that payments were allegedly given in cash, I'm not sure how the auditors could find anything amiss?

Massimo Cassagrande

Harry Palmr wrote: »

Didn't see it but that it happens is not surprising, the health and medical supplies industries areIreland is run on practices that some would call bribery.

Fyp.

brightspark

UsedToWait wrote: »

Presumably, given what has come out about competitor's prices being shared with the company, they were able to be the lowest bidder.
Given that payments were allegedly given in cash, I'm not sure how the auditors could find anything amiss?

One item was mentioned that cost approx. 10x the cost of the original suppliers? Hardly lowest bid.

UsedToWait

brightspark wrote: »

One item was mentioned that cost approx. 10x the cost of the original suppliers? Hardly lowest bid.

I wasn't aware of that - particularly the hugely inflated cost.
However, the point remains that in the tendering process, cost is just one element..

Aidric

UsedToWait wrote: »

Presumably, given what has come out about competitor's prices being shared with the company, they were able to be the lowest bidder.
Also, I would assume the purchasing department was favourable to the company's product in the scoring process of the tendering in respect of the intangible elements such as quality.

Given that payments were allegedly given in cash, I'm not sure how the auditors could find anything amiss?

Cash payments in lieu of public hospital contracts?

ted1

Atlantic Dawn wrote: »

Yes I meant more from a public rage point of view, private companies can bung and bribe each other for all I care

Vincent's is private but funded by the HSE.

UsedToWait

Aidric wrote: »

Cash payments in lieu of public hospital contracts?

I was talking about the cash payments for insider knowledge and, presumably, influence..
I'm sure the procurement process was prima facie run to look legit

Aidric

UsedToWait wrote: »

I was talking about the cash payments for insider knowledge and, presumably, influence..
I'm sure the procurement process was prima facie run to look legit

Hmmm, wasn't the Beacon acquired by Denis O Brien with a heavy debt profile?
Not implying there is anything related.

jmayo

gladrags wrote: »

The Gardai and the HSE were informed a year ago.

RTE has specified that there are at least another 3-4 Dublin hospitals involved,but they cannot name them for legal reasons.

I don't see you mention the interests of the patient,which as far as I am concerned,is the priority.

I am sure that you would like to be reassured that if you or any of your family were to undergo a medical procedure,that the equipment used,is fit for purpose.

I don't know anyone, bar you, is saying that the products were not fit for purpose.
Are you now questioning the manufacturer bona fides ?

The products this company sells are not some shyte that falls off the back of a lorry from some fly by night manufacturer, but all products from major multinational manufacturers who will have no doubt gone through major medical accreditation processes to allow their products be sold in the market place.

If there was an issue with the products then doctors and staff would not be using them.

The issue is the prices charged and the value for money gotten by the hospital and hence the taxpayers and owners of said hospital.
Als the fact that the purchasing staff were relaying the competitors pricing to this company is tantamount to industrial espionage and in some jurisdictions a criminal offence.

BigBrownBear wrote: »

What should be happening in the health service is a proper tendering process.
A ward or department identifies a number of medical products it requires.
They meet with the purchasing department and agree specs required.
The purchasing dept then contacts ALL potential suppliers to submit a quote, based on the specs requested.
Each company then provides a quote and a sample of their product, for quality analysis.
Each sample is assessed and the ward or dept meet with purchasing dept and give feedback.
A contract is awarded, for a defined period to the company that satisfies both quality and cost.
This ensures the decision is not left up to one individual, thus reducing the likelihood of the indivual being potentially compromised

There is a very thorough tendering process, but if the people reviewing the tenders decide to throw some of the guidelines and criteria out the window, what do you do.

If you raise a stink in this business then you get a name for being awkward and you lose contracts down the road.

I know of one incident where a tender result was overturned and the tender process was carried out again because the first company that won the tender did not actually meet the tender criteria.

Don't ask me what happened to the staff who awarded the tender the first time. Probably nothing I would guess.

I also know of cases where a company has won a tender and is meant to supply hospital, but yet hospital staff go off and continue to source the goods from another supplier who had the contract previously.
Is that right ?

One could surmise that there are sweetners because staff can go out of there way to make sure certain suppliers win contracts.
Hiospital staff can put enough of the right hurdles in place to make sure "their preferred" supplier gets the gig.

RainyDay

jmayo wrote: »

There is a very thorough tendering process, but if the people reviewing the tenders decide to throw some of the guidelines and criteria out the window, what do you do.

The usual practice in my experience (mostly tenders for services rather than goods) would be to have at least one external person on a tender panel. There would also usually be someone from a different department to the lead person. This all minimises the chances of corrupting the tender process - as you'd now have to corrupt/bribe three people, not just one.

Which brings me on to a very interesting question about this case - who approved the relevant invoices in St Vincents and the Beacon?

The person who approves the invoices has a particular responsibility to ensure that value for money has been achieved. It has to be a different person to whoever placed the orders - standard Segregation of Duties requirements that would be checked by auditors.

So whoever signed off on those invoices must be having some squeaky bum moments these days...

Man down at the Beacon; http://www.rte.ie/news/2015/0721/716248-beacon-hospital/

gladrags

jmayo wrote: »

I don't know anyone, bar you, is saying that the products were not fit for purpose.
Are you now questioning the manufacturer bona fides ?

The products this company sells are not some shyte that falls off the back of a lorry from some fly by night manufacturer, but all products from major multinational manufacturers who will have no doubt gone through major medical accreditation processes to allow their products be sold in the market place.

If there was an issue with the products then doctors and staff would not be using them.

If the procurement standards have been breached,does this not raise the question of the quality of the product.?

And if the supplier and buyer have breached the standards,what guarantee is there that other standards have not been breached.?

Have the standards that govern the procurement of surgical instruments beem breached.?

And how common is this practice across the HSE and the private sector.?

The patient is the bottom line,and I believe that the patients interests have been compromised,we are talking about medical supplies here.

BigBrownBear

Tendering is only required for a certain five figure sum. It has no relevance to the Prime TIme programme as the products they discussed weren't, tendered for.
They were a quote, not a tender application
If someone wants to change a product below the above mentioned sum, they are not required to instigate a tendering process

RainyDay

BigBrownBear wrote: »

Tendering is only required for a certain five figure sum. It has no relevance to the Prime TIme programme as the products they discussed weren't, tendered for.
They were a quote, not a tender application
If someone wants to change a product below the above mentioned sum, they are not required to instigate a tendering process

But it is explicitly against procurement rules to split shipments to get below the relevant thresholds. So while the amounts of the orders shown in the programme were fairly low, the real question is how much does the hospital spend on these products overall. One of the products mentioned were drapes, which would surely involve huge quantities in a hospital like St Vincents.

And even for smaller quantities, they are required to get three quotes from competing suppliers.

jmayo

gladrags wrote: »

If the procurement standards have been breached,does this not raise the question of the quality of the product.?

And if the supplier and buyer have breached the standards,what guarantee is there that other standards have not been breached.?

Have the standards that govern the procurement of surgical instruments beem breached.?

And how common is this practice across the HSE and the private sector.?

The patient is the bottom line,and I believe that the patients interests have been compromised,we are talking about medical supplies here.

Once again you are basically questioning the quality of the products of these multinationals.
Medical products usually have had to go through trials and certification process to be deemed fit for sale in western markets.
That costs money and that together with the quality standard necessary in manufacture is what adds to the high price of medical supplies.
Same applies to aviation and to some extenet defense industries.

You don't have to buy crap products to have fraud and to cream money.
All you do is overcharge and this appears to be what they were doing.

Also they knew from price lists what pricing to instigate to get contracts or purchases.

The patients interest has been compromised from the point that money that could spent on better care for them was wasted, ultimately on expensive foreign holidays for certain staff.
Staff that don't even ever see a patient.

The higher service and repair area costs may be easier to get through, as they can waffle more than with actual purchasable product.

But as Rainyday mentioned ...
Who passed these invoices ?

In the case of service and repair charges, in-house service department or clinical engineering should have seen the extorionate costs and surely someone should have raised a red flag ?

Some one doing a purchasing report should surely have spotted the blatant spike in costs for the parts that should have cost 700, but were bought for 7000.

Then again some hospitals get the suppliers to give them the reports on what they buy because they can't be ar*ed doing their own.

I think we went off on tangent when discussing tenders and contracts, but I know of incidents where they have resulted in some strange decisions so not sure if same games were afoot behind the scenes.

LordSutch

Harry Palmr wrote: »

Didn't see it but that it happens is not surprising, the health and medical supplies industries are run on practices that some would call bribery.

Bribery, corruption, malpractice, sharp practice, unethical bent dealings! < take your pick.

I guess the characters involved are either "on leave" or gone for good.
Amazing that this kind of carry on can still exist in this day & age.

gladrags

jmayo wrote: »

Once again you are basically questioning the quality of the products of these multinationals.
Medical products usually have had to go through trials and certification process to be deemed fit for sale in western markets.
That costs money and that together with the quality standard necessary in manufacture is what adds to the high price of medical supplies.
Same applies to aviation and to some extenet defense industries.

You don't have to buy crap products to have fraud and to cream money.
All you do is overcharge and this appears to be what they were doing.

Also they knew from price lists what pricing to instigate to get contracts or purchases.

The patients interest has been compromised from the point that money that could spent on better care for them was wasted, ultimately on expensive foreign holidays for certain staff.
Staff that don't even ever see a patient.

The higher service and repair area costs may be easier to get through, as they can waffle more than with actual purchasable product.

But as Rainyday mentioned ...
Who passed these invoices ?

In the case of service and repair charges, in-house service department or clinical engineering should have seen the extorionate costs and surely someone should have raised a red flag ?

Some one doing a purchasing report should surely have spotted the blatant spike in costs for the parts that should have cost 700, but were bought for 7000.

Then again some hospitals get the suppliers to give them the reports on what they buy because they can't be ar*ed doing their own.

I think we went off on tangent when discussing tenders and contracts, but I know of incidents where they have resulted in some strange decisions so not sure if same games were afoot behind the scenes.

The first thing that needs to be questioned,from a risk management perspective,is the quality.

We are talking hospitals here,and the ethics of quality standards,for patients.

It is that simple.

How frequent is this practice,and how many of our hospitals are using this "methodology".?

That is the most important factor,in all of this.

Just appearing on the RTÉ site:

HSE says Eurosurgical has suspended employee

It sounds like a bit of a sham, as in the initial RTÉ programme it was stated that Alan Kane, the sales director above, is one of the owners of this family firm. It's not like he was some ordinary employee.

It seems something very similar in corruption terms is happening in the NHS over in Britain according to the Daily Telegraph website this evening:

NHS bosses paid by drug firms

Lavish trips laid on by drugs firms to sway NHS staff

"Senior NHS staff are being paid thousands of pounds and taken on expensive trips by drug companies lobbying to get their products used by the health service, the Daily Telegraph can reveal..."