HSE West management tender: More expensive bureaucracy?

Tuesday 1st November 2011

IMPACT national secretary LOUISE O’DONNELL says the HSE West management tender is an underhand attempt to bypass the public service pay cap while adding an expensive new layer of management bureaucracy in our health services.

The news that HSE West was tendering for new managers for University Hospital Galway (UHG), supposedly as part of an overhaul of hospital management throughout the region, first came via the Connacht Sentinel last month.

I immediately wrote to health minister James Reilly looking for the details. Only then did the he emerge in the media to explain what was happening. He said five companies, one Irish and four British, were in the running for the tender to run two hospitals – UHG and the Mid-Western Regional Hospital, Limerick.

Minister Reilly said he was bringing in managerial expertise from the private sector and that the successful company would provide a chief executive for UHG and three senior managers in Limerick. He said this “external managerial expertise” would have three functions: to manage the hospital, “grow” new management underneath them, and “upskill” existing management in UHG, Limerick and smaller hospitals across the region. It would be an 18-month contract.

It all sounded very vague and it came with plenty of unanswered questions. Who are the companies supplying the personnel? Who are the individual managers supplied by these agencies? What experience, if any, have they in running a public hospital or health service? How much will they be paid? And how much will the agencies get on top of this?

The answers, whenever they come, are unlikely to reassure patients that hospital services are going to be improved, or even that this initiative had been thought through. In response to our correspondence the Minster simply said that IMPACT’s concerns were “receiving attention.”

On the face of it, this looks like an attempt to install another layer of management on a health system which the minister, while in opposition, strongly criticised for its so-called bureaucracy. In the case of Limerick hospital there aren’t even any current vacancies to be filled. So why the planned additional layer of management?

This also raises concerns that the HSE has drained itself of senior management personnel under last year’s early retirement and voluntary redundancy schemes. What was the point, if the HSE is now forced to rely on more expensive measures to fill the gaps? Will people who were paid off under the 2010 scheme end up back at their desks having subsequently been recruited by private management companies?

The HSE has already fallen foul of cost overruns by employing too many agency staff in some areas. This proposal forces the HSE to extend itself even further into the swamp of outsourced services, at a cost as yet unknown.

It’s certainly possible that seeking tenders for management contracts is an attempt to bypass both the recruitment moratorium and public service pay rates. It’s been alleged that no individual candidate can be persuaded to take on the management of UHG. So is this simply a means of making the job more financially attractive when hospitals in the west are crying out for cash and resources – including front line and vital support staff?

If so, the HSE could yet again itself with some explaining to do at a time when it needs to regain public trust. And the minister will have to tell patients and taxpayers how this squares with reduced hospital services in the west. Not to mention the staff who bent over backwards to find €800 million of additional savings when the region faced financial crisis this time last year.

Convoluted third party arrangements to breach pay guidelines will put further pressure on limited financial resources, which would be better used to address the very serious capacity issues that these hospitals face every day.

The minister and his department have serious questions to answer about this outsourcing arrangement. In short, how will the problems of hospitals in the west be eased if they are lumbered with private, semi-detached management at higher cost?

Louise O’Donnell is IMPACT’s national secretary with responsibility for the union’s Health & Welfare division.