HSE planned to pay €1.5m to outside management firm

The Department of Health and the HSE drew up confidential plans to pay up to €1.5 million a year to hire an outside company to manage its hospitals in Limerick and Galway, new official documents show.

The files show that in autumn 2011 the Department of Health determined that there was an “acknowledged deficit of management capacity” within the health service and that this was jeopardising the Government’s reform programme.

It said at the time there was a particular urgency about the situation in Galway and Limerick as top management positions were vacant and hospitals in the areas were facing large budget overruns.

While it was known that the Department of Health and HSE had looked at ways of addressing perceived management deficits in the west in late 2011, the files reveal for the first time the amounts they were prepared to pay to an outside company for the provision of such a service.

The Department of Health file said the HSE had carried out a procurement process to obtain interim management. It said five companies had been considered under a plan to provide a chief executive, chief operations officer and chief financial officer for Limerick, and a chief executive for Galway.

Clearance

The HSE estimated that the contract to provide management to run the hospitals could cost up to €1.5 million a year and wanted Government clearance to proceed.

“The contract would be for a limited time – 15 months is suggested – and would involve the HSE paying the successful company an agreed fee, with that company being responsible for any and all payments, including expenses, to the individuals concerned.”

However the files maintained that the Department of Health acknowledged that there was “ a risk that this initiative could attract adverse media comment and be perceived by some as a way around the cap on public service salaries”.

The Department of Health said the plan would address what was becoming a critical situation in the hospitals in the west.

“The contract will also require the successful company to (i) strengthen current management capacity across the acute hospital system in the west, eg by supporting managers in other hospitals and sharing best practice with them, and (ii) identify and develop a sustainable solution to the management deficit in Galway and Limerick, ie for the period after this interim contract.”

Ultimately, in December 2011 the Department of Public Expenditure and Reform sanctioned the appointment of two existing health service managers: Bill Maher, of St Vincent's University Hospital in Dublin, to run hospitals in Galway; and Anne Doherty, former head of the HSE national hospitals office, to manage hospitals in Limerick.

As part of the official sanction Maher would continue to receive his salary of €195,000.