Vaccine debacle raises questions about credibility of Beacon chief

The Beacon private hospital is at the centre of a storm for providing coronavirus vaccines to teachers at a private school attended by the children of Michael Cullen, the Beacon's chief executive. Taoiseach Micheál Martin summed up the public mood on Monday by saying the move was "repugnant".

Although Mr Cullen has survived the first onslaught of demands for his resignation, he now faces the prospect of a review of the debacle by Eugene McCague, a former managing partner of Arthur Cox solicitors and former member of the board of the Health Service Executive (HSE).

His conduct has already led to severe criticism of the south Dublin hospital, owned by businessman Denis O’Brien, after it supplied the excess vaccines to teachers at St Gerard’s school near Bray. With Covid-19 vaccines in short supply and the rate of infection with the virus still high, the sight of one private institution favouring another with a scarce public commodity was toxic.

"The vaccines belong to the people of Ireland and prioritisation to date has been give to the most vulnerable," the Taoiseach said.

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The Government has already suspended the operation of the vaccination centre at the Beacon as a result of the controversy. The hospital had vaccinated more than 9,000 frontline healthcare workers against Covid-19 to date, and was being run as a vaccination centre on behalf of the HSE.

Previous issues

This was not the first point of conflict with the Beacon over the response to the coronavirus pandemic. As a virulent new Covid-19 strain surged in January, the hospital's initial refusal to provide additional capacity to the State was heavily criticised by Paul Reid, chief executive of the HSE. "It wouldn't have been a very popular position to have taken," said one official of the Beacon's stance, which it ultimately reversed.

The latest accounts for Beacon Medical Group Sandyford Ltd, operator of the hospital, show that it had annual revenues of €142.5 million in 2019 and €17.1 million in earnings before interest, tax, depreciation and amortisation, a key measure of underlying profit. The pretax profit was €1.8 million. The business had rapidly expanded before the pandemic struck a year ago, having grown revenues from €91.7 million in 2016.

The operating company describes the Beacon as “one of the most advanced hospitals in Europe” with “world-class acute care services” and more than 130,000 patient visits in 2019. But now the vaccination debacle has raised glaring questions over the credibility of the hospital’s top executive, Mr Cullen. He has apologised, but that did not deter calls for his removal in advance of a meeting on Monday of the hospital board.

“Upon completion of the [McCague] review, the non-executive members of the board will consider its findings and will at that time take any necessary actions required,” the Beacon said in a statement.

Mr O’Brien’s stance remains pivotal, although he is not himself on the board. But the directors would have to be conscious of his wishes over a question that has disgorged a cascade of negative publicity on the hospital.

Directors

The directors of Beacon Medical Group Sandyford are: Mr Cullen; Colm Doherty, formerly a top executive at AIB; Dermot Hayes, a close business associate of Mr O'Brien; and John Delaney, an accountant whose interests include a directorship with the Fallon & Byrne food retailer.

A subsidiary company – Beacon Hospital Sandyford Ltd – has a bigger board and its directors include Brian Cowen, the former taoiseach who served as minister for health earlier in his political career.

In addition to Mr Cullen, Mr Doherty and Mr Hayes, the other directors are: Barbara Cotter, a solicitor who was a partner with A&L Goodbody and is chairwoman of the State-owned Strategic Banking Corporation of Ireland; Brian Fitzgerald, deputy hospital chief executive; Darragh Kavanagh, chief financial officer for the hospital; Niall Devereux, an associate of Mr O'Brien who formerly worked with his Topaz fuel business as well as with health insurer Bupa; Prof Mark Redmond, medical director of the hospital; and Suzanne Garvey, director of clinical hospital operations.

Yet the dominant figure is Mr O’Brien, who bought the hospital in 2014 after the departure of the University of Pittsburgh Medical Centre, a US private hospital operator.

At the time the purchase was executed by Linkbey, a Jersey company controlled by Mr O'Brien. These days ownership of the hospital is vested in Mr O'Brien's Isle of Man company Sayum Holdings Corporation, which owns 80 per cent of Beacon Medical Group Sandyford, according to filings. The remaining 20 per cent is held by Beacon Medical Holdings Ltd, whose shareholders include Mr Cullen and Prof Redmond. Other shareholders of this entity include Lucy Gaffney, a close business associate of Mr O'Brien for decades.

At the end of 2019, the Beacon group of hospital companies owed €131 million to Sayum and Beacon Medical Holdings. The group also rents various properties from Mr Cullen and Prof Redmond or their companies and car park spaces from an entity in which they are shareholders.

All eyes now are on Mr McCague.