HEALTH:STATE ASSETS were used as collateral by a voluntary hospital group in an effort to secure funding from commercial banks, the report found.
The St Vincent’s Healthcare Group, which operates the publicly funded St Vincent’s University Hospital in Dublin, used the assets as security in return for facilities from the banks, including to pay for a new private hospital, the comptroller’s report states.
It says that these arrangements included a mortgage debenture in favour of Bank of Ireland agreed in October 2010 which involved a fixed charge over the entire St Vincent’s site and a floating charge over all the undertakings, property and assets of the group, both at present and in the future.
Other arrangements included a mortgage debenture granted over property at its location in Elm Park in south Dublin to Bank of Ireland in respect of the development of a new private hospital by the group and security granted in favour of Ulster Bank in 2002 by a group subsidiary company over a car park on the public campus.
The report says that up to 2009, the State through the Department of Health and the HSE had provided approximately €200 million in capital funding to the St Vincent’s Healthcare Group for redevelopment and refurbishment of the hospital campus.
It says that as part of an agreement for the provision of a new €29 million ward block at St Vincent’s, the HSE had sought to put in place an arrangement under which it would have been entitled to buy in the entire publicly funded facilities in the event of the group failing to provide public health services at the facilities.
However, it says it had become clear that the St Vincent’s Healthcare Group could not grant the required option “because part of the publicly funded facilities had been charged already in favour of Bank of Ireland and Ulster Bank”.
“Furthermore the [HSE] accounting officer told me it had become clear because of commitments already made by St Vincent’s Healthcare Group to tax investors in a private hospital on the campus that, during the lifetime of the investment, St Vincent’s Healthcare Group could not grant the HSE a security interest over publicly funded facilities nor a negative pledge not to dispose of any interest in lands on which they were sited.”
The comptroller says the situation at St Vincent’s illustrates a hazard that attaches to the provision of services through fully subvented or near fully subvented private institutions.
“Their freedom to pursue their other objectives may be exercised in a way which does not protect the State’s financial interest.”
Separately, the report says that last year €16 million was paid to pharmacists in cases where the patient’s medical card had expired. Nearly €10 million was paid in respect of prescriptions in cases where a medical card number was either missing or incorrectly recorded.
The report also maintains that the HSE made excess payments of nearly €1.5 million to GPs due to a time delay between the death of a patient and the introduction of amendments to the capitation payment for the doctor.
