The government spent a total of at least €47 million on outsourcing services from three of Malta’s leading private healthcare operators since sweeping to power in 2013, an investigation carried out by this website can confirm.
In March, this website published another investigation which showed that a group of companies associated with Louis Buhagiar – former parliamentary secretary for the elderly in Alfred Sant’s administration in the nineties – made €34.7 million in public contracts since 2014.
To further understand the government’s level of dependence on private healthcare providers, we ran an identical analysis of contracts awarded to two other major operators: St James Hospital and Da Vinci Hospital.
What we found further contextualised Buhagiar’s previous claim that the four facilities owned by his family (St Thomas Hospital, Good Samaritan Hospital, Jasmine Nursing Home, Casa Serena) “are far from being the largest recipients of such contracts.”
Among the three operators under analysis, the Buhagiar family’s total public procurement income from its four facilities is three times as much as that of its nearest competitors, St James Hospital.
After initial queries were amended to reflect updated estimates of the numbers below, Louis Buhagiar sent in a brief response:
“I notice your remarks. All contracts awarded to us were competitive, issued publicly and widely accessible. Other providers had every opportunity to apply. They did not or were not competent or were not eligible for such tenders. If you research your fact (sic) you will find that your insinuations are incorrect,” the written answer reads.
St James Hospital was awarded a total of €10.7 million in public contracts. The subsidiary company which runs St James’ hospitals and clinics, St James Ltd, was awarded €5.5 million, 35 of which were direct orders. The other three were issued as tenders.
St James Hospital group’s subsidiary trading company, Jamesco Trading Agency Ltd, was awarded an additional total of €5.2 million in public contracts: 33 direct orders worth €541,431, and 83 tenders worth €4.7 million.
A request for comment sent to St James Hospital remained unacknowledged by publication time.
Da Vinci Hospital is the smallest of the lot, raking in a comparatively modest €1.8 million from 12 direct orders. A request for comment sent to Da Vinci Hospital also remained unacknowledged.
Click here for a larger version of this data chart
Click here for a larger version of this data chart
Click here for a larger version of this data chart
Click here for a larger version of this data chart
As can be seen from the data above, most of the public contracts awarded to St James Hospital and Da Vinci Hospital were related to either the COVID pandemic or the outsourcing of MRI machines and operating theatres.
Though this investigation is not the first instance in which the government’s financial relationships with private healthcare operators like St James and Da Vinci were reported, it is the first time anyone provided a cumulative estimate that represents the government’s spending on these operators’ services.
The initial interest for this investigation stemmed from an announcement made by health minister Jo Etienne Abela in the beginning of the year.
Abela had announced that the government would be forking out €8 million to three private hospitals: St Thomas Hospital, St James Hospital, and Da Vinci Hospital. The stated aim of Abela’s initiative was to redirect patients who require minor interventions away from Mater Dei’s overburdened wards.
Our updated analysis paints a clearer picture of how that need for outsourcing has fluctuated across the years.
Generally, public healthcare has struggled to cope as demand continues to surge – in particular because of the fact that the three public hospitals ensnared in a fraudulent public-private concession remain in a derelict state.
Another investigation published by this website earlier today highlights another problem in Malta’s public healthcare system: a deliberately engineered choke point that, according to the experts whose findings were published in a magisterial inquiry, facilitated corruption in the hospitals deal.
How public healthcare became cripplingly dependent on one medical supplier
While there is nothing inherently wrong with outsourcing urgent public healthcare needs to private hospitals who can provide a high standard of services, the government’s patchwork policy making has led to questionable levels of dependence on private operators, as evidenced by the public healthcare system’s inability to cope during the pandemic.
Liabilities and connections
Left: St James Hospital’s founder Josie Muscat. Right: Da Vinci Hospital’s managing director Pierre Vassallo. Photos: Facebook
St James Hospital’s founder Josie Muscat is no stranger to media scrutiny and court troubles.
Muscat is a former Nationalist Party MP who later went on to create his own xenophobic party called Azzjoni Nazzjonali after breaking ranks with the PN in the late 1980s – a sort of spiritual descendant of a previous neo-fascist group Muscat had started, Front Freedom Fighters.
He eventually returned to the PN’s fold in 2017, but failed to get re-elected that year.
In the two years leading up to that failed bid, St James Hospital almost got caught up in the corrupt web spun by the shadowy investors behind Vitals Global Healthcare (VGH) – and Muscat was right in the thick of it.
The investigators that penned a detailed forensics report for the hospitals concession inquiry had concluded that Josie Muscat acted as a front for one of VGH’s key investors, Shaukat Ali, in a cancer treatment project that ended up costing far more than originally projected.
That same inquiry is the one that led to corruption and fraud charges against disgraced former prime minister Joseph Muscat and a slew of former ministers, officials, and legal and financial professionals.
Investigators suspected that the push for the Cyclotron project, a cancer treatment machine that produces a radioactive tracer for nuclear imaging for PET/CT scans, was originally conceived by Josie Muscat in 2014, all while Muscat mulled over the possibility of selling off his stake in St James to Vitals Global Healthcare.
In spite of heavy financial support obtained from Malta Enterprise, the original version of the Cyclotron deal fell through. Eventually, the government was forced to step in to cover the costs of a project that failed to materialise. Josie Muscat denied all wrongdoing when testifying in court last year.
Just as recently as this month, Muscat was yet again named in relation to a court case. According to a report published by the Times of Malta, Muscat is expected to face charges in relation to an alleged breach of the embryo protection law. Muscat is an IVF specialist by profession.
Convicted killer Erin Tanti, who is serving a 20 year prison sentence for the murder of Lisa Maria Zahra, managed to artificially inseminate his partner by smuggling a semen sample out of prison through as yet unknown means. Muscat, who refused to comment on his involvement in the case, allegedly carried out the procedure to artificially inseminate Tanti’s partner.
When compared to Muscat, the media presence of the managing director of Da Vinci Hospital, Pierre Vassallo, is practically negligible. Besides being managing director, Vassallo is also the sole shareholder of Da Vinci Healthcare Ltd.
The only significant example of adverse press about Da Vinci Hospital relates to a recent court sentence in which the operator was forced to pay out €79,700 in compensation to a woman who got an infection after undergoing eye surgery, losing 16% of her eyesight as a result. The hospital was held responsible for failing to adequately sterilise medical equipment that was used for the plaintiff’s routine procedure.