Ont. apologizes for consultant hiring

Ontario Health Minister Deb Matthews apologized to taxpayers Wednesday after the auditor general found provincial hospitals still aren't following the rules on hiring consultants.

Auditor General Jim McCarter's findings come despite similar problems at eHealth last year that forced the resignation of the minister's predecessor, and despite promises from the government to rein in the use of consultants in the health-care sector.

McCarter's special report found hospitals, local health networks andMinistry of Health itself still hire consultants without competitive bidding, and still don't properly monitor the consultants' fees.

"I'm not afraid to say I'm really sorry that this has gone on," Matthews said. "I don't think this is acceptable. I don't think that we have been as accountable as we ought to have been."

McCarter was asked to investigate the rest of the province's health-care sector after last year's special report into eHealth Ontario, which found the agency tasked with creating electronic health records spent $1 billion but produced little of lasting value.

Matthews was at a loss to explain why hospital chief executive officers, who earn between $500,000 and $750,000 a year, failed to learn anything from last year's scandal at eHealth. She asked the auditor if he thought any hospital executives should be fired, but he said no, added Matthews.

"The government of Ontario does not hire, and cannot fire, hospital CEOs," she said. "We are sending a very strong signal to hospitals today, to hospital boards, to hospital executives, that they better look very closely at what they are doing and we expect them to do far better."

There were far too many examples where consultants were engaged by hospitals and local health networks without tender and without proper oversight, McCarter said in his report.

Mirrors eHealth scandal

As just as in the eHealth scandal which saw then health minister David Caplan resign the portfolio consultants were once again billing taxpayers for expensive dinners, alcohol, phone bills and luxury hotel rooms around the world.

The opposition parties noted Premier Dalton McGuinty apologized after the eHealth scandal and said he would close the loopholes around the use of outside consultants in the health-care sector.

"The auditor's report reveals he not only didn't close the loopholes, he opened the doors so wide that millions more went to Liberal-friendly consultants," said Progressive Conservative critic Christine Elliott.

"Why should Ontario families believe that anything will change this time around?"

The New Democrats expressed outrage that health-care money was still being spent on outside consultants while the province reduced health services in some areas.

"For families watching local health services vanish, today's report by the auditor general was a slap in the face," said NDP Leader Andrea Horwath.

"It's a damning indictment of how well-connected insiders made off with millions of dollars at the same time as families in Hamilton and Niagara were losing emergency rooms."

One hospital paid a consultant $170,000 for two years of expenses on top of contracts worth $608,000 but when auditors asked for receipts, the consultant wanted another $3,000 to produce them. The hospital wouldn't pay, so it never got the receipts, said McCarter.

The report found another hospital hired a consultant at a cost of $163,000 and the firm got six untendered follow-up contracts worth $1.1 million.

Yet another hospital single-sourced a consulting firm to develop a health information management system and for three years paid $398 an hour $2.6 million in total with no fixed ceiling price. The company then got another $975,000 and will get another $735,000 this year.

"We noted that it was the firm that prepared the budgets for this project, and the appropriate hospital authority had not signed agreements with the firm," wrote McCarter.

Hiring 'favourite consultants'

Other hospitals have been hiring outside consultants to act as hospital executives CEOs, vice presidents and chief financial officers along with bonuses, vacation pay and even termination payments between $100,000 and $170,000.

"In contrast, our experience has been that in typical consulting-services contracts, the termination clauses often provide 30 days notice with no payout required," wrote McCarter.

The Ministry of Health follows competitive bidding but still manages to hire favoured consultants, headded.

The government will introduce new expense and procurement rules, and could dock the salaries of top executives at hospitals and LHINs if the rules aren't followed, said Matthews, who promised to implement all of the auditor's recommendations.