Sociologist, local councillor, activist from Malta

Monday, August 08, 2016

Public Health Through Privatization


The government’s new ventures in public-private healthcare seem to have escaped the degree of public attention that was given to other issues. This is rather paradoxical, when healthcare is a basic need in modern welfare states.
Malta’s healthcare system has made huge advances in the past decades, even though it has its fair share of problems related to sustainability, equity and management. I think that current Minister for Health Chris Fearne is well-intentioned and has a professional disposition to tackle such matters.
But new public-private ventures seem to be under Konrad Mizzi’s sphere of influence. In this regard, I am hereby referring to the government’s partnership with Vitals, a company owned by Bluestone Special Situation 4 Ltd, erstwhile registered in the British Virgin Islands and quite unknown in the health industry. Maybe Malta will be their trampoline to success? Vitals will be developing and managing the Gozo, Karen Grech and St Luke’s hospitals through a public-private partnership with the government. In theory, such arrangements can benefit from the efficient private management of public resources.
The ELC consortium in Malta is an example of such an arrangement. Public workers and private management are paid through government and local council funds for the upkeep of soft areas around the island, with the aim of making Malta a ‘garden city’, as former prime minister Eddie Fenech Adami put it when this consortium was launched.
In the case of the Vitals deal, the Times of Malta has revealed that Gozo’s hospital has been effectively privatised for 99 years, at the cost of €2.15 per square metre in ground rent per year. If after 30 years Vitals chooses to retain the property for a further 69 years, the ground rent will rise by 0.64 cents per square metre, and go up again by five per cent every other five years.
The theory is that the government will save money by using private management instead of the usual public services for an expanding sector
At the same time, Vitals will be investing around €220 million to build a new 450-bed hospital in Gozo and will be creating 320 beds in Karin Grech and 350 at St Luke’s, while refurbishing the site. Some may call this a smart way of attracting foreign investment. Others will say that Maltese public property is effectively being given to big business at dirt cheap prices.
Vitals will be making money through medical tourism and through government’s purchase of its services for Maltese patients. So the theory behind this arrangement is that the government will effectively save money by using private management instead of the usual public services for an expanding sector. The impact of this on services to patientsand workers’ conditions is as yet unclear, especially since to date there is a lackof information.
Indeed, other aspects of this partnership are not so clear. The government has promised to publish the contract in November, so one can only speculate at this stage.
Why should all this concern Maltese society, when the government is promising more sustainable services while attracting foreign investment? Wouldn’t taxpayers benefit if public resources are used more efficiently?
At this stage, and judging by similar experiments in other countries, one can identify some possible opportunities and risks in this process.
Opportunities, apart from those mentioned above, would include access to health care for foreign patients who, for one reason or another, cannot pursue their medical needs where they reside. Such medical services can become more personalised. From a business perspective, medical tourists can thus provide valuable source of revenue which can help finance other less lucrative services.
So far so good. But what if such revenue becomes increasingly vital for the company’s profits? Will services to medical tourists be given priority over services purchased by the government for public services? Will this result in unequal health services? Can this result in resentment by taxpayers, many of whom already have to pay for private insurances to get a better service in Malta?
Given Konrad Mizzi’s lack of good-governance, lack of accountability and lack of transparency, it is not easy to be optimistic about the whole process. Maybe I am wrong, and I hope I am.

1 comment:

Noel Agius said...

I smell a rat in this. Medical tourism is the new tourism. Gulf states are especially into this hoping to attract the well off from poorer Arab countries. This means Malta's focus will be on North African states especially Libya. Because of all the troubles in that country the wealthy have formed a world wide diaspora. Libyans are now scattered enough that going to Malta for medical reasons will not be an obvious choice. They again there are many here at the moment.

However the crunch is that the private company running the hospitals must look after the bottom line and that could easily mean poor working conditions for staff, and not looking after patients as much as they should, especially the Maltese who are less economically lucrative.