Josie Muscat calls for inquiry into new hospital costs - The Times - 10/12/2003

St James Hospital managing director Josie Muscat has called for an independent investigation into why costs at the new Mater Dei Hospital "have spiralled out of control", contributing to the sudden unsustainability of the health system.

The government should put the project on hold and stop raising taxation, Dr Muscat told The Times in an interview.

Dr Muscat was speaking after Finance Minister John Dalli in his budget speech announced a series of measures intended to inject much-needed funds into the ailing health sector.

But Dr Muscat said that before pumping more money into what seemed to be a bottomless pit, the government should have the courage to put the new hospital on the back-burner, perform a reappraisal and, when the financial situation permits, finish it off.

With three years to go to the inauguration of the hospital the cost being cited was already Lm200 million, way above the Lm20 million originally planned, Dr Muscat said.

"What we seem to care about is how much a project costs, when what we should be saying is how much it costs, why it costs so much more than projected, and who is responsible for such a miscalculation."

He stressed that the budget will fail to heal the sector because "the government has the wrong diagnosis of the patient, and it is giving him the wrong medicine".

"When a doctor is faced with this situation he is either going to continue stubbornly administering the wrong medicine or admits he needs to stop, re-evaluate, reinvestigate and change accordingly, or call in the consultant to establish the problem and choose the best course of action.

"No serious entrepreneur would justify that kind of cost. It does not make economic or financial sense," he charged.

Dr Muscat asked whether it would actually turn out to be cheaper to delay the hospital project and pay penalties to the designers and builders rather than continue forking out millions for the project.

"What's cheaper? Raising VAT and stifling economic expansion across the board in the process, or pay a penalty for just one project?"

Dr Muscat believes that the real shock will be felt when the actual running costs of Mater Dei are established.

"I assure you the Lm1.2 million a week estimated to run the new hospital is wrong. And then, who will pay for the shortfall?

"The problem is not the building, but the bureaucracy, inefficiency, and blatant abuse of the health system across the board," Dr Muscat said.

Furthermore, if the government decided to open private wards at Mater Dei it would effectively be sealing the fate of the existing private hospitals, he said. A country of fewer than 400,000 inhabitants was already over saturated with hospitals, health centres and private clinics.

St James Hospital employs some 300 people (more than two thirds of the private health sector) and operates from Zabbar, Capua Hospital in Sliema, a cosmetic dedicated clinic in Attard, an outpatient and diagnostic department in Mosta, and a day surgery hospital in Gozo.

Dr Muscat said it was worth noting that since taking over a year ago, St James Hospital had managed to turn the deficit at Capua Hospital into a marginal profit while making a capital investment of over Lm300,000.

"We don't expect to be thanked for this. But it shows that while the private sector can do it, it would benefit the government to stop treating us like competitors. It would benefit both sectors if we worked together as partners."

Dr Muscat said he was prepared to sit around a table to work with the best of intentions. No sector, he stressed, needed to bail the other out.

SJH could offer a helping hand to the government to deal with its long list of hip and knee replacement operations and eye surgery. The only time the government really cooperated with the private sector was when it had a long waiting list for heart surgery during the former Labour administration.

SJH was willing to venture into new fields, but it could not rely on the inefficiencies of the Health Department. Suffice it to say that some time ago, SJH had applied to the department to open an intensive therapy unit and coronary care unit, and still had not received an acknowledgement, let alone a go-ahead, Dr Muscat said.

"The government has introduced several costly measures to keep us up to standard and on our toes, which is a good thing in itself, but it should first put its own house in order. If they want to control our standards, by all means, because for us speed means money."

State health was still ingrained with bureaucracy, which drained creativity and energy, Dr Muscat lamented.

One had to keep in mind that private hospital costs were sky-high, compared to government services, which were zero VAT-rated.

Dr Muscat also hit out at a legal notice, which came into force yesterday, which effectively introduced a cost for the provision of blood products to private hospitals. Private hospitals would have to fork out Lm38 for a bag of red blood cell concentrate. Major operations might require some three bags of such concentrate.

The budget had increased costs for patients and could potentially affect the customer base of private hospitals.

"We've been investing tremendously to tap the foreign market in Libya, but such costs are going to dent our chances of competing with countries like Tunisia, Lebanon and Jordan. We are even more expensive than Cyprus."

The crux of the problem however, according to Dr Muscat, was the situation with doctors and specialists.

The government needed to curb abuses and create a clear demarcation between the private and the public sector. "This is how Italy solved its health abuse problems. It's no use blaming the unions or the doctors. Who's in charge?" he asked.

On a positive note, Dr Muscat welcomed the fact that the Finance Ministry would be asking foreign insurances to pay for insured patients who receive treatment in state hospitals.

"This is very fair as long as the government charges the right amount and does not undercut its charges, otherwise we'd remain in a status quo."

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