“We took our eye off the ball”, the head of the HSE Bernard Gloster acknowledged as he sought to explain how the practice known as third-party insourcing had expanded into a multimillion euro industry living inside the public hospital system.
A report he had drawn up for Minister for Health Jennifer Carroll MacNeill revealed that in 27 months to the end of March this year, close to €100 million had been paid out on engaging external companies that use HSE-owned facilities and equipment after normal working hours – in many cases employing existing health service staff – to reduce public waiting lists.
The report reveals 83 serving or former health staff are acting as directors in 148 companies providing what are known as insourcing and outsourcing – another system which involves buying care in outside private facilities – arrangements to reduce waiting lists.
It says 23 of these company directors are employed by the HSE.
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Gloster told the Oireachtas Joint Committee on Health that over two decades insourcing arrangements had grown from “a small localised thing” to a level where the health system was now overly dependent on it.
“People saw opportunities, entrepreneurially,” he said, although he stressed there was nothing unlawful about being a company director.
He defined insourcing as the practice of engaging external companies or third-party providers to deliver services, often outside of normal working hours, using HSE-owned facilities and equipment.
“In many cases, these providers may employ or subcontract staff who are already directly employed by the HSE, effectively re-engaging internal staff through a separate commercial arrangement, typically at premium rates.”
The availability of such premium payments for working for insourcing companies, the HSE chief acknowledged, also made regular overtime less attractive.
Gloster told Fianna Fáil TD Martin Daly that the focus of hospitals in embracing insourcing had been a rush to do the right thing and reduce waiting lists.
However, he argued that the effective governance of insourcing arrangements became “quite questionable”.
Over recent weeks, there have been significant controversies surrounding insourcing arrangements at Children’s Health Ireland, Beaumont Hospital and – the public was told for the first time on Wednesday – at Naas General Hospital. Internal auditors have been sent into Naas to look at concerns over the use of National Treatment Purchase Fund financing.
Gloster concluded, following his analysis of the scale of insourcing, that it was now time to wind down the whole process.
He has recommended to the Minister that insourcing should end by June 30th, 2026.
It cannot be shelved immediately as this would leave patients relying on such services in the lurch. But in the meantime, new controls and safeguards will be introduced.
Gloster’s plan is for the regular health service to carry out the work previously carried out by insourcing, using new, more flexible rosters now agreed with hospital consultants and other healthcare staff. But he warned that if a gap remains, it will have to be filled by sending more public patients to be treated in private hospitals.
Ultimately, Carroll MacNeill is expected to decide on whether to call a halt to the insourcing train – which would appear to generate close to €50 million per year for those on board – by the end of July.
However, the investigations into allegations of concern at Children’s Health Ireland, Beaumont and now Naas arising from insourcing arrangements will likely run a lot longer.
