September 24, 2019

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'Brown envelope' gifts blasted

Critics want audit into over $20M in extras from suppliers to WRHA

Hey there, time traveller!
This article was published 2/2/2009 (3885 days ago), so information in it may no longer be current.

Winnipeg health officials came under fire for their controversial "brown envelope" policy Monday, as critics called for an immediate audit into how the city's health authority spent more than $20 million it received from medical suppliers who won health contracts.

The money and gifts fall under the Winnipeg Regional Health Authority's "value-added" policy -- a practice that falls in an ethical grey area and states that WRHA senior management may accept money and other benefits given out by medical suppliers awarded contracts.

Tory Leader Hugh McFadyen slammed the policy's potential to corrupt the tendering process, and said he will ask the provincial auditor to investigate all money received. McFadyen said the NDP government should condemn the WRHA's current practice and that he wants to know which companies gave money, where the money went, and whether the "extras" in brown envelopes influenced who won the contract.

A Free Press investigation revealed the WRHA has accepted more than $20 million in money, equipment and other gifts handed over in brown envelopes from medical suppliers who won contracts in the region since 2000. Health officials will not provide a detailed breakdown of which medical supply companies provided unrestricted funds or other grants once it was awarded a contract, or how the money was spent.

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Hey there, time traveller!
This article was published 2/2/2009 (3885 days ago), so information in it may no longer be current.

Winnipeg health officials came under fire for their controversial "brown envelope" policy Monday, as critics called for an immediate audit into how the city's health authority spent more than $20 million it received from medical suppliers who won health contracts.

The money and gifts fall under the Winnipeg Regional Health Authority's "value-added" policy — a practice that falls in an ethical grey area and states that WRHA senior management may accept money and other benefits given out by medical suppliers awarded contracts.

Tory Leader Hugh McFadyen slammed the policy's potential to corrupt the tendering process, and said he will ask the provincial auditor to investigate all money received. McFadyen said the NDP government should condemn the WRHA's current practice and that he wants to know which companies gave money, where the money went, and whether the "extras" in brown envelopes influenced who won the contract.

A Free Press investigation revealed the WRHA has accepted more than $20 million in money, equipment and other gifts handed over in brown envelopes from medical suppliers who won contracts in the region since 2000. Health officials will not provide a detailed breakdown of which medical supply companies provided unrestricted funds or other grants once it was awarded a contract, or how the money was spent.

Documents show the WRHA received more than $2.2 million in unrestricted cash from suppliers that was allocated to other accounts as an extra source of funding — including the corporate department, which accepted more than $1.1 million. The WRHA has also accepted more than $17.9 million in other funds put toward research, equipment and hospital programs at the discretion of the medical supply company, including thousands of dollars that went toward equipment and operating costs of surgery and critical care.

"This is a practice which is not in any way appropriate, and one which gives rise to serious questions about how contracts are awarded within the health authority under the NDP government," McFadyen said. "The signal it sends throughout the system is that if you're involved in awarding contracts it's acceptable to receive personal benefits."

WRHA CEO Dr. Brian Postl defended the practice Monday, saying it keeps any extras out of the bid so it doesn't have any influence on who gets the contract. While other organizations — like the City of Winnipeg — require all value-adds be outlined in the tender bid, Postl said including that information could distort how health contracts are awarded.

He said Manitoba Health knew the WRHA had extra income flowing in from medical suppliers, but that the money has nearly dried up since the region decided to stop taking restricted value-adds.

"I think they're trying to politicize something that isn't necessary... there's no impropriety here," he said.

Liberal Leader Jon Gerrard called the policy "disturbing" and said it raises serious questions about whether the WRHA has been paying more than it should have for certain contracts or if they've accepted health products that aren't in Manitobans' best interests.

"I think we need to know more about what's happening," Gerrard said. "We've had a huge increase in health-care costs and it raises concerns that sometimes we've been paying more than we should have."

Health Minister Theresa Oswald said she doesn't object to accepting unrestricted funds from firms who want to be "good corporate citizens" and that the WRHA is a Canadian leader in its attempt to limit the relationships between doctors and medical suppliers by removing value-adds from the bidding process.

She said the WRHA's plans to force doctors to disclose any money or other benefits they've received from medical suppliers should eliminate the entrenched practice and increase accountability.

"It is ironic that the WRHA is vilified for trying to change a culture that has existed for so long, for trying to be transparent," Oswald said.

Arthur Schafer, University of Manitoba professor of ethics, said an easier way to eliminate conflict of interest is to get rid of a policy that allows the WRHA to accept gifts, period. He said there is no "free lunch" and doctors and the WRHA shouldn't be taking any gifts.

"The minister (Oswald) seems ignorant of the large body of evidence demonstrating that when drug companies fund hospitals and doctors they are buying influence," he said.

jen.skerritt@freepress.mb.ca

What we know:

The WRHA accepted more than $20 million in money, research and equipment from medical suppliers who won contracts since 2000. Documents show some of the money went toward the operating costs of hospital programs — like surgery and cardiology — and that some unrestricted funds went toward the corporate department.

What we don't know:

Which suppliers gave the WRHA money or other benefits;

What, specifically, the money was spent on;

Whether this practice influenced how contracts were awarded. WRHA officials say the practice has no influence on who wins a competitive bid since the envelope is opened after the contract is awarded. Critics allege there is a perception of impropriety and that the policy may corrupt the tender process.

 

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