The Health Service Executive has made a bad debt provision of €42.5 million arising from advance payments it made for ventilators last year that it ended up not receiving or not being able to use.
State financial watchdog the Comptroller and Auditor General said the HSE had sought to purchase additional ventilators to increase its capacity to treat patients with respiratory symptoms as the Covid-19 pandemic hit early last year.
In a report, it said suppliers of such equipment with which the HSE had previously dealt had only been in a position to provide a limited number of the additional ventilators needed.
Hospital Report
The comptroller’s report said the HSE turned to companies with whom it had not dealt previously and made advance payments of €81 million to 10 different firms.
“Two of the companies fulfilled the orders placed by the Executive, and another company delivered a small part of the order it had received. Subsequent to the deliveries, the Executive decided it would not be appropriate to deploy the machines that had been received. The outstanding orders were cancelled, and refunds were sought,” noted the report.
“At the reporting date, the Executive had not received value or refunds in respect of the full amount pre-paid for ventilators in 2020. A provision in the amount of €42.5 million has been made in this regard in the revenue income and expenditure account,” stated the comptroller’s report, dated May 28th.
The HSE's annual report, which was laid before the Oireachtas in recent days, said it has begun legal action over the issue.
"Ventilators were key to treating Covid-19 patients in the height of the pandemic and therefore all measures were taken by the HSE on the behalf of the citizens of Ireland to ensure that there was a pipeline of orders to avoid shortages. Due to the market conditions, demand, and volatility the only way to secure orders from overseas suppliers was to make payments in advance," it said.
Write-down of €370m on PPE
Separately, the comptroller’s report provides further details on the €370 million write-down by the HSE on the value of personal protective equipment stocks (PPE) bought by health authorities last year.
The Irish Times reported on Friday that this included a loss of €64 million on protective suits which are now considered to be effectively obsolete. The comptroller’s report suggests the HSE may be unable to use about 2.5 million of these suits prior to their expiry date.
A separate report on the issue by auditors KMPG, which was given to Minister for Health Stephen Donnelly last week, said this equated to 41 years' supply of such suits.
The comptroller’s report stated: “The Executive purchased a total of 4.4 million suits, at a cost of €112 million, or an average of €25.50 per unit. An estimated 1.4 million units were used by healthcare staff during the year, but usage rates of the suits declined when gowns became available.
“The manufacturers’ projected ‘shelf life’ of the suits is three years. The Executive has estimated that, at most, it is likely to use only 480,000 (16 per cent) of the suits on hands at the end of 2020 within the shelf life period. Accordingly, a provision for anticipated obsolescence of 2.5 million surplus suits has been charged to the 2020 revenue income and expenditure account. The amount of the provision is €64 million.”
The KPMG report, which was commissioned by the HSE on foot of a request from the Minister, said that at the start of the Covid-19 pandemic in early 2020 a hypercompetitive "sellers' market" for PPE developed internationally as countries competed for stocks.
It said the HSE secured an unprecedented volume of PPE in the early part of 2020 to protect healthcare staff. But it added that on occasion it was forced to accept high prices and, in some cases, higher- than- ideal order volumes.
