Healthcare leaders will join hospital board

Move seeks to address CarePay audit concerns

Roy McTaggart

Four senior medical and civil service officials will be placed on the Health Services Authority board of directors in order to “help avoid the mistakes of the past,” according to Health Ministry Councilor Roy McTaggart.

The board, which governs operations of the public health authority, currently has seven members, all representing the private sector. Board membership, previously consisting of all civil servants, was changed about a decade ago to place more private sector financial expertise at the struggling entity.

Proposed amendments to the Health Services Authority Law now seek to expand the membership to 11, adding the positions of chief officers for the ministries of health and finance, as well as the health authority’s chief executive and its medical director. The other seven directors will be appointed by the government and must demonstrate “substantial knowledge and experience” in certain areas, including healthcare.

The amendments are due to come before the legislature next month.

The operations of the board fell into disrepute earlier this year when former chairman Canover Watson was convicted of conspiracy to defraud the government in a scheme with his business partner Jeffrey Webb. Watson was found guilty in February of doctoring contracts submitted separately to various government agencies at different times, leading to the ultimate payment of $1.8 million for nonexistent healthcare contracts by the Health Services Authority.

A government special investigation audit completed in June following Watson’s conviction revealed a number of areas where communications between the Health Services Authority board and senior health managers at the hospital, as well as the Cayman Islands National Insurance Company, had broken down. For instance, during Watson’s criminal trial it was revealed that neither the head of CINICO nor the HSA manager had read a US$13 million, five-year contract for the agency’s patient swipe-card system – known as CarePay – before signing it in December 2010.

Those managers were unfamiliar with the original agreement, when in 2011, prosecutors said a doctored version of it was given to government officials, including millions in payments for the contract that had never been agreed.

Some of the purported payments for the CarePay contract, it was revealed in court, went to pay off a home loan for Webb in Loganville, Georgia, while other funds were transferred to pay off Watson’s personal bills.

Internal auditors reviewing the matter recommended the need to establish formal communications between the Health Services Authority and the Ministry of Health beyond what is normally done each year during the government budget process.

“Such communications should set out clear expectations for policy directions and should facilitate effective identification of high-risk issues and notification to the chief officer and the Minister of Health on key impacting issues within a timely manner,” auditors stated. “Communication of pertinent information that affects the management of the HSA should involve the board as well as the CEO of the HSA.”

Auditors also strongly criticized the HSA for allowing Watson to be appointed as project leader for implementing the CarePay system, a highly technical and specialized IT endeavor, bypassing former hospital IT chief Dale Sanders.

“The chairman of the board of the HSA or any other statutory authority should not be assigned operational roles for the implementation of policies, such that the assignment could result in conflicts with the roles and duties of senior management within that entity,” the Internal Audit Unit report stated.

“It is important that we facilitate the interaction between the Health Services Authority and the Ministries of Health and Finance to keep abreast of ongoing work,” said Premier Alden McLaughlin, who is also the health minister.

CarePay fallout

The failure to properly implement the CarePay patient swipe-card system and its associated payment adjudication function has significantly affected the health authority’s ability to collect overdue bills, Auditor General Sue Winspear said last week.

The CarePay contract was canceled in late 2014 after Watson’s arrest on fraud and corruption charges.

Ms. Winspear told the Legislative Assembly’s Public Accounts Committee that the system was “intended as a solution to patient collection difficulties.”

“The resultant termination … has inevitably set back progress,” she said. The Health Services Authority provision for “doubtful debts” (those older than a year) has increased from $45 million in 2013 to $90 million as of June 30, 2016.

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  1. Four senior medical and civil service officials will be placed on the Health Services Authority board of directors in order to “help avoid the mistakes of the past,” according to Health Ministry Councilor Roy McTaggart.

    Again no accountability. Mr. Watson takes all the blame? Where was the Ministry of Health when this craziness was going on?

    Allow me to lend some Caymanian insight. A fish rots from the head down.