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Government & policy

WRHA accepted “brown envelopes” in tenders

WINNIPEG – A political fracas has broken out concerning the Winnipeg Regional Health Authority and its controversial “brown envelope” policy of accepting money and other benefits from medical equipment suppliers who are awarded contracts.

Political critics are calling 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.

An investigation by the Winnipeg Free Press found that 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 would not provide a detailed breakdown of which medical supply companies provided unrestricted funds or other grants once they were awarded a contract, or how the money was spent.

According to the Free Press, 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.”

Arthur Schafer, University of Manitoba professor of ethics, said an easier way o 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.