Auditor general slams travel-nurse contracts, says Vitalit withheld information

New Brunswick's auditor general is criticizing the Vitalit health authority for its handling of $123 million in travel-nurse contracts and for its refusal to hand over key information about the agreements.

Paul Martin acknowledges in his audit that the health system was facing dire staffing shortages in 2022 when the authority signed its first contract with Canadian Health Labs.

But he says the deployment of travel nurses in Vitalit's hospitals "did not correlate with staff absences due to COVID-19" one of the main rationales provided for the reliance on travel nurses or with unplanned staff absences.

"The contracts with private nursing agencies were not reflective of best practices and did not demonstrate value for money," Martin said.

What is "quite scary," he told MLAs Tuesday, is that the current Canadian Health Labs contract with Vitalit allows the company to deploy nurses "regardless of the actual need" and still be paid up to $85 million during the life of the agreement.

"They're going to get paid money this year if you don't use them," he said.

At the same time, when the contract expires in 2026it can be automatically renewed up to five times if the company meets bilingualism thresholds.

"I bet a lot of people would love to get a contract like this, and I would challenge government to do better way better. This is not good."

'Lack of ownership' demonstrated, saysAG

Vitalit said in a statement that most of Martin's recommendations are already standard practice, "while others will be implemented in the coming days."

The authority claimed, incorrectly, that Martin failed to mention "the emergency situation" in health careat the time the contracts were signed along with other "information and testimonials" not reflected in the audit.

In a response published as an appendix to his report, the health authority disputes many of Martin's findings which Martin in turn rebutted during his appearance Tuesday at the legislature's public accounts committee.

He said given the health authority's pushback, his office was unable to reach conclusions about whether it agreed with the findings.

WATCH | 'This has to be fixed':

Im shocked: auditor general on Vitalits travel nurse contracts

4 months ago

Duration 1:45

New Brunswick Auditor General Paul Martin says costly contracts did not provide good value to taxpayers.

"We are very concerned with the lack of ownership for the issues identified and unwillingness to clearly accept our recommendations," he said.

The health authority is a large organization spending huge amounts of money to provide health care to New Brunswickers, he said.

"The oversight and accountability for those funds requires significantly more due diligence than what has been demonstrated to us during our work."

In Question Period, Premier Blaine Higgs said he was "disappointed" with what Martin uncovered and called on both health authorities to follow the recommendations.

"I do take responsibility because it's not acceptable," Higgs said.

"It's clear that the contracts that were signed were not the best value for the taxpayers of New Brunswick."

Social Development Minister Jill Green said she and Health Minister Bruce Fitch have been working with government lawyers from the attorney general's office on "how we can extricate ourselves from these contracts."

At the end of Tuesday's public accounts committee meeting, MLAs from all three parties voted unanimously to call Vitalit, Horizon Health, and the departments of social development and health to testify before June 30 about the contracts.

Progressive Conservative MLA Jeff Carr called Vitalit's approach "an insult" to taxpayers.

"What I'm seeing here with the lack of accountability flies in the face of what our government stands for," he said.

"I really worry about the signal it sends to the rest of the good people in the system."

Liberal MLA Benoit Bourque, a former health minister, said Martin's audit was"by far the most scathing report" he'd seen during a decade in politics.

"This is beyond words."

Green Party MLA Megan Mitton told Martin that Canadian Health Labs must be "laughing all the way to the bank. They have had quite a lucrative time in New Brunswick so far."

Martin also foundno proper bidding process, no legal review of the contracts and no review before Canadian Health Labs was paid for its travel nurses in long-term care homesunder a separate contract with the Department of Social Development, the audit says.

His audit also criticized Horizon Health's travel-nurse contracts but said it did a better job ensuring that the services it was paying for were delivered.

He contrasted Horizon's approach with Vitalite's decision to hire Canadian Health Labs without a bidding process, noting Horizon was able to choose among proposals from 37 travel-nurse agencies and did not pick that company.

"It seems like there's some fish in the pond," he said.

Martin casts doubt on Vitalit's rationale for its heavy spending on travel nurses: that French-speaking nurses are harder to recruit, which createda more severe shortage at the health authority's facilities, which operate in French.

The auditor general says the contract required that Canadian Health Labsprovide only "limited" service in French in some hospitals.

Won't rule out court action

He also says Vitalit refused to give his office three internal audits it conducted itself into its contracts with the company, a violation of the Auditor General Actwhich says the office is entitled to "free access" to all documentswhether they're confidential or not.

"Due to the lack of co-operation from Vitalit, risks that they identified in the audit reports and to what extent those risks were addressed is not known," Martin's report says.

"It is critical that government organizations understand the powers of the Auditor General and comply with the Auditor General Act."

Martin told MLAs that he wasn't ruling out going to court to force the health authority to turn over the three internal audits.

Vitalit said in its statement it had been "irreproachable" in its co-operation with Martin's office and the three audits were withheld only because the health authority "is in the midst of a dispute with one of the companies targeted in this investigation" and sharing them might have hurt negotiations.

In its rebuttal in the audit's appendix, Vitalit says its use of travel nursesallowed it to avoid:

• The closure of the Campbellton Regional Hospital's emergency department.

• A two-thirds reduction in emergency capacity at Moncton's Dr. Georges-L. Dumont University Hospital Centre.

• The closure of the Restigouche Hospital Centre, the province's forensic psychology facility.

"The network had to act quickly to counter the nursing shortage," it says.

$98M in contracts with one company

Martin's audit did not include an examination of the Department of Health's role because it did not sign any travel-nurse contracts, he said.

He addedthat Tuesday's audit was only "a piece of this" but he wanted to get his findings out quickly, and his office may do more work on travel nurse issues in the future.

The total value of all travel contracts with 10 companies was $173 million, Martin said.

The largest amount was $98 million for three contracts between Vitalit and Canadian Health Labs.

The company's CEO, Bill Hennessey, said in an email he was travelling Tuesday and would likely be unable to respond to questions.