THURSDAY, 15 NOVEMBER 2012
~ Inspectorate cites ‘severe’ conflict of interest ~
PHILIPSBURG–Inspector General Dr. Earl Best has given St. Maarten Medical Center (SMMC) General Director Dr. George Scot fourteen days to either resign as President of SMMC’s Board of Directors or terminate the contract between his company, AnG Consultancy, and SMMC.
Best imposed this latest “demand” after continued failure by SMMC to adhere to previous “legal demands” and after uncovering “severe conflict of interest” involving Scot.
AnG Consulting N.V.
Best said in a lengthy press release last night that while the hospital was still under intensified supervision, the Inspectorate had discovered the existence of a contract signed on September 17, 2008, between AnG Consulting N.V. and SMMC, for supplying services to the hospital, such as the daily board of directors/Chief Executive Officer (CEO) for the hospital during the next five years.
Best said AnG Consulting N.V. was established at the home address of Dr. Scot, who also appears to be one of the owners of AnG Consulting N.V. and in any case the CEO of this company. The contract was signed by Scot on behalf of AnG consulting N.V. with SMMC as the other contracting party, represented by the Chairman of SMMC’s Supervisory Board at that time.
Meanwhile, the Director of the Chamber of Commerce has indicated that the service provider AnG Consulting N.V. is not registered in its Registry. Research by the Inspectorate in Curaçao, Aruba, the BES islands and even in The Netherlands shows furthermore that AnG Consulting N.V. also is not registered in any of these other countries.
The Department of Tourism, Economy, Transportation and Telecommunication in St. Maarten moreover confirmed to the Inspectorate that no business licence had been issued to a company with the corporate name AnG Consulting N.V.
Best said Scot is not only the CEO of AnG Consulting N.V., but for all intent and purposes appears to also have a financial stake in this company that is registered at his home address in St. Maarten, and seems to have been incorporated by his wife A. Scot.
Conflict of interest
Dr. Scot also was appointed as the only member of the Board of Directors of SMMC effective April 25, 2008, and functions as the Director of SMMC. Dr. Scot, in reality, thus holds two different positions related to SMMC. On the one hand he is the Director of SMMC and on the other hand he is the CEO of the “independent” service provider AnG Consulting N.V., a company wherein again he appears to also have a financial interest, Best said in the release.
Article 15, paragraph 3 of the National Ordinance on Health Care Institutions clearly states that it is prohibited for members of the Board of Directors of a hospital to have a stake in any other company that does business with the hospital.
The reason behind this law is to prevent abuse in hospitals by persons holding key positions and/or who have decisive power. The quality of care can be seriously hampered if such abuse could materialise within hospitals as a consequence of a conflict of interest.
“Dr. G.A. Scot is wearing two different hats, one as the director of SMMC and the other as the CEO or representative of the independent service provider AnG Consulting N.V. This is clearly a violation of the law.
“This conflict of interest enables abuse by a person/company who is holding a key position within SMMC, with decisive powers. Consequently, financial interests can potentially prevail over conditions to enforce a responsible quality of care,” Best said in the release.
“The Inspectorate establishes that the service agreement between SMMC and AnG Consulting N.V., managed by Dr. G.A. Scot, allows ANG Consulting N.V. (read Dr. G.A. Scot) to also render services to SMMC from abroad; does not regulate how many hours ANG Consulting N.V. (read Dr. G.A. Scot) must render services to earn a fixed monthly fee; does not, at least not directly, contain any performance standards and/or norms; stipulates that the performance of ANG Consulting N.V. will be evaluated by SMMC and thus in principle by the Director of SMMC, namely Dr. G.A. Scot.
“The service agreement itself does in any case not contain any provision to deal with this obvious conflict of interest; grants ANG Consulting N.V. the right to a yearly bonus and in case of premature termination a fixed termination compensation, if ANG Consulting N.V. receives a positive evaluation for its performance.”
Health care standards
According to the Inspector General, under the terms of the service agreement this evaluation can be performed by the Director of SMMC: Article 5, paragraph 5 of the bylaws of SMMC state that the Board of Directors of SMMC comprises one or maximum two natural persons.
“The founding fathers of SMMC clearly intended for only natural persons of flesh and blood, and not companies, to be able to manage SMMC. The Inspectorate understands that the reason for this limitation is to at all times ensure clarity and transparency pertaining to the person who actually manages SMMC, the only hospital on St. Maarten.
“AnG Consulting N.V. can therefore as a company never substitute the natural person who must render the managerial services as per the bylaws of SMMC. The investigation conducted by the Inspectorate, however, shows that AnG Consulting N.V. is in essence functioning as the director/manager of SMMC. This constitutes yet another potential violation of the bylaws of SMMC,” Best said.
He noted that several requests from the Inspectorate for clarification on these matters from the Board of Directors had been rejected on Scot’s behalf by SMMC’s attorney.
“Dr. G.A. Scot has also regretfully refused to attend a meeting called by the Inspectorate to give reason and account, stating simply again that he does not acknowledge any authority of the Inspectorate to exercise external supervision on what he calls Governance Matters.
“Contrary to what SMMC wants to stubbornly believe, the Inspectorate is bound to ensure that St. Maarten citizens can enjoy proper basic medical services by SMMC, as per internationally accepted standards.
“Exercising supervision on the governance of SMMC is not only legally codified in the law, it is the only way to ensure good quality care for St. Maarten citizens, who do not have the powers vested unto the Inspectorate, and are as such not able to act against, for example, the established conflict of interest and other violations by SMMC of its own bylaws.
“Where the health care professionals in St. Maarten haven’t defined norms and/or standards, the Inspectorate moreover has the authority, not to say the legal obligation, to apply internationally accepted minimum medical standards, in consultation with the field. These internationally accepted norms and/or minimum standards have been applied by the Inspectorate to SMMC.
“An example hereof is how many professionals must work in the ER [Emergency Room] Department of SMMC to continuously (24/7) provide efficient and good quality care, considering the approximately 60,000 citizens residing on St. Maarten.”
Best observed that Scot – the only member of the board of directors – had been off-island approximately 50-60 per cent of the time on a monthly basis for the past two years and maybe even longer. The data given is from Dr. G.A. Scot’s stay in The Netherlands alone. The Inspectorate has no data of the director’s stay elsewhere, e.g. in the USA.
“Meanwhile very important matters that determine quality of care and patient safety, such as: (i) a necessary quality management system in the hospital, (ii) performance and production by the medical specialists, (iii) medical treatment protocols, (iv) conducting periodical meetings with the Medical Staff and (v) preventive maintenance, haven’t gotten the attention they require over the past years.
“The continued lack of proper governance for the past years has led to deficiencies in critical areas, impacting the services provided by the SMMC.
“The tremendous understaffing amongst medical specialists for the past years is causing an enormous strain on the performance of those specialists, nurses and other staff members who do their utmost to provide care that complies with internationally accepted standards. Given the conditions under which they have to work, they try to prevent that suboptimal care is given.”
Best said an enthusiastic majority of the nursing staff had done a good job in keeping the wards and other departments operational, applying proper nursing standards. The actual presence in SMMC and commitment of these persons stand out in dire contrast to Scot’s structural 50-60 per cent on average absenteeism.
“It is high time for SMMC to, instead of continuously fighting against the Supervision exercised by the Inspectorate, and to that extent having already initiated four court cases (two main and two injunction cases) and having its attorneys write countless letters, devote its scarce resources and energy to ensuring that demands of the Inspectorate, the body exercising supervision on behalf of St. Maarten citizens to enable good basic quality of medical care, are properly and timely met.
“The sooner SMMC can understand that it is (i) subject to the external supervision by the Inspectorate and (ii) must abide by the imposed demands to improve the level of care, the sooner the quality of care in St. Maarten can be brought to what St. Maarten citizens can and should within reason expect.”
Best said SMMC’s continued failure to adhere to the Inspectorate’s legal demands to take actions that would remedy the current deficiencies in rendering a basic quality of care within the hospital had regrettably resulted in a decision by the Inspectorate to impose another demand against SMMC, under the penalty of forfeiture of significant fines in case of non-compliance within set deadlines.
Best said SMMC maintained its position that the Inspectorate was not authorised to supervise the governance process in the SMMC. He said, however, that articles 15, 16, 17 and 30 of the National Ordinance on Health Care Institutions stipulated clear regulations for governance, management and quality monitoring in these institutions. Articles 23, 24 and 30 of the same Ordinance also state that the Inspectorate is the body authorised to enforce those regulations.
“Unlike in the old days when the Supervisory Board only supervised the financial status of the hospital, nowadays the Supervisory Boards are also responsible for the internal supervision of the quality of care provided by hospitals. It is the Supervisory Board’s responsibility to act when the Board of Directors dysfunctions in providing quality care,” said Best.
“In the rest of the world, e.g. in Holland, it is quite common nowadays for external supervisory bodies like the Inspectorates of Health to audit a hospital on health governance matters. Since 2010 the Dutch Association of Hospitals has developed a governance code for all its members to explain this new policy.
“SMMC, however, refuses to subject itself to this external supervision on governance matters by the Inspectorate.”
Best said the Inspectorate strives to ensure that an adequate level of medical care is rendered to the St. Maarten community.