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WRHA Board minutes provide clues to the mystery of the brown envelopes

When a reporter came knocking on Brian Postl's door to ask about brown envelopes, he wasn't surprised.

Postl, the President and CEO of the Winnipeg Regional Health Authority, already knew he had an ethical hot potato on his hands.

In November, more than two months earlier, the WRHA board of directors had discussed its Value Added Policy. The minutes of that meeting describe the discussion discreetly, with no mention of brown envelopes containing promises of gifts from suppliers...

WRHA Board of Directors Page 4
Tuesday, November 25th, 2008
9.4 WRHA Value Added Policy

A briefing note regarding the Value Added policy for benefits received from suppliers was provided.

The current policy and direction is to not accept "restricted" value adds and to not include these in the bid evaluation process. A general discussion ensued on the reasoning for value add benefits as opposed to reducing the price. Members were advised that the value add benefits have been long standing relationships and behaviours in the health industry. It was noted that other jurisdictions still include value adds in their negotiation and bid evaluation process and that the WRHA is a Canadian leader in excluding value add benefits from its bid evaluation processes. This will be brought back to the Board for future discussion and decision.

When Jen Skerrit of the Winnipeg Free Press arrived with embarassing questions about the Value Added Policy, Postl should have been prepared.

Why, then, was his response so disturbing? Why does he sound as if the WRHA's guilty of something? And of what?

On the surface, his defence of the Value Added Policy makes perfect sense (even if we think its misguided and flawed).

Under the old system the WRHA evaluation team had a hard job.

Say they were considering bids for dialysis machines, an example Postl has used. (We have no idea what a dialysis machine costs, so we've pulled numbers out of the air.)

A offers dialysis machines at $100,000 each and no-cost repair or replacement of any machine for two years.
B offers machines at $107,000 each -- but adds a year's free dialysis liquid.
C offers machines at $98,000 each, a one year warranty on parts and dialysis liquid at half price if you sign a five year contract.

The evaluators had to weigh each bid and see which was the best combination for Manitobans.

It was a complicated process and you can see how over the years a perception could grow that its the perks and not the product that sells the deal.

The WRHA says it made the process more transparent.

Now the bids are examined on cost and quality and a winner is chosen.

Then, and only then, the winner's brown envelope is opened to see if he is offering any value-adds.

The new system seems to eliminate any incentive for providing perks. Yet the WRHA still collected $20 million worth of value-adds over 8 years. Obviously the suppliers felt there was still value in giving something for nothing.

It's not hard to speculate that not much actually changed with the new system. If, say, company A sells a variety of pharmaceuticals, winning one contract means the evaulation team sees the perks that come with the bid, so they can anticipate that the company's bid on another drug contract will come with perks, too.

Or, maybe a company actually wants research on liver cancer. It may find it cheaper to give the WRHA a couple of million dollars for dedicated liver research instead of building a lab, hiring scientists, buying white mice, and then starting a research project.

But Postl has adopted a holier-than-thou attitude where he sees the world as consisting of manipulative suppliers endlessly trying to corrupt the decent health care providers.

We have more faith in people and in their judgement.

The old system of bids actually seems more transparent. The public could see exactly what the winning bidder promised. It was right there in the bid. Under the new system, the promises are secret and known only to four people who open the brown envelope attached to the chosen supplier. The WRHA can accept or reject the gift, or, and here it gets dicey, ask for a monetary donation instead to be used at the discretion of the WRHA.

And, it seems that the WRHA collected $2 million in just such monetary donations over the past 8 years.

And here's the problem.
How did Brian Postl spend the $2 million under his control?
Why won't he tell us?
Who gave him the money? Not him, personally, but him as the corporate representative.

Instead of simple answers, Postl has unleashed a series of bizarre defences to the questions.

Red herrings. Selected leaks. Playing the victim. And rewriting policy on the fly have been part of his arsenal.

Postl and Health Minister Theresa Oswald have dragged so many red herrings across the trail that their staff has to stand downwind. Both of them tried to deflect the spotlight from the WRHA to individual physicians by pretending that somehow the brown envelope policy was created to prevent doctors from being influenced by phamaceutical companies to overprescribe certain drugs.

We know what you're thinking...Huh?

When that tactic failed, Postl feigned co-operation. Initially, when Jen Skerrit asked for a detailed breakdown of how the $2 million in unrestricted "donations" was spent and which suppliers donated money instead of goods or services, the WRHA told her to file a Freedom of Information request. This is government-speak for "get stuffed."

But within a couple of days, Postl was dropping hints as to where the money went. Education (always a popular and nebulous area), staff training, and breast-feeding clinics were mentioned.

It didn't take long to see where the breast-feeding clinics came from.

WRHA Board of Directors Page 2
Tuesday, June 24th, 2008
Moved, Seconded
And Carried
7.1 Infant Nutritionals
A briefing note regarding the practice of contracting with infant nutritionals companies that provide formula free of charge was provided for discussion. The options were reviewed and discussion ensued regarding the ethical decisions related to providing free breast milk substitute and members felt that there is a need for better education on the benefits of breast feeding. Members felt that the issue of breast feeding was a separate issue. The Board did not make a decision but asked that an updated briefing note including an education component be brought back for further discussion and decision.

Staff training? Why is it that the first thing that pops to mind when you hear that term nowadays is the Caribbean cruise taken by staff at the Virginia Fontaine Addictions Foundation? That was paid for out of their professional development budget. Surely the WRHA didn't hold any meetings or retreats in say, Banff, paid for by the value-added funds they accepted.

And upgrades to the infection prevention and control program? You only have to read The Black Rod's post for Jan. 27, 2009 to see how well the WRHA's infection prevention and control program works. An entire ward of elderly patients exposed to the deadly Superbug because they don't know enough to quarantine a carrier. Who will investigate the hospital's negligence leading to the death of at least one of the patients?

Brian Postl began to squirm only when Opposition Leader Hugh McFadyen issued a call on Monday for the provincial auditor to investigate all the "value added" gifts accepted by the WRHA, particularly any cash and cheques.

Postl went on the offensive.
"I think they're trying to politicize something that isn't necessary…there's no impropriety there," he told the Free Press.

Note to Brian Postl. Bone up on your civics.

The Opposition is the government in waiting.
You are not the government in anything.
You have to answer all the Opposition's questions and concerns in a respectful manner, not challenge them for asking the questions or attack their integrity.

You are supposedly non-partisan, although that's debatable, as we'll see. You must be open to the questions of the Oppositon which represents half the electorate in the province.

The WRHA must provide the facts if asked and not hide behind bureacracy. That's transparency.

What's worse, Postl acknowledged that McFadyen was right to call in the auditor. In fact, claimed Postl, he had done exactly that, coincidentally the very same day of McFadyen's news conference. Will wonders never cease?

Postl's claim came in a letter to the editor published in the Free Press on Wednesday. He wrote "We've asked the auditor general for her advice on how to best strengthen our approach and we will act on any recommendations."

Hold it….That's not what the Opposition asked for. But that's right out of the NDP playbook. We saw this tactic during the Crocus Fund scandal. The NDP called in the auditor to examine if the fund was properly monitored by the department of Industry and Economic Development. It was only well after the auditor released his report that we learned that the Crocus Fund had a secret back-channel to Finance Minister Greg Selinger through the Finance Department, not Industry, and Selinger was responsible for keeping Crocus afloat.

Postl appears to be asking the auditor to become an ally rather than a monitor.

And who's politicizing what?

The minutes of the WRHA for April, 2008, show the Report of the Chief Executive Officer (that would be Brian P.) who informed the board:

* The process of tracking election promises is continuing by having regular meetings with Manitoba Health.

Well, isn't that cozy? Have the priorities of the NDP have now become the priorities of the health professionals?

Postl had one more card up his sleeve.

If all else fails, rewrite history.

"Two years ago we moved to limit even the perception of influence by large pharmaceutical companies and equipment vendors by refusing any value-added benefits that had strings attached," he wrote in his letter-to-the-editor.

Except that here's how the Value Added policy approved by Postl in June, 2007, actually reads:
"Companies shall be informed that where value added benefits are offered, the WRHA prefers that these be of an unrestricted nature."

Well, at least they have a Value Added Policy. The Conflict of Interest/Personal Gains Policy that's supposed to be read in conjunction with the V-A policy
is still missing and unaccounted for.

A diligent reader managed to unearth the old Conflict of Interest Policy and sent us a link.

We read it with interest and discovered…it was boilerplate. It contained what you would expect it to contain. Don't hire your wife. Don't buy from your own company. And don't tip off your brother-in-law about an upcoming contract.

We can't see why they needed to change it two years ago.

Maybe they were antsy about Section 3.1
"The potential for conflicts arises because of the nature and scope of the activities engaged in by the Facilities. WHRA Logistics Services assumes that potential for conflicts of interest will occur regularly in the normal conduct of activities."

Anyone with a potential conflict of interest was expected to advise WHRA Logistics Services
"verbally and follow this up with a completed Disclosure Statement returned to WHRA Logistics Services within a specified period of time as requested."

At first glance it reads as if they require employee/board members to tell someone of their possible conflict of interest, and, if requested, to put it in writing. Is that how you read it?

Which, of course, raises the question, why is Postl so worried that his colleagues and staff can be bought off? Has there been some major payoff that we're not being told about?

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