Special Report 114 - Emergency procurement of ventilators by the Health Service Executive
The World Health Organisation determined in early 2020 that ventilators would be a critical medical device in the treatment of patients severely affected by Covid-19 infection.
By early March 2020, the Health Service Executive (HSE) identified that additional ventilators were urgently needed to deal with the expected surge in demand for critical care. The majority of decisions made by the HSE in respect of the emergency procurement took place over a four-week period between March and April 2020.
The HSE purchased 581 ventilators at a cost of €20.5 million from its established suppliers.
The HSE identified, through a variety of means, a number of potential suppliers of ventilators that it had not previously done business with. These included both manufacturers of devices and intermediaries. In order to secure orders, the HSE made advances to the new suppliers totalling €81 million.
Following the subsequent cancellation of orders, the HSE received a number of refunds of advance payments, totalling €50.5 million.
The HSE did not receive benefit or use from expenditure of €30.5 million, which therefore represents a loss of value. The HSE is pursuing refunds of €22.3 million for orders that were cancelled or where the ventilators received were deemed not fit for purpose. Expenditure of a further €8.1 million is considered to be unrecoverable. The majority of this (€6.8 million) relates to ventilators purchased that the HSE ultimately did not need. These have since been donated to health authorities in India.
Assessment of ventilators needed
The HSE identified that, in March 2020, it had a total of 533 ventilators available for use for adult patients.
Under an arrangement with 18 private hospitals, it was estimated that an additional 55 ventilators (48 ICU grade and seven transport ventilators) would be available to the health service for the three months April to June 2020. These were not taken into consideration when determining the number of ventilators on hand and available for use.
By late March 2020, HSE clinical staff had estimated as part of its ‘surge capacity planning’ that an additional 326 ventilators would be needed. This number was based on the maximum extent by which critical care capacity in the Irish health system could be increased to deal with the expected influx of Covid-19 patients.
Through purchases from its established suppliers of ventilators, the HSE was able to procure 581 ventilators — nearly twice the estimated number clinically required, and that could be used.
Although the HSE sought initially to purchase ventilators similar to models typically used in ICUs in Ireland, it subsequently decided to purchase models that had a lower technical specification but that met the WHO specification for the treatment of patients with Covid-19.
In response to a proposal from the HSE, the Department of Health on 21 March 2020 sanctioned the purchase of 1,900 ventilators at an estimated cost of €73.5 million — an implied average unit cost of €38,700. This examination was unable to find a business case prepared by the HSE to support the requirement for 1,900 ventilators. Instead, the quantity for which sanction was requested appears to have been based on the orders that the HSE had already placed with potential suppliers and orders that were at an advanced stage of negotiation.
Between 3 March 2020 and 14 April 2020, it can be identified that the HSE placed orders for almost 3,500 ventilators at a total cost €129 million — nearly twice the number approved by the Department and over ten times the estimated number clinically required.
The HSE approached its established suppliers in the first instance to enquire for availability of ventilators. Due to HSE concerns around their capacity to meet the demands, the HSE then began investigating other potential suppliers, with the assistance of IDA Ireland. Direct approaches were also received by the HSE from a variety of sources with offers of assistance.
Most of the new potential suppliers identified were not directly involved in the manufacture of ventilators and had little or no experience in the supply of those devices but represented they had connections to manufacturers of devices.
No due diligence checks were carried out for four of the ten new potential suppliers to whom the HSE made advance payments. The extent of checks completed for the other six varied from commercial research to a high-level risk assessment.
Between 24 March 2020 and 14 April 2020, the HSE made combined advance payments of €81 million to the ten new suppliers to secure almost 2,200 ventilators. A total of €50.5 million has been recovered, but as at May 2022, the remainder was still being pursued, or was being treated by the HSE as unrecoverable (see Figure 1).
Quality of ventilators purchased
The usual clinical and technical support provided by suppliers of ventilators was not available from the new suppliers. The HSE also had no previous experience using any of the ventilator models being offered by those suppliers. Orders were placed with the new suppliers on the basis of a ‘desk review’ by HSE staff of documentation provided by the prospective suppliers, and the attendance by HSE senior clinicians and clinical engineering staff at a demonstration of two sample ventilator models provided by one of the new suppliers.
However, quality issues emerged quickly after the first deliveries of devices from some of the new suppliers, including a number of devices delivered directly to some of acute hospital sites. Performance tests completed by a third party on behalf of the HSE found that of 100 ventilators tested, 41 failed. A further desk-based review by the Health Products Regulatory Authority of supplier documentation found that two models did not comply with the EU regulatory framework and that three models required further investigation.
In light of the significant quality issues identified coupled with the risk to patient safety, the acute hospitals were advised by the HSE’s Head of Clinical Engineering, as agreed with the Head of Critical Care, not to put the ventilators into use. HSE Procurement was also advised to cease accepting delivery of the ventilators sourced from these suppliers. However, the HSE did not cancel the remaining orders it had placed with two suppliers for 365 ventilators at a cost of €6.8 million. This followed advice from the IDA that the deliveries from the suppliers, who were manufacturers of devices, were on schedule and that as these were ‘sensitive’ supply lines, no intervention should be made to the orders.
None of the total of 467 ventilators received from the new suppliers were put into clinical use in Ireland.
Cost and deployment
On 20 March 2020, the HSE wrote to the Department of Health and to the Department of Public Expenditure and Reform (DPER) requesting approval to contractually commit for up to 1,900 ventilators at an estimated cost of €73.5 million. The letter stated that further approval would be sought in writing for any ventilators purchased beyond this number.
In accordance with the conditions of the sanction for the purchase of ventilators, the HSE sent a weekly expenditure report to the Department and to DPER. The report only included expenditure for ventilators that had been delivered and did not include the payments in advance and refunds received from cancelled orders (see Figure 2). This was seriously misleading and negated the effectiveness of the Departments’ oversight of the expenditure.