Auditor general begins probe of travel nurse contracts in N.B.

Auditor General Paul Martin has begun an investigation into the management of private agency nursing contracts in New Brunswick, which are costing taxpayers hundreds of millions of dollars.

His office announced Wednesday the independent audit of travel nurse contracts with Vitalité and Horizon health networks and the departments of health and social development. Martin told CBC News he has already started his probe.

He will look at procurement, oversight, internal controls and "overall value for money."

"This work is very important in keeping government departments and agencies accountable for the spending of New Brunswick tax dollars," Martin said in a statement.

Asked what prompted him to undertake the audit, Martin said his office is "interested in ensuring value for money as it relates to government spending."

"We have been considering an audit of the travel nurse contracts for some time." he said in an emailed statement. "The timing is right given the noted interest to the public and the availability of our resources to complete the audit."

Premier, union called for investigation

Last week, Premier Blaine Higgs called for the auditor general to investigate Vitalité and Horizon's spending on travel nurses, saying the government needs to be prudent in spending to get the best value for taxpayers.

"And this is a situation where it seems like we could have got better value," he said.

The New Brunswick Nurses Union and the Canadian Federation of Nurses Unions have sent three joint requests for an audit since last April. The most recent request was submitted last week, after a Globe and Mail investigation found agencies such as Toronto-based Canadian Health Labs have charged rates of more than $300 an hour — roughly six times what a local staff nurse earns.

Vitalité alone spent about $158 million to hire out-of-province nurses in 2022-23, contracts obtained by the national newspaper revealed.

Vitalité's third contract with Canadian Health Labs, which continues until February 2026, with a cap of $93 million, effectively charges the regional health authority $306.70 an hour per travel nurse, according to the Globe and Mail. (Pixel-Shot/Shutterstock)

Deputy health minister Eric Beaulieu told a legislative committee the government was aware of Vitalité's first contract, which was worth up to $20 million. It was informed of the other two after the fact, late in the 2022-23 fiscal year, he said.

Vitalité CEO Dr. France Desrosiers has defended the spending, saying the staffing situation was "critical" because of the departures and early retirements during the COVID-19 pandemic — "to the point where we were facing imminent emergency department and even facility closures."

The regional health authority had no choice but to resort to travel nurses, she said.

About transparency, accountability

Paula Doucet, president of the New Brunswick Nurses Union, who learned of the audit through the news release, said she's "happy to hear [Martin] is acting upon our request."

It's about transparency and accountability for New Brunswickers, she said.

"I think with what the Globe and Mail has uncovered in relation to the actual costs and the expenditures of taxpayer dollars, particularly what Vitalité has signed on with Canadian Health Labs, has really brought to the surface just how much is unknown about these private, for-profit nurse agencies and where our tax dollars are going," she said.

"So I think the important thing for the auditor general to do is to find out, you know, exactly where the money's going [and] how much of it is going there."

The New Brunswick Nurses Union has sent three requests for an audit in recent months, said president Paula Doucet. (Daniel St Louis/New Brunswick Nurses Union)

Doucet hopes the audit will open a broader discussion about where taxpayer dollars are being spent and invested in health care.

"We for a long time have said they need to be here in New Brunswick — invested in New Brunswick workers, invested in New Brunswick infrastructure. And right now there's millions and millions of dollars that are going outside of this province.

"That is not for an economic spinoff for us. And when we have a premier that often talks about return for investment — he's getting no return on this investment, currently."

No timeline

Martin's audit may involve interviews, review of documents, and various forms of data collection and analysis, according to the release.

"I look forward to reporting on our findings and recommendations upon completion of our audit," he said.

Martin did not respond to questions about how long the audit is expected to take.

Health Minister Bruce Fitch supports Martin's decision to conduct the audit and looks forward to reviewing his findings, said Department of Health spokesperson Sean Hatchard.

Fitch "recently" sent a letter to the auditor general requesting an audit, Hatchard said. He did not say when.

Must not exceed mandate, powers, says Vitalité

Vitalité will offer its collaboration on the audit, an unidentified spokesperson said in an emailed statement.

"However, this collaboration must take place within a framework that does not exceed the mandate and powers of the auditor.

"It must ensure compliance with fundamental legal principles, relevant legislative provisions, legal privileges of the network essential to the exercise of its functions, and not harm the organization's ability to provide essential health services to the population."

Gérald Richard, who was the government-appointed Vitalité trustee when the health network signed its three contracts with Canadian Health Labs, also issued an open letter through Vitalité.

"Today, I am saddened by the public debate surrounding the use of agency staff and the imputed motives of Vitalité Health Network, which had no other choice, and which had its back against the wall," he said.

"As a trustee, I supported this decision, and I can attest that the Department of Health did as well. I continue to defend this decision because it was taken in the best interests of patients and staff."

Gérald Richard, pictured here in 2020 when he was the deputy minister of health, was appointed Vitalité trustee by the Higgs government to oversee reforms on July 15, 2022. Vitalité's first travel nurse contract with Canadian Health Labs ran from July 29, 2022, until Sept. 23, 2023. (Jacques Poitras/CBC)

Richard, who served as the deputy minister of health at the start of the pandemic before retiring and later as co-chair of the health plan implementation task force, was appointed Vitalité trustee in July 2022 when Premier Blaine Higgs dismised the boards of both health networks as part of a larger shakeup of health-care leadership following the death of a patient in the waiting room of the Dr. Everett Chalmers Regional Hospital's emergency department.

"The health care system was in crisis, as the province's premier described it when I was appointed," said Richard.

"When there's a fire, you can't afford to save water."

Richard said he welcomes the investigation by Martin to "shed light on this matter," and will co-operate fully in "clarifying the situation."

"The use of agency staff is a practice born of a crisis situation, which is not governed by law, and which does indeed merit close scrutiny," he said.

"The auditor general's recommendations will undoubtedly help not only to improve processes, but also to protect the health authorities in this type of situation."

Horizon is "supportive of this audit," said interim president and CEO Margaret Melanson.

"Extensive information is readily available regarding Horizon's use of travel nurses," she said in an emailed statement.

Melanson described the use of travel nurses as being "critical" in supporting the health-care system over the past year.

The Department of Social Development did not respond to a request for comment.