A chaotic procurement system and systematic overcharging

The data provided by the Health Ministry give a strong sense of the prevailing chaos in procurements: Every year 9,000 tenders on average are lodged by national health bodies (no less than 290 organizations) and the greater part of the tenders are conducted by the ESY units, whereas the Development Ministry is responsible for only 5 to 10 percent of the total procurements. In Greece there are 1,144 suppliers to hospitals that «negotiate» deals for the 500,000 medical and technological products and 11,000 medicines. It’s impossible to exercise control and for procurements to be properly planned and monitored in the system right now. The initial 2005 budget for hospital supplies was in the order of 1.5 billion euros but actual spending reached 2.5 billion euros, that is 70 percent over the budgeted amount. Overspending together with serious delays in payments by insurance funds to hospitals have, as a result, created debts toward suppliers. The problem since 1997 has been resolved by measures introduced by the Finance Ministry. The last measure addressed debts amounting to 2.7 billion euros for the period between 2001-2004 and was applied in 2004. At this moment hospital debts to suppliers amount to 1.8 billion euros whereas outstanding insurance fund payments are 1.4 billion euros and available cash funds of only 250 million euros, that is a deficit of 150 million euros. Expired supplies Complaints have mounted as the wasting of procurements has bordered on the ridiculous. Not so long ago the Health Ministry discovered supplies of materials that had been in hospital storage for many months and no one was aware of the exact quantities. In inspections conducted in 2005 supplies stored in a hospital were discovered to have expired in 1997 as well as X-ray film which expired long before. Another discovery has been the overcharging on invoices. In Greece the price of an implantable stomach device is about 26,000 euros whereas in France the same device costs 15,640 euros. The overcharging is due to the fact that intermediary companies in third countries resell the equipment to Greek companies at many times the price. Duty roster hospitals Creating a system that ensures transparent procedures is the only way to save funds to be used in improving the National Health System. The Health Ministry has already prepared a bill on changes to the existing system for on-duty hospitals; the bill will soon be presented to the Cabinet. The bill is based on a legislative proposal that the previous government formulated, with some changes. It contains provisions for the creation of a Central Committee for Health Supplies that will be responsible for the strategic development of the supply network, the monitoring of prices and expenditure, control and approval of product specifications, the authorization of contracts and the financial management of the system. For the lodging and conducting of tenders (for medical supplies, chemical reactors, orthopedic and ophthalmological equipment, supplies for blood taking and cardiovascular surgery, blood cleaning filters, fuel, and services), the Institute for Pharmaceutical Technology and Research will be used and will also be responsible for developing and managing the hospital supply chain. The Public Corporation for Hospital Construction (which may undergo a change in name) will be responsible for biomedical equipment tenders and the Research Center for Biological Material will shoulder responsibility for keeping registers of supplies and products as well as conducting laboratory and quality controls on products. Hospital finances can be properly managed by introducing the double-entry system in hospitals (Avramopoulos has requested that the procedures be accelerated in this respect) and by implementing obligatory budgeting in hospitals. These regulations are in the bill that is to be submitted to Parliament.

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