Curing the sickness in Slovakian healthcare contracts

An analysis by Transparency International Slovakia (TIS) of hospital tenders worth €800 million over the period 2009 – mid 2012 revealed a high degree of collusion and corruption that was costing the government millions of euros. The results were startling: more than two-thirds of all money spent was on tenders with a single bidder. TIS estimated that increasing the competitiveness of tenders could save €35 million or 21% of all procurement expenditures.

TIS teamed up with SME, a major Slovak newspaper, to look in more detail at the degree to which Slovakia’s healthcare procurement system was vulnerable to collusion and corruption. Analysing publicly available data from past tenders, TIS and SME found that only one company placed a bid in 17 out of 27 tenders for CT scanners, with subsequent purchase prices for CT scanners varying by up to 100%.

TIS and SME also published the findings of an investigation into catering tenders in several public hospitals, revealing that two inter-connected companies with no history with large tenders, DORA Gastro and HCS, took turns in winning similar huge ten-year catering contracts in four state-owned hospitals.
The allegations of collusion were broadly reported by major Slovak media outlets.

As a result, three managers at the involved hospitals were dismissed. The official reason was their failure to obtain cabinet’s approval of the tenders, which is an official requirement for this type of large tender. The Chief of Staff at the Ministry of Health was also dismissed for not passing the tenders on to the cabinet.

At a press conference, the Minister of Healthcare announced new reforms to increase transparency and competition in public procurement. Each public tender will now have a price ceiling that is publicly announced, hospital procurements will be centralised, hospitals will start using an e-procurement platform, hospitals will use the same reporting standards and their reports will be audited.

While the reforms have yet to be implemented, experts note that these changes will bring considerable savings to the state budget, fair competition to the private healthcare service sector, and decrease the sector’s vulnerability to corruption.

Key Lessons:

  • Public availability of procurement data allows for disclosure of: irregularities, corruption cases and waste of public funds.
  • Good press coverage of corruption cases has the power to mobilize citizens and put pressure on the government for changes and reforms.
  • Announced reforms are only the beginning of the way. What matters is their implementation and this should be closely monitored by the civil society.

Website: http://www.transparency.sk/en

Photo credit: Pudelek