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Medical Devices Manufacturers ‘Shocked’ That Gov’t Wants to ‘Bargain’ on Debts

Ábrahám Vass 2019.12.20.

In the wake of PMO Chief Gergely Gulyás’s announcement on Thursday about the hospital debt, the Association of Medical Devices Manufacturers (OSZ) is angered and demand the government to make up the whole amount exceeding 70 billion HUF immediately (Eur 212 million).

At the beginning of the week, OSZ called on the government to settle the bill it owes to the suppliers. In reaction, the minister leading the PM’s office on Thursday announced that the government was providing hospitals with a 79.4 billion HUF (Eur 242 million) financing package with a view to improving health care and reducing hospital debt.

Gulyás also revealed that out of this amount, 42.8 billion HUF (Eur 129.6 million) is for the hospital debt (with the remaining 36.6 billion put into modernization projects, and 15.7 billion for outpatient services). However, the government won’t simply take over the debt but negotiate it centrally, making sure that billed services are justified, he said. In addition, the finance ministry has appointed a financial supervisor for 13 hospitals whose finances are especially precarious. The aim, he said, is to avoid similar situations in the future by setting stricter management enforcement rules.

The problem is that hospitals’ debts have far exceeded 42.8 billion HUF – as of now, it is standing at 70 billion and it is unclear what the government is planning to do with the remaining almost 30 billion HUF (Eur 90.8 million) debt and which bills they are planning to pay and which ones they are not, and based on what criteria.

OSZ’s latest communique came as a response to this recent announcement. In their statement, they claim they are “shocked” about the government’s intention of aiming to make up only about half of the debt, which sends a “very dangerous message.”

OSZ insists that the justification of the billed services is “unrealistic,” arguing for example, that most of the goods and services were delivered through public procurement procedures and the institutions had the chance to raise objections or dispute certain invoices. They note that the average overdue debt is currently more than 300 days, while the volume of the bills that are overdue for more than one year already amounts to 10 billion HUF (Eur 30,3 million).

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It is also unclear how the government would check “tens of thousands of bills of hundreds of suppliers.” OSZ also recalls that the government declared “to recognize the total capital sum of overdue debts” at the debt settlement in 2011-2012 and suggest that further delays may result in the further increase of interest and enforcement costs.

The communique concludes with “firmly requesting” the government to settle the debt, otherwise, it could easily undermine public trust.

featured image: illustration; via Pixabay