In view of the many spreading hoaxes associated with upcoming hospital construction and reconstruction projects, including by some politicians who provide media declarations in order to destabilise the sector, we would like to make some claims to the right.
The Ministry of Health of the Slovak Republic has transparently assessed the state of preparedness of projects of all state hospitals, which can benefit from the Recovery and Resilience Plan of the Slovak Republic (POO) by direct assignment. The assessment was carried out in accordance with a methodology which was detailed to the government and on which no comments were made. Subsequently, the resort presented material for the discussion of the government of the Slovak Republic, on the basis of which it decided on 1.7.202 that new university hospitals would be built: in the locality Rázsochy in the form of Shell & Core and Martin, with a total value of 611 million Euro. This amount represents more than two thirds of the total funding for the construction of hospitals.
Following a government decision, a drawing methodology was developed for the remaining component 11 resource package of the recovery plan, i.e. EUR 265 million. In early September 2022, this methodology was approved by the Government Cabinet. The methodology reflected the requirement for a fair regional distribution of remaining funds with the most comprehensive impact on the Slovak patient. It was based on an analysis of the use of capital in the past, whether from the MZ SR chapter or from EU funds. The aim was for the remaining POO resources to be used as much as possible to compensate for regional disparities in the sector's capital investment. The drawdown itself was set in two rounds for projects above and below 5 million euros. In preparing the methodology for projects above EUR 5 million, the resort considered several factors, in particular what is the added value of investments, the size of the dropout of the hospital or the type of project. The nature of the POO is to implement complex projects, which are also linked to mandatory indicators, such as the number of reconstructed or built beds. This had to reflect the methodology used.
Based on this methodology, the health department prepared the first call for hospital projects above EUR 5 million, announced on 8.11.2022. A total of EUR 212 million from the POO is allocated to this call. The call is a so-called "demand challenge," which means that it reflects the demand of applicants, and the Ministry does not know and has no control over who decides to apply. The Ministry only has an overview of investment intentions, i.e. potential projects, which have been identified on the basis of data collection.
As a result of the above and the very logic of the process, hospitals, which have a clear investment plan, have systematically worked on it and have already declared preparedness during the data collection, will respond to the demand challenge. All hospitals, i.e. hospitals of higher territorial units (VÚC) and private hospitals, may be eligible for the call under the State aid scheme. This is also the result of the text of the Recovery Plan, where the authors specifically wrote: The financing of investment projects will be possible for all providers, regardless of the type of guarantor, by means of a call published by the Ministry of Health of the Slovak Republic.
Based on constant invectives and attacks on the resort, the Ministry analysed in detail the requirements of private hospitals, which, if all criteria are met, can benefit from this call of approximately 150 million. This represents around 17% of component 11 of the POO. However, if we look at it even more closely, their investment plans are directed towards the construction or reconstruction of a large number of beds for the regions, thus helping to achieve the implementation of the KPI component 11 POO. Simply put, public and public hospitals will allocate EUR 720 million and hospitals operated by a private provider, but in most cases the infrastructure is still the property of the VÚC, only estimated at a maximum of EUR 150 million. Private operators also publicly declared that all the assets acquired from the POO would be converted into a guarantor, i.e. in their case to the VÚC. They will not be left with any assets, everything will end up in public ownership.
The call of up to EUR 5 million (allocation of about 50 million) will be launched during December and will have a different assessment, in comparison with the already announced call, focused primarily on smaller projects of large hospitals.
Public hospital projects
With regard to the preparedness of state hospitals for the use of POO funds, it should be stressed that the situation was more than alarming. The current management of the resort is not done, even Rázsoch and Martin Hospital projects have been suspended. The current Ministry's management even found that the resort had provided funding for the Martin hospital project for project preparation from the Slovak Investment Holding, which had been classified by previous department management, the hospital had not been provided and had to be returned. At the same time, it should be noted that at the time of the adoption of the Recovery and Resilience Plan Slovakia was more or less clear what can be achieved and what can not be achieved with regard to the European Commission.
The preparation of the POO within the resort has not completely taken into account the fact that construction and reconstruction can only be carried out on the basis of project documentation and it is necessary to prepare it. However, state hospitals have to carry out public procurement for project preparation, mainly with regard to the financial scale, over a period of almost a year, which is currently in practice. It takes at least another year to prepare the project documentation itself. Not to mention the technical preparation, including various surveys, studies and evaluations, which are a mandatory part of the complex preparation. These activities therefore pose a risk to public hospitals. This means that if we wanted to implement the construction and reconstruction in terms of the set milestones of the POO, it was to start with the intensive pre-project and project preparation of the projects of state hospitals at the time of the preparation of the recovery and resilience plan. In support of project preparation, a Health Implementation Agency (ZIA) was to be set up, but it established the current management of the Ministry of Health immediately after accession, namely 1.6.2021.
However, the establishment of a SION has not produced the desired effect. Rather, it has been confirmed that the establishment of such an agency is economical, inefficient and, despite the media information communicated by the SIA, has not been able to perform the essential functions within the scope of its instrument of incorporation. It would no longer be able to carry out a comprehensive project activity for all state hospitals, or hospitals which would be financed by the POO.
The SIA was also unable to carry out feasibility studies to assess the investments in terms of technical and financial readiness. However, as a feasibility study is also crucial for the evaluation of the Value for Money Unit (UHP), they started to be carried out separately by hospitals. For comparison, a team of several dozen people is working on the Rázsochy project. Their range of activities and focus is very wide The cost of the project documentation here is about 16 million euros. To implement something similar comprehensively for all state hospitals was and is a utopian idea. The Slovak market does not have so many professionals from all professions who would also be interested in working in a state organisation, which was finally confirmed in the competition for the post of director of the SION and in filling individual positions.
Order of the Minister
The Minister's order of 24.3.2022 is also very often questioned in the media. The purpose of this order was not to stop the preparations for hospital projects, which wanted to apply for POO funds, but on the contrary, to direct hospitals in preparation and to assess responsibly whether the planned intentions were being pursued. The main objective of this measure was to save national financial resources which could have been used to prepare unused and, in some cases, repeatedly changed project plans without complying with the set milestones and indicators of the POO.
At that time, the resort observed the tendency of some hospitals to hire external consultants for minor project activities that ZIA could and should have carried out. In her case, the Ministry assessed this as non-efective handling of funds. All reasonable requests for contracts by consultancy firms, which were subsequently submitted to hospitals, were accepted by turnover. During this period, the resort has also been repeatedly intensively devoted to the justification of the ZIA and its management and work methods. In so doing, he sought to preserve the original idea and purpose of the former Ministry's leadership regarding SION.
It is also necessary to note that the order was valid only from 24.3.2022, which was in view of the date of direct assignment from the POO (1.6.2022) an absolute limit due to the required objective and transparent evaluation of all project intentions of hospitals. The evaluation, which has shown that Martin is feasible in the so-called "full fit out" and "Rázsochy do Þshell and core" has been carried out in accordance with the methodology set out above, objectively and transparently, under the aegis of the Prime Minister and his designated and established working group after the debate. This decision was subsequently approved by the Government. The reality is, unfortunately, that the Ministry of Health of the Slovak Republic inherited from the previous lines of the empty pantry, the proposal of the Utopian agency and written POO, which had to grab hold and start implementing. On this, an order issued three months before indicating the direct invitation has already changed absolutely nothing. The fact is that the previous lead to the POO listed a list of dreams instead of real goals, which would have been subject to deeper analysis, completely misunderstood what investment preparation for the construction of new hospitals meant and left in the POO the current leadership chaos, which almost a year tried to clean up the current management.
This is also evidenced by the fact that the working version of the POO of the previous management of the resort included listed hospitals, which was only in Rázsoch and Martin. However, Marek Krajčí also suspended these projects for one year. Vladimir Lengvarsky unlocked them.
Call above €5 million
The 8.11.2022 call is a reflection of the social demand and a follow-up to the required reforms as part of the optimisation of the hospital network, which is in its way the backbone of the health care OO. We cannot and cannot make reforms unless we support all the elements of institutional healthcare, including smaller regional hospitals.
However, there are voices that say that in this way we will only financially support private companies the World of Health or Agel. However, it is also important for people to know that several hospitals, even when operated by private providers, belong to the state, higher territorial total or non-profit organisations. The availability of healthcare of appropriate quality is crucial to people's view. How do we explain to patients that a hospital cannot be restored as part of its availability because it is operated by a private patient?
Higher territorial units and patients in need of healthcare have no problem with that. From the point of view of the Ministry of Health, the patient, including the patient living outside the district or county town, is in the first place a patient who needs an accessible regional hospital regardless of its owner or operator.
We also dare to disagree with the claim that the World of Health or Agel has a dominant position, for example, in Eastern Slovakia. In the Prešov and Košice regions there are more than 50 facilities (including spas, treatments and more). The world of health and Agel in this region operate in ten facilities. In addition, the call envisages a mechanism which states that the assets will be transferred to the State/government assets after the end of the sustainability period. The existing approved State aid scheme also does not allow, for example, the aided project to gain more than about 1%. In such a case, it must repay the unconditional part of the subsidy, in simple terms.
All these settings and mechanisms only underline the correctly defined goals of the resort. The state is both a regulator and a participant in a regulated environment. If we focus the calls from the recovery plan solely on state facilities and allow other operators to apply for funding, we will encounter both European anti-discrimination policy and the patient's interest. In the end, we would also go against the approved text of the Slovakian Recovery and Resilience Plan, which, as mentioned above, talks about the possibility of applying for resources to all providers without distinction between the founder.