We at Transparency International Ukraine, one of the most active members of the ProZorro team, were the first to begin working on the technical impeccability of the system. Then we wanted it to become mandatory for all the customers. We achieved both of our goals. Now we want to be sure that the system will make lives of citizens better and that funds will be spent efficiently, so that people can get quality services from the state. That is why we are concentrating on public procurement monitoring.
Today we take both the system of procurement in general and specific areas of it under our watchful eye. In January, we came out with our first monthly report on public procurement in the last month of 2016. Now we want to present our first sectoral report. We decided to start with healthcare procurement. And the reason behind the move is not the fact how scandalous the topic has long been. It is simply the sphere of life every citizen has to deal with. Effectiveness of public procurement determines the level of life of many Ukrainians. Besides, we see work of the new Ministry of Healthcare team on ensuring the transparency of tenders as a positive trend. By coincidence, this team joined the Ministry at the time ProZorro became mandatory. That is why it was interesting to track first trends and to record the state of the system that will later be used as a basis of comparison for the years to come.
Our report covers procurement carried out in ProZorro system from 1 August to 31 December 2016. During this period, 4.5 billion of hryvnias were spent by means of ProZorro on medical purposes. More than 200 customers took part in the procurement processes and more than 40 000 tenders were held. Interestingly, there was a greater number of competitive purchases in medical field than in the system altogether. However, almost a third of them (31%) were still conducted by noncompetitive procedures.
We have noticed several features that distinguish procurement in medical field. Most of the funds turned out to be spent on medical equipment (more than 1,5 billion). That is probably a good thing, as technical modernization is lacking in Ukrainian healthcare. A great value of building repair services was procured (almost 700 million worth). Half a billion medicines were bought through ProZorro. In terms of proportions, huge sum of money was spent on heating and electricity (420 million) and fuel (160 millions). A trend is worth noting in here. Fuel and petroleum products were bought mostly by non-competitive tenders.
What conclusions can be made, then? It is so good, that so much is spent on equipment renovation. However, operational costs are too significant. The obvious question is whether this proportion is our target.
We would also like to note the following negative phenomena. Funds were spent very disproportionately between different regions. For instance, in Kyiv amount of costs spend per capita (347 hryvnias) was 20 times higher than in Ternopil oblast (17,5 hryvnias). Of course, we should consider that leading medical facilities that provide help to all the Ukrainians are situated in Kyiv. Still the difference is staggering. Monopolization of medical equipment and medicines markets is also becoming evident thanks to availability of information in the ProZorro system. 12 suppliers won half of the purchases of medical equipment, while 11 sellers of medicines got 60% of funds spent. And these companies make up only 1% of participators. There is also the opposite problem. Many tenders had no participants altogether. Almost half of below-threshold procedures failed for this reason.
Let us examine what medics saved thanks to the ProZorro. During the period that we reviewed the sum looks rather modest and constitutes to 260 million hryvnias. Of them, 140 million were saved on above-threshold procedures and 120 million on the below-threshold ones. Nevertheless, 6 MRI scanners can be bought using this sum of money. Many discussions are now waged about whether the saving is calculated correctly. But the undeniable fact is that the money was not spent, meaning that additional goods and services can now be acquired.
These are the most general conclusions of our study. They indicate several trends that the Ministry of Healthcare will hopefully take into account in its policies. However, lives of people are more affected by local purchases. It is ‘physically’ impossible to monitor all of them. That is why we ask other civic society organizations (including regional ones) to actively monitor healthcare procurement. Transparency International Ukraine is ready to provide all the tools for that. We can train others to use ProZorro analytical module and provide legal support. DoZorro portal will become the meeting ground for people who follow procurement procedures. That is the place to collect all the failures of the procurement system and to make offenders accountable. That is how we can encourage the participants of healthcare procurement to become more honest, competitive and transparent. Today there is no power to stop such purchases and to disqualify all those that avoid transparent rules. Lives and health of the people are at stake. That is why we should control, as we cannot disqualify everyone.