Audit office exposes Gesy gravy train, one doctor paid €870,742 (Update 1)

A scathing report by the auditor-general has alleged illegalities within Cyprus’ health care system, while identifying 11 Gesy doctors who each earned over €500,000 in 2020 – with one topping the charts at a whopping €870,742.

The report released on Friday warns of runaway spending and comes in the wake of persistent comments by Auditor-general Odysseas Michaelides, who has accused the health insurance organisation (HIO) of violating the law and philosophy of Gesy, charges denied by the body.

The legislation for Gesy was first passed in 2001, finalised in 2017 and the health system was eventually launched in July 2019.

It stated that as of December 31, 2020 there were 998,391 Gesy beneficiaries registered across 774 GPs, the latter of whom claimed €84,630,601 for the year 2020 – averaging out to €109,342 per doctor – while a single paediatrician was recorded to have received €421,283. during 2020.

It found that 28 per cent of GPs had over 2,000 patients registered.

As of 2020, there were 1,514 specialised doctors registered with Gesy who claimed a total of €116,762,682 for 2020 – an average of €77,122 per doctor.

Of those, 67 claimed over €300,000 while potentially dozens did not file tax returns for 2018 or 2019. Those who did file returns for 2017, 2018 and 2019 listed figures below their renumeration from the HIO.

Eleven specialised doctors received over €500,000 for 2020, the highest of which was €870,742 for a single doctor.  Two gynaecologists in 2020 jointly received a fee of €1.4m for outpatient care alone.

The report acknowledged that each national health system is vulnerable to fraud, inefficiency, and a series of other weakness; but there are key issues, the report says, which can be addressed to bolster the health care system.

The report covers July 2019 to December 2021.

In large part, it warns of the rapid rise in spending which is disproportionate to the GDP increase – noting that HIO funding was 30 per cent higher than initially projected by an actuarial company back in 2013.

The auditor general’s office stated that it was reasonable to expect demand for health services to rise following an increase in GDP but that higher demand was not expected to reach the same level as the higher funding.

Instead, there was a “dramatic” rise in expenditure disproportionate to the rise in GDP.

“Essentially, the HIO, having taken advantage of its increased funding, has tolerated and permitted the skyrocketing of its expenditure, to such a degree in fact that it is disproportionate to its increased funding.

“The result is that it violates the Gesy law.”

The office referred to the Gesy law which states that “HIO spending shall not exceed its funding”, adding that the organisation must reduced its budget by about 20 per cent.

Failure for the HIO to do so may necessitate other state institutions getting involved, such as the council of ministers and parliament.

 

It further claimed that the health insurance organisation (HIO) refuses to cover the costs incurred by the health ministry for patients who are referred for procedures abroad. It also said that the HIO refuses to cover the cost for patients who are referred to private hospitals for services which are not covered in clinics that are partnered with the HIO. It stated that similar issues arise with the purchasing of medications.

The AG’s report also claimed that the HIO refuses to cover the full cost from services provided at various clinics, such as at the Kyperounda health centre, pharmacies at the Polis Chrysochous hospital and 15 health centres in remote areas. The same issue arose for services provided by the Thalassemia clinics, dialysis units at all hospitals, the AIDS clinic and mental health units.

The AG’s report also accused the HIO of a lack of transparency in how it sets pricing for services procured, with some clinics charging different amounts for similar services.

According to the laws governing Gesy, the renumeration procedures of those partnered with the HIO for in-patient care must be set out by regulations, but instead “the HIO’s policy continue to lack transparency and has entered into contracts with hospitals on the basis of arbitrary and unobjective criteria, with different prices for each hospital”.

He also said that Gesy beneficiaries are illegally requested to pay directly for services provided by hospitals partnered with the HIO.

The report also accused non-Gesy partnered doctors of illegally receiving HIO funds.

It added the disclaimer that failures identified in the report do not constitute an accusation against specific individuals for abuse of power or for having committed criminal offences. Should there be any such incidents, that it for the relevant authorities to decide and investigate, the report said.