Open Letter to the members of Slovak Parliament

THE GOVERNMENT LIQUIDATES SUPPLIERS OF THE SPECIAL MEDICAL MATERIAL; CONCEPT OF STATE DEBT RELIEF DOESN’T SOLVE THE PROBLEM

Ladies and Gentleman, Dear Members of the Council,

Please let us respond to the Concept of Debt Relief of healthcare institutions submitted to the National Council by the Ministry of Health of the SR in the form of an open letter.

The Slovak Association of Suppliers of Medical Devices (SK+MED) continues to be seriously opposed to the submitted debt reconciliation conception. Since the Concept materials submitted have not taken into account Association’s comments, we continue to strongly disagree with its content. Please note that the members of SK+MED are the key creditors of the hospitals whose claims the Concept has to address. Special medical material accounted for up to 38% of the total hospital debt at the end of 2016. At the same time, it should be noted that the submission report to the National Council on the material of the Concept of Debt Relief contains declarations that do not correspond with reality; such as that the Concept of Debt Relief is based on the principle of a equal conditions for all, with the current emphasis on the efficient use of public resources.

The proposed Concept of Debt Relief of healthcare institutions applies only to claims overdue until December 31, 2016, which amounted to only EUR 135 million. However, state hospitals owe nearly EUR 190 million to suppliers of medical devices and special medical material associated under SK+MED by the end of the third quarter of 2017. This proposal discriminates against a large group of suppliers of medical devices who will not be able to participate in the actual debt reconciliation process at all. While maintaining a non-discriminatory attitude, in practice, all outstanding debt past maturity should be reimbursed 100% to date and not only past maturity until December 31, 2016 and moreover in several steps.

In view of the above, we believe that the proposed debt relief Concept is inconsistent with the Constitution of the Slovak Republic, while its discriminatory model violates fundamental rights and freedoms on the part of creditors. Creditors’ participation in the Concept of Debt Relief in question is conditioned by forgoing interest and contractual penalties, and even requires suppliers to rebate on the principal, which, moreover, we consider to be an inappropriate interference with the right to own property guaranteed by the Constitution of the SR. In fact, the state forces creditors to compete for their own money, which the creditors have been entitled to and have long since paid taxes on – taxes were counted from the whole sum. Neither tax authorities nor the Social Insurance Company tolerate any delays on the part of suppliers. We consider this to be a precedent and a very bad example for business in Slovakia.

Hospital debt is constantly rising and our members are forced to sell their claims to third parties, and to finance operations, employee obligations and the state through bank loans, which increases their costs disproportionately.

Business operations of suppliers of special medical material are once again being unprecedentedly limited by the state in the form an Order no. 7/2017 issued by the Minister of Health SR, which limits the possibility of selling off claims to third parties. The Ministry of Health thus puts the suppliers of special medical material into a liquidation situation, when it fundamentally reduces the ability to refinance the years of waiting for the maturity of invoices by bank loans. These bank loans are often guaranteed by claims against hospitals and are conditioned by such transferability. With this behavior, the state threatens the actual existence of suppliers, who at the same time have to face the pressure to further reduce the prices of medical devices and the special medical material, as is being prepared by the Ministry of Health.

Ladies and Gentleman, Dear Members of the Council,

Efforts of our Association are directed towards ensuring a standard business environment for suppliers of medical devices and special medical material, where they are paid on time for their goods supplied, just as other suppliers are, as is the case in the surrounding countries, whose price referencing and electronic auctions we ‘copy’.

We believe you will carefully consider our objections and reject the proposed Concept of Debt Relief. Otherwise, we assume that many of our members will not participate in the Concept and will proceed in accordance with their individual needs as well as with legal options to achieve a higher rate of satisfaction of their claims.