Home / Business and Politics / New debt restructuring for medicines will not be sufficient for the normal operation of suppliers – 28 million euros of new debt is created monthly

New debt restructuring for medicines will not be sufficient for the normal operation of suppliers – 28 million euros of new debt is created monthly

After the debt for medicines to wholesalers is fully restructured, which will happen by the end of this year from the state budget, payment deadlines for hospitals will reach the level of 180 days agreed with the Government two years ago, but this is no longer sufficient for the normal operation of wholesalers in the context of increased costs and drug pricing policies.

Namely, in addition to increased operating costs and inflation, interest rates on loans have risen, and an additional cost is incurred due to securing additional stocks of medicines in circumstances where there are shortages in the European generic drug market, wholesalers warned today at a round table organized by the Croatian Chamber of Economy. Minister Vili Beroš agreed with the wholesalers, emphasizing that the healthcare reform that has begun is aimed precisely at achieving financial sustainability. The primary goal is to increase hospital limits so that they can cover their costs, but also to increase the prices of services determined by the Croatian Health Insurance Fund, the participants agreed.

As revealed by Domagoj Dodig from the finance department at HZZO, hospitals order medicines worth 80-85 million euros each month, covering about 60 percent of that amount, while the remainder accumulates as debt, increasing by 28 million euros monthly. By October 31, the total debt of hospitals to suppliers amounted to 500 million euros, while the debt of HZZO to pharmacies was 260 million euros, meaning we are talking about a total debt of 760 million euros in the healthcare system.

– We are talking about total debt because it will all come due sooner or later, and the overdue debt is about 200 million euros less. A restructuring of 260 million euros is underway. If the restructuring is realized, with those amounts we would be within the framework of the agreement we had with the Government two years ago, but the point is that the circumstances have changed dramatically and that these are no longer financially acceptable payment deadlines – said Diana Percač, president of the Association of Wholesale Trade in Pharmaceutical Products and Orthopedic Aids of HGK.

As part of the last restructuring, 166.5 million euros have been paid from the budget so far. Currently, one of the last payments of 55 million euros has been made, today there is a payment based on final court rulings for the basis, and these are earmarked funds directed towards medicine suppliers, and additionally today and through Monday, there is a refund to institutions facing court rulings, and these funds are additionally earmarked for medicines and medical materials. When everything is summed up, both the restructuring of 55 million euros and these two items amount to about 85 million euros. Minister Beroš promised that the Government would adhere to the agreement on payment deadlines of 120 days from the date of invoice issuance, or 180 days due for hospitals, and 120 days for pharmacies.

– Of course, the goal is to significantly reduce that amount in 2024, and I believe we will achieve that. The adopted Croatian budget for 2024 at the consolidated level (Ministry of Health and Croatian Health Insurance Fund) of 7.1 billion euros shows a good trend that the healthcare system needs more, has received more, and will strive for that financial sustainability. As we see in the budget for 2024, the amount of budget transfer for HZZO has never been higher than 785 million euros, which is almost 10 percent more than this year,” says Domagoj Dodig.

The director of the Association of Employers in Healthcare Dražen Jurković warned that the debt restructuring model rewards the worst performers.

– The greater the debt, the longer the payment deadlines, the more money they will receive, and the rest can be spent on other activities. The solution is to increase limits and provide hospital directors with a serious framework in which they can operate and in which they have their responsibilities. For 30 years, we have had a model where the buyer determines the price of healthcare services, HZZO is the buyer of healthcare services, it is not the regulator, the regulator is the Ministry. You have a system where the directors of healthcare institutions, those providing the service, are not consulted at all. HZZO sets the price, which is about 40-50 percent of the real price of the service, and directors must operate in that environment. We need to find a model where service providers have the opportunity to negotiate prices – says Jurković.

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