NIK: Will investments in health work out for us?

The system for giving opinions on investments in health care was established in 2016. The opinion on the advisability of investments in health care was intended to ensure the development of the infrastructure necessary to secure access to guaranteed services, in response to the health needs of citizens. The system was also intended to help prevent oversupply in the local market for medical services. This is because in the years preceding the introduction of the new solutions, a spontaneous yet haphazard development of the market for health services was observed, which meant that the demand for these services was not met evenly throughout the country.

The findings of previous NIK inspections confirmed that investments in health care were not always well planned, and their potential opportunities were not utilized. Among other things, NIK found that the use of acquired medical devices was not fully utilized, despite obtaining a positive opinion on the advisability of their acquisition, even after the implementation of the investment evaluation system. It happened that the audited units acquired medical devices without obtaining such an opinion.

It should be noted that obtaining an opinion on the advisability of investment in health care is not mandatory in Polish law. No regulation conditions the carrying out of an investment with obtaining a positive opinion on its advisability. Instead, the regulations specify the negative consequences of the absence of such an opinion. Until the end of 2020, it resulted in the award of negative points in the proceedings for the conclusion of a contract for the provision of health care services with the National Health Fund. However, from 2021, the consequence is rejection of the offer in such proceedings. In addition, obtaining a positive opinion on the advisability of an investment may be a condition for receiving financial support for projects co-financed by EU funds or grants.

Key findings of the audit

From the beginning of 2018 to the end of July 2023, the provincial governors and the Minister of Health, i.e. the "first instance" opinion-giving bodies, issued 1,700 opinions on the advisability of investments (OCI), of which 1,413 were positive opinions (about 83%) and 287 were negative opinions (almost 27%). 203 protests were filed against the negative opinions. The Minister of Health changed 122 negative opinions to positive ones, with as many as 90 of 103 opinions (more than 87%) changed to positive ones by the Ministry of Health. In the end, 1,535 investments received positive opinions, i.e. more than 90%, and 165 received negative opinions (less than 10%).

The submission of an application for an OCI did not always result in its issuance. Applicants withdrew applications when there was a risk of a negative opinion, even though the law did not provide for such an institution. They then submitted new applications for the same investment. It happened that after receiving a negative opinion, treatment entities applied for a positive opinion "to the effect", each time modifying the content of the application. This is because the regulations did not provide for limits on the number of applications submitted. The requesting entities most often submitted to an opinion only those investments for which they wanted to obtain financial support. In addition, a questionnaire survey conducted by the NIK showed that the applicant entities proceeded with almost 27% of the investments for which they received a negative opinion.

As many as 9 of the 12 audited medical entities (75%) implemented investments without submitting them for an opinion. In the NIK survey, more than half of the medical entities declared that they had implemented investments without requesting an opinion on their advisability.

For the audit, the NIK selected investments that, according to the completion dates declared in the OCI applications, should have been completed during the audit period. Meanwhile, as of the date the audit was completed, four of the 12 investments were still under construction. Only one investment was finalized by the deadline declared in the OCI application. For the remaining seven completed investments, the delay ranged from one to 23 months.

Of the eight completed investments, in three cases the implementation was in line with the investment description in the OCI application. In the other five cases, there were changes from the original assumptions. Most often, these related to the planned and ultimately purchased medical devices.

Half of the completed investments cost more than expected (cost overruns of 3.3%-40.6% of planned costs), and investments still in progress were found to have already exceeded costs by 38%-115%.

One investment has not been used at all for its intended purpose. This is the Janusz Korczak Regional Specialized Hospital in Slupsk Sp. z o.o., with which the NFZ did not conclude a contract for the provision of health services. This is because the NFZ did not announce a proceeding to conclude contracts for the provision of health services in the location of the investment, despite the fact that the Pomeranian Governor had issued a positive opinion on the advisability of the investment. The Hospital's Board of Directors was uncertain about the financing of services under the contract with the NFZ, so it decided to convert the hospital into a health treatment unit.

Opinion-giving bodies in most cases reliably performed their tasks in the area of issuing OCIs, although the Ministry of Health was found to have unreliable formal verification of half of the applications covered by the survey (4 out of 8). In addition, the NIK noted that the Ministry of Health did not ensure that governors had access to information about the investments it was reviewing.

The NIK audit of the Ministry of Health also found irregularities regarding the unit evaluations of the criteria in six OCIs. In the case of one application, the unreliable evaluation of the criteria caused the Minister - after considering the applicant's protest - to change the opinion to a positive one.

Other irregularities at the Health Ministry concerned the use of advisability opinions. In two cases, grants were awarded for investments whose material scope differed from the scope of investments for which positive advisability opinions had been issued. This was the case, for example, in the case of a grant for the modernization of the General and Oncology Gastroenterology Department of the N. Barlicki University Clinical Hospital in Lodz (June 2022 agreement), where in the application for an opinion the applicant planned to purchase 28 types of medical devices as part of the investment, while the grant application already showed only 12 types of such devices. The costing value of the investment in the grant agreement was estimated at about PLN 7 million, while the estimated cost of the investment subject to the opinion was more than twice as high. On the other hand, in the case of the subsidy for modernization works at the Institute "Pomnik - Children's Health Center" (agreement of June 2021), the cost estimate value of the investment under opinion exceeded the value of the subsidized investment more than 2.5 times (more than PLN 14.5 million vs. PLN 5.5, million). The reason for such a large decrease in the value of the investment was a significant reduction in the scope of renovation and construction works and a reduction in the total area of the investment.

The NIK auditors also showed that the Minister of Health provided a targeted subsidy to a medical entity operating as a research institute contrary to the provisions of the Law on Medical Activity. NIK notes that the Health Minister was not authorized to provide such a subsidy to a research institute. The amount of the subsidy was more than PLN 5.4 million.

The system for evaluating investments in health care was not linked to the assessment of health needs satisfaction. It was not possible to assess the extent to which health needs were being met through the implementation of successive investments, because there was a lack of a baseline: no target model for securing these needs had been created against which such an assessment could be made.

In addition, the Minister of Health, in accordance with the Law on Medical Activities, provided a subsidy to a research institute. The amount of the subsidy was PLN 5.4 million.

Applications

To the Minister of Health on:

1. Building a universally accessible IT platform collecting data on issued opinions on the advisability of investments and ongoing investments in health care, to ensure the best possible information for all stakeholders;
2. Revision of the IOWISZ form aimed at evaluating the advisability of an investment based on comparable and objective criteria, with equal use of the sources of information indicated in the aHIA; the investment evaluation criteria should ensure that the advisability of a given investment can be evaluated ex post.

To medical entities about:

1. To take organizational measures to ensure timely entry into the Health Care Records System of information on acquired medical devices and personal protective equipment.

De lege ferenda conclusions

1. Restricting the operation of Article 136(2)(3) and Article 139a of the AHV only to investments started after the entry into force of these provisions, that is, after January 1, 2021;
2. Clarifying the wording of Article 136(2)(3) and Article 139a of the A&E in such a way as to eliminate the possibility of circumventing them through the use by treatment entities of resources created by others on the basis of lending;
3. Amend the wording of Article 95d of the AHIA to exclude from the opinion replacement investments and modernization and renovation that do not directly serve to increase the number of services provided, or to limit the opinion only to investments that serve to increase the supply of health services;
4. Establishment in the OCI of an obligation for the payer to conclude or amend a contract for the provision of health care services to the extent resulting from the OCI application, if the investment is carried out in accordance with the application and within the stipulated timeframe, immediately after completion of the investment.

Source: NIK