Das Hellas-Kartell
von Christiane Schlötzer, erschienen am 22. Juli 2010 auf Seite 3 in “Süddeutsche Zeitung”
Mit freundlicher Genehmigung der Autorin übersetzt aus dem Deutschen von Devrim Karahasan als:
"The Hellas Cartel" (published on 22 July 2010, in: Süddeutsche Zeitung)
It is intended to save Greece from bankruptcy with more than 100 billion Euros. This, however, could merely stay a pleasant dream. An investigation in Athens.
Had the country more servants and less masters, more men like this narrow-shouldered insurance agent, for instance, - then maybe everything would have been all right now in Hellas.
Pantelis Kavvadas puts his glass with sugar syrup back on the table; in it are green pistachios, considered a speciality on his home island Chios. As if he wanted to say: I still feel the ground under my feet, I know where my roots are. Next to the bulbous pistachio glass the man deposits a huge pile of papers, voluminous as three unleavened bread, stacked up one on top of the other. On the cover sheet there is elegantly written the line Elliniki Dimokratia, the official name for Greece.
Pantelis Kavvadas knows every single sheet within this pile of papers. He was a civil servant. As an 18-year-old he had started to serve for his country. "I wanted to do everything correctly", he says. After 29 years, though, he resigned from office, because the Greek Republic did not want to know what he - the obstinate one - had found out.
Four years ago, he ceased to be a servant. "Now I can sleep well again." He feels free, Kavvadas says. And he still owns this bulky report, which - when it was finished, in August 2006 - barely no one wanted to read. Wherever he brought it, it disappeared in the drawers.
A heart machine costs 11.000 Euros in Cyprus - in Greece: 43.000 Euros
Now, however, there should be many who ought to be interested, the EU commission, for instance, which sends its examiners nearly every week to Athens, and the International Monetary Fund, or politicians in Berlin. All those who want to save Greece with loans in order to prevent its bankruptcy. Because in case nothing happens in order to change what Kavvadas has written down, many billions will disappear in a black hole. That much one can already say.
The civil servant, back in the years 2003 and 2004, had a bad premonition. He was a state examiner for public hospitals, and he believed that the prices for medical products - such as dialyse filters (for patients with kidney disease), for instance, or “stents” (a medical implant in the form of a grid, used to keep the blood vessels open after interference) - were much higher in Greece than in the rest of the EU. The hospitals in Hellas are devouring huge piles of the state budget. The debts of clinics have increased to such huge amounts that Athens precautiously preferred to hide them from EU controls. When this was discovered, the official deficit numbers rocketed up, which ultimately added to the present crisis.
Kavvadas started to investigate on his own. He asked the Greek ambassadors in Belgium, the Netherlands, the UK and Germany for aid. The result was nil. Then he had the Greek trade representative in Den Haag write to the 15 biggest hospitals of the city to find out in the end that contracts with suppliers were a purely "private affair". Only from France came some data, and when Kavvadas also inquired towards the customs office in Cyprus, he had at least some proofs at hand.
For example, on defibrillators - machines which bring a flattering heart back into a regular pace: In Cyprus, such a device costs 11.000 Euros, in France 15.000. In Greece, however, they wanted 43.000 Euros.
Whoever speaks of fantasy prices here, prefers to do so in rather less quiet pubs
The same pattern with clinic material: "Here most things were four to five times, sometimes even up to ten times more expensive", says the ex-examiner. He remembers, for instance, that dialyse filters by the German company "Fresenius" were available in Cyprus for 12 to 17 Euros in 2005, in Greece, however, for 50 to 60 Euros. He also found out that offshore firms, registered in Cyprus or Barbados, were exporting and then reimporting again those products of international producers. Until they arrived in Hellas, however, they were miraculously more costly than before their long trip.
Whoever wants to know how the Greek state has driven itself into misfortune, can meet the unobtrusive gentleman in a garden pub in Athens where the noise produced by the hodgepodge of voices offers a certain shelter from eavesdroppers; he can also talk to politicians, who call back the next day and correct their previous statements. Or he can read the first court judgement that deals with Hellenic fantasy prices and that was recently enacted in Great Britain against the ex-Vice-President of the firm "DePuy" which belongs to the US multinational company "Johnson & Johnson". An artificial knee in Athens, it says there, costs twice as much as on EU average. Convicted was a manager for charges of corruption.
The EU had almost been euphoric, because Greece now seems to do so much in order to truly deserve the 100 billion Euros, which Europe and the Monetary Fund intend to give Athens over the course of the next three years; 22 billion of which are guaranteed from Germany: because Athens has cut down spending and pensions while it increases taxes, so that in consequence the huge deficit has already slightly shrunk.
In the labyrinth-like Hellenic health system, however, the EU controllers see the biggest risk for Greek recovery. For the simple reason that nobody knows how big the debts of clinics in 2006 truly are up until the present day and how much has still to be spent in order to pay old overpriced bills. Is it six or seven billion Euros? Or more? The restoration to profitability of the health system is now considered a key issue. Because it thus becomes evident, like on an operation table, what happens when a state itself is ill and loses control.
They wanted to transfer Kavvadas, the sinewy examiner, because he was asking too many questions and knew too much. For instance, that a hospital in Athens only used the dialyse filters of one specific firm. With the justification that they were "incomparable" to other filters. Another public hospital only accepted the material of yet another producer, and this, too, was allegedly "incomparable". The 51-year-old Kavvadas has only one explanation for this: It is a cartel which is operating here. And for the use of certain products there is money on the black market, handed over under the operation table over the pharmacy desk into the politicians´ offices. This, in turn, is added to the prices. In 2005, when the state already started to run out of money, all suppliers had accepted a fixed price agreement which reduced prices by 20 percent. Without much ado, as Kavvadas recalls. Which creates the impression that already there was something strange going on in Hellas.
When people are ill, they usually do everything to get well again, and nothing is considered to be too expensive to achieve this. And they are tormented by the question: where did I go wrong that I have to suffer that much? Even though the investigation into the causes is mostly in vain. When a state, however, is ill, the failure of organs can easily be detected. In the Hellenic case, a fundamental role is ascribed to a law of 2001. During that period, the Pasok party was ruling. The law with the number 2955 states that the public hospitals can do without any official calls for tenders, that is they can buy without searching for the cheapest offer, provided that products are "incomparable" or serve a "specific need of the patient". Further particulars are laid down in a decree.
Such decrees have been issued in over-abundance over the years, indeed that many that the exception became the rule, until nearly every human spare part, from the hip joint to the tiniest ankle fell under this category. Eye lenses as well as cardiac pacemakers. Long lists with maximum prices regulated the market, printed on government paper. A twelve page decree on dialyse filters even contained concrete product names with prices and company names, all over the European market. Some people in the government offices started to feel dizzy at the face of obvious violations against European competition law.
"This law will bring us with mathematical precision before the European Court of Justice", warned the then Vice-Minister for Health, Elpida Tsouri. She has written down her reservations in a letter to the then Head of Government Kostas Simitis. Tsouri anticipated what was to come. "We had created the conditions for a blackmailing attitude and behaviour on the side of the medical companies." This inevitably had to endanger the state´s financial situation.
One can meet Elpida Tsouri in the Parliament café; in front of her a dry sandwich that she barely touches. She is an MP for the ruling party Pasok, which now has to decide how the tremendous former debts towards the pharmaceutical companies will be paid for. The vote is scheduled for today. It could result in an awkward hour of truth, in which the law first has to declare all purchases of the past as "legal" before it can open the way for paying the bills.
"We knew that the prices were higher than in the rest of Europe", says Tsouri. The EU "would have needed to interfere many years ago". Tsouri speaks of a "triangle" of Greek intermediate traders of the pharmaceutical producers, the state and doctors. Lately a few bank accounts of medical heads of department have been opened up to find out that there were many millions parked there. Who filled up these accounts, is yet unknown. Tsouri pours down some water next to her dry sandwich and says, it was „impossible" that the producers, be it in Germany, Italy or Japan, "did know nothing" of these Greek habits. However, this is difficult to prove.
The pharmacy in the entrance hall of the hospital is a kind of stock exchange of information for the pharmaceutical representatives
The company "Fresenius" in Germany, for instance, refers to its "trading partners" in Hellas, and thus explains why it cannot give any statements on the price arrangements. To the question whether one could at least say that prices in Athens were in EU comparison on a higher or an average level, the company refers to "national regulations" such as "packaging conditions (glass, plastic, bags)". Even the German company "B. Braun" refuses to give any statements, "for competitive reasons", and rather speaks of European-wide "local market prices" of sold products.
Presently, the Greek journalist Antonis Karakousis receives many emails and calls, because he has written on a "cartel of white coats" in his paper To Vima. This cartel had profited over the years from lax controls and willing helpers within government offices. "Society does not want to pay for this any more", says Karakousis. And because the Finance Ministry, pressured by the EU and the Monetary Fund, is now searching everywhere for bank accounts with illegally acquired money on them, the stinking clinic waste meanwhile gets to be turned upside down as well. "There is a lot of pressure to change something", says the journalist.
If this is the case, there should be one man to be the first to have noticed, someone who directly works at the front, where he decides over life and death. The Head of Department is treating cancer patients and prefers to remain anonymous. In the entrance hall of his clinic the marble is shining, on his unit, however, there are five-bed rooms in which the stuffy July heat is standing still. Doors and windows are open, yet there is no current of air. The doctor goes outdoors, to a small café between a few plant tubs. He prefers not to talk within the walls of his clinic.
"This is a jungle", says the man with the round head. The jungle starts right at the entrance of his clinic. There is the pharmacy, and there many calls are being made. The staff of the pharmacy informs the pharmaceutical suppliers on the "prescription profile" of the doctors. He himself then incessantly meets the pharmaceutical representatives on the floors, the doctor says. Some clinic doctors had tried to prohibit this walking around. The Health Ministry, however, only recently allowed that salesmen could pop up three times a week. "They are here practically every day."
And the companies do not splash out when doctors eagerly prescribe. The consequence are overdoses and unnecessary treatments. "The patients come for a simple testing and leave the clinic with a highly specialized examination." Even graduate students of medical schools let their pick-nicks be financed by those firms. "Greece has become an El Dorado of the pharmaceutical industry."
What this means, Jannis Papadopoulos has investigated in detail. He is 72 years old, himself a doctor, and he works for a private health insurance. On his desk studies are piled up. Papadopoulos investigates what the Greeks swallow: on average nearly double as much as the Germans. The man believes that this turns people rather ill. An insider has sent him a list on which the company gifts for doctors for a single district on Crete are drawn up. It is a long list of names and sums.
The conservative opposition has criticized it all. Then it has continued the same way regardless
The Greek drug agency now wants to decrease consumption, because all this can no longer be paid for. At present the expenses for medication are said to be going down yearly by five billion Euros to roughly four billion Euros at the end of 2010. The agency is subordinated to the Health Minister Marlisia Xenogiannakopoulou. She recently negotiated with the industry on a subsequent price reduction for open bills. For years and years the international producers have earned huge amounts "with overpriced products", the Minister grumbles. Some of these firms handled the recent negotiations in a noteworthy way: they simply reduced the supplies until clinic doctors started to complain that test materials were missing for hepatitis, Aids and tuberculosis as well as for X-ray films.
"The state refuses to be blackmailed", the Minister announced. "The party in the health system is over!" What she is not saying, though, is that the state itself has invited the international pharmaceutical community to this very party.
And Minister Xenogiannakopoulou herself was already involved at the time when the great party began, namely in her function as the General Secretary of the Trade Ministry. Her signature is to be found on official papers which allowed the state to renounce to any calls for tenders almost all over the health system. This has enabled the Hellas cartel to grow.
The conservative opposition had criticized all this at the time and when it came to power in 2004, it continued likewise. Even an admonition from the European Court of Justice in 2007 did not bring any change. Only in June 2009, when the EU threatened to call the Court again because of ongoing violation of competition regulations, the law on the "fall from grace" of 2001 was dismissed in August 2009. First calls for tenders are announced for this fall. But this is a promise that had already been repeated many times.
When a doctor earns 2700 Euros net a month, he is susceptible for gifts
The Greek looseness international companies apparently did not seem to have objected to. Just to the contrary: they have arranged themselves with it in the best possible manner. Therefore, they accepted to wait a long time until bills were paid, as long as the sum in the end was okay. An investigation committee on the Siemens affair in the Parliament of Athens has recently found out that the company from Munich had not only paid slush money for contracts in the telecommunication business in Hellas, as was already known, but - as the 800 pages long report states - it also drafted 164 contracts with hospitals. The medical devices were overpriced, it is stated, and the purchases were run without any time-consuming negotiations.
The hospital "Evangelismos" is the biggest in the country, it is standing like a crashed tanker in the middle of Athens, not far from Parliament. On the floors there are faded blue sofas. The cardiologist Elias Sioras does not take any offence in this. What does hurt him, though, is that a styptic powder that costs less than 100 Euros in other EU countries is sold at 500 Euros in Athens. Sioras is angry also because a doctor like him, with 30 years of work experience, earns 2700 Euros net a month. This, he says, makes susceptible for gifts. Those who refused to play the game, were "a minority", says the doctor with some tiredness.
On the eleventh floor of Evangelismos Michail Theodorou has a fantastic view over Athens. This is quite appropriate, because the man formerly worked for the Greek air defence until he became general manager of the hospital three months ago. From a bird´s eye-view everything appears to be very simple to Theodorou. The clinic will henceforth possess a fixed budget - this, too, is a new invention before which controls were difficult to conduct. "We have to have respect for public money", says the chief at the well ordered desk and announces with pride that already within the first weeks of office, he has achieved a remarkable reduction in expenses. As already mentioned, viewed from above, there is still hope.
But below the upper echelon where the managers are residing, in the catacombs of the hospital, there exists a world that the manager himself has yet not sufficiently understood. Recently, for instance, when the prices for heart "stents" were reduced, he noticed that the doctors started to use "simply two instead of one stent".
"I am learning every day", says Michail Theodorou.