Curious things are happening in healthcare these days. It would seem that new rules and operating principles should have long ago prevailed in the industry, given the Maidan, lustration, and so on. However, the situation is actually dire. For one simple reason: the industry is still "ruled" by those who profited from it back in the Yanukovych era, essentially holding a monopoly on the medical market and forcing everyone to play by their rules.
Over 48 billion hryvnias are spent on healthcare in Ukraine, making it one of the most expensive parts of the budget. Of this, approximately 5 billion goes to support state programs for the procurement of medicines and medical devices, which is especially pressing given the military conflict in the east of the country. This is exploited by medical "businessmen" who profit handsomely from this, despite the fact that their schemes have long been devised and are quite successful. It's actually quite simple. The money is stolen before the average patient even sets foot in a clinic. This is precisely why Ukrainians pay exorbitant prices for surgeries and medications. Because the Ministry of Health effectively manages only a tenth of the budget funds, the rest ends up in the pockets of medical moguls who successfully "master" budgets both in the capital and in the regions. Incidentally, in the regions, these crooks "work" much more effectively, given the virtual absence of oversight over corruption schemes in the medical industry.
The biggest profit for medical scammers is the procurement of expensive medical equipment. This, as the famous film puts it, is a veritable "Klondike and Eddorado"... The scheme works like a charm—for example, by replacing a couple of components on a device and turning it into something unique in its price. And, as the saying goes, no one can find fault. The overpricing of medical equipment often exceeds 200-300%, and a single transaction, for example, to purchase a particle accelerator for cancer radiation therapy, can easily cost several million dollars.
Ever since the time of the “legitimate” Yanukovych, schemes for the purchase of medical equipment in Ukraine were supervised by the notorious Tatyana Bakhteeva (Read more about it in the article Tatyana Bakhteeva: "cured"!), who still sits in parliament as a member of parliament from the Opposition Bloc. Working closely with her for many years are also well-known individuals—Herman and Volodymyr Fistali, sons of the renowned Donetsk doctor Emil Fistali. The chain has been in place for a long time and is well-established down to the last detail. Bakhteeva has been pushing for the Fistali brothers' deals since Prime Minister Azarov's time, making full use of her administrative resources. Their main gimmick was control over the state regulator for medical equipment and pharmaceuticals, whose leadership oversaw all matters related to the registration of medical equipment in Ukraine. The Fistali brothers, who by then had a de facto monopoly on the market, were supervised by Tatyana Bakhteeva, who provided them with full support at all levels, including political ones.
As a result, firms associated with the Fistal brothers became the de facto exclusive suppliers of equipment to all institutes of the National Academy of Medical Sciences, as well as to a number of Ukraine's largest hospitals. This brought colossal profits to the Fistals, while inflicting enormous losses on the state budget. Today, the schemes of the Fistals and Bakhteyeva have not only disappeared, but are even more effective. This was demonstrated by the scandal that erupted last summer, when news emerged of a search of the office of Medicalgroup-Ukraine, the Ukrainian branch of the German company B.Braun, which is controlled by the Fistals.
Prior to this, MedicalGroup-Ukraine had successfully sold counterfeit Egyptian and Turkish hemodialysis products under the guise of higher-quality German ones. The Medical Trading Company, also controlled by the Fistals, also participated in the scheme. Obtaining all the necessary registration documents was no problem, given Tatyana Bakhteyeva's resources. To further enhance efficiency, the "partners" established a network of offshore companies, which allowed them to inflate the prices of the medical products.
The use of substandard counterfeit hemodialysis equipment cost the lives of 10 Ukrainian patients. However, after a search and inspection by the SBU, the investigation suddenly stalled. Tatyana Bakhteyeva played a role here, managing to hush up the case thanks to her connections in high places.
Last year, the Ministry of Health, under its cardiovascular disease program, purchased the majority of medical devices from the Fistal brothers. The most significant item in the Ministry of Health's procurement list—mechanical valves (14,8 million UAH)—is a consolidated lot with specific, pre-determined quantities from three different manufacturers who compete fiercely globally and in Ukraine: St. Jude (represented in Ukraine by the Fistal brothers' company, Flower), ONX (represented in Ukraine by Meditrade, a company with Slovak founders), and ATS Medical (under the influence of businessman Mykola Kuzma). All signs point to a monopoly arrangement: no distributor is allowed to sell competing products without a shady agreement with their representatives in Ukraine. The Fistal brothers are accused of orchestrating a monopoly arrangement for this product.
So, we have what we have. Thanks in large part to the Fistal brothers, the Ministry of Health's projected prices for cardiology consumables are several times higher than in the European Union. And the prices for consumables for heart surgery won't just be high, they'll be outrageously high. Herman and Volodymyr Fistal, along with their "partner" Tatyana Bakhteyeva, will pad their pockets with tens of millions of hryvnias thanks to this so-called "excess profit." Meanwhile, cardiovascular disease is the leading cause of death in Ukraine. The state provides the necessary consumables to only 10% of patients. A single stenting kit will ultimately cost 60-70 hryvnias, with 2-4 stent systems being installed per operation. This means that consumables alone will cost the patient $5-10, not to mention the surgery itself...
The Ministry of Health's expected price for stents, taking into account the monopoly "fix" being prepared by Fistali and Bakhteyeva, will be 9,200 UAH. However, stent systems can cost as little as 3,900 UAH—that's the price they were purchased for in some regions of Ukraine at auctions in Cherkasy in the summer of 2005. It's easy to calculate how much each stent system will "fall" into the pockets of the Fistali "monopolists." It's precisely because of their corrupt schemes that the Ministry of Health is unable to provide consumables for heart surgery, even though, with the current budget, it could provide three times as many Ukrainians with the necessary medical devices.
Bakhteeva and the Fistals also plan to profit as much as possible from the state program for the purchase of mammographs this year. Bakhteeva has been obsessed with this issue since 2012, when she began actively lobbying for it while sitting in the Verkhovna Rada. And after the Maidan, her efforts were successful—last year, mammographs were included in the procurement plan of the Ministry of Health of Ukraine. 200 million hryvnias will go to the Kharkiv-based company Radmir, the only manufacturer of mammographs. However, their price will be 32% higher, and ultrasound machines 68% higher. The company, linked to the Fistals brothers, is Radmir's exclusive representative. Consequently, Herman and Vladimir Fistals will once again make their "intermediary" millions and billions at the expense of Ukrainians.
(to be continued…)
Oksana ZHURBA, “OLIGARCH”
Subscribe to our channels in Telegram, Facebook, Twitter, VC — Only new faces from the section CRYPT!