New minister – new director: Hospital chiefs replacements go haywire

Five chiefs over the span of five years. This record was set by the oldest hospitals in Bulgaria, Alexandrovska, reaffirming the rule that the hospital chief’s chair is one of the squeakiest in the land. As the old unwritten rule suggests, any change in the political landscape carries along replacements at the top of key hospitals. And vice versa: if a political party remains too long in power, it breads unbudgeable hospital directors. This is why, in these times of political instability and elections every several months, replacements at the top of hospitals became more frequent. Apart from the precedent at Alexandrovska, several other large Sofia hospitals switched three directors each in the last three years: Pirogov, the former St. Ekaterina, currently "Chirkov", the Oncology Hospital and the former government hospital, "Lozenets".

The frequent changes naturally bring forward the question as to the extent to which the existing rules for choosing hospital directors through contests, meet their original requirement to hold open and fair competition procedures that ensure selecting a quality candidate, or are they merely in place to serve as a fancy cover for the fact that behind the "contests" lie political appointments and pressure.

The issue is important also because interests in fixing people close to power in key hospitals are huge: the state hospitals reallocate billions of leva each year through public contracts with construction companies, equipment suppliers, pharmaceuticals, medical supplies, consumables, services, etc. All these have large corruptive potential. If we add the expected millions of Euro through the Recovery and Resilience Plan, the appetites grow far larger.

The GERB Guarantee

From late January 2021 until April 2021 in many of the state-owned hospitals the contests for new governance were carried out under the rules stipulated in the new Public Enterprises Act. According to them the governing body of large state hospitals should consist of an executive director, a state representative and an independent member; the first two are to be appointed by the principal of the hospital – the Ministry of Healthcare – while the independent member - by the Public Enterprises Agency. The goal is to have an independent corrective in the governing body of the large hospitals, but it is very debatable whether this is in fact the case. The contests were late, which then-ruling pary GERB defended with the Covid-19 pandemic and the need for amendments in the law to allow for hospital directors to continue working also as doctors. Finally, at the eleventh hour, just before the April 4 2021 elections the contests that took place in tens of hospitals were won by the sitting directors, who were all originally appointed during GERB’s government; some were directly affiliated with GERB politically. For example, the directors of the hospitals in Sliven (Vladislav Petrov) and Pleven (Tsvetan Lukanov) were previously MP candidates from GERB. The opposite is the case with the former director of Pirogov, Prof Asen Baltov, who, after winning the contest in April 2021 while GERB was in power, was sacked only months later by the caretaker government’s Minister of Healthcare Stoycho Katsarov; afterwards Baltov ran and was elected as GERB MP in the November 14 2021 elections.

The examples do not stop there: the competitions for directors in 2021 had a single candidate in almost all 20 of the larger state hospitals in Sofia and elsewhere in the country, and that was the sitting director. Some of these are Alxandrovska (Boris Bogov), Lozenets (Lyubomir Spassov), St Ekaterina (Gencho Nachev), St Ivan Rilski (Anton Petkov, Prof Dr St. Kirkovich – Stara Zagora (Yovcho Yovchev), St Georgi – Plovp (Karen Dzhambazov) and others. In almost half the appointments certain connections to GERB or one of their coalition partners, for example, the United Patriots, could be found.

New minister, new director

The predetermined contests with "one horse" sparked harsh political reactions against cementing GERB appointees in the governance of hospitals. Even in the 45th Parliament Maya Manolova introduced a bill of amendments that would entail new contests to be carried out in hospitals. Time quickly showed however, that the change on the political landscape will do this job, at least in the larger hospitals.

The minister of health in the caretaker government, Stoycho Katsarov, undertook several ostentatious changes of directors in large hospitals following juicy revelations about misappropriation and mismanagement: Lozenets, Alexandrovska, Pirogov, St Ivan Rilski are among them. It is telling that only in the case of the latter hospital is still under the keadership of the director, who was appointed under Katsarov, although there were indications recently for his coming replacement. The directors appointed under Katsarov of Lozenets and Pirogov hospitals, Radosvet Gornev and Ivan Poromanski respectively, were removed by Katsarovs successor, Asena Serbezova, while the temporary directors she appointed, Hristo Stoyanov (Lozenets) and Valentin Dimitrov (Pirogov) later won the contests for the permanent positions. Sebrezova herself during her mandate replaced the directors of the Oncology Hospital Stefan Konstantinov and the long-time director of St Ekaterina, Gencho Nachev, but then the next caretaker minister, Asen Medzhidiev, reversed her appointments. The chief of the Oncology Hospital prof Panayot Kutev failed to win the contest, announced by the last caretaker government, and it is now run by Vladimir Daskalov M.D., while the temporary chief of Chirkov hospital prof Nikolay Dimitrov was sacked by Minister Medzhidzhiev because of internal objections against him, and the hospital is now headed by Valentin Govedarski M.D., who subsequently won the contest for the permanent position. Now, only several months later, a new contest is underway for the chief position for the Chirkov hospital, the reasons for which are unclear.

The phenomenon: the acting director is selected for the permanent position

Winning the contest after one is appointed as acting director under a certain government is a standing practice, which has become the norm over the years, and one which reaffirms the suspicions that the contests are "fixed". As a rule, when the principal, the Ministry of Healthcare, lets a certain hospital director go, he or she is replaced by an acting director until the next contest procedure is over. When a minister is in a hurry to make the temporary director a permanent one, the contests are won quickly. For example, the temporary director of Alexandrovska, Atanas Atanassov M.D. who took the job in July 2021, won the permanent position only a month later, receiving higher points than his competitor and former chief of the same hospital, prof Boris Bogov. The story was the same when Atanasov was replaced by the caretaker Minister Asen Medzhidiev in the fall of last year for acting director Prof Atanas Yonkov, who later won the competition for the post. The replacement of Atanasov was then seen as a "GERB comeback" in the hospital, which for a long time was governed by Prof Kostadin Angelov, who later, in 2020, became minister of healthcare and is now one of the foremost people in Boyko Borissov’s party.

The same situation with winning the permanent spot by the acting director happened in the numerous shuffles of directors in Pirogov and Chirkov.

The world is large, and motives could always be found

With a few small exceptions - in which substantial evidence for mismanagement and misappropriation were put forward - like the drowning in debt Alexandrovska during Kostadin Angelov's tenure and the criminal transplant practices in Lozenets - many of the replacements of hospital directors were justified with formal violations at best while some were not motivated at all, which once again implies that the changes are mostly political in nature.

Minister Asena Serbezova removed the chief of the Oncology Hospital, Stefan Konstantinov M.D. in July 2022 with precisely such formal motives: "failure to carry out contests for academic posts, differences in the pricelists in accordance to the complexity of additional services upon patients' requests, non-appliance of the double signature system in four out of 11 audited public contracts".

Typically, administrative transgressions could always be found and this is why it is very easy to find some motives to sack a hospital chief - regardless if this is truly justified or not. For example, one audit was conducted by the current caretaker government to hit the Stoycho Katsarov appointee in Alexandrovska Atanas Atanasov, who went from a warrior against the inherited debts from Kostadin Angelov, to merely the one who accumulated more debts on top of the existing ones.

Lack of transparency

Although the idea of public contests is to have more transparency in choosing hospital directors, transparency is only seemingly present. The plans of the director candidates for the hospital are not published on the ministry's website and likely - not by accident. In June 2021 one of the candidates for the directorship of the Yambol hospital Panayot Dimanov M.D. unveiled how the competition between himself and Dimitar Runkov M.D., who enjoyed obvious protection from GERB and was an MP candidate from the party, had provided a plan of a "few random sheets of paper". While Dimanov at the same time had submitted a 60-page plan for governing the hospital. The commission was compelled then to cancel the contest because of the catastrophic performance of the "right" candidate. In turn, Runkov claims that the contest was dissolved in order to knock sense into his opponent. But he also implied certain "appetites" around the absorption of funds for the development of the new hospital ward were also present.

Another problem with the procedure is that the weight of each of the criteria for the final evaluation is not announced beforehand. The final placing and points are published at the end but the reasoning for awarding the points is not.

The appointments of representatives of the state and the so-called independent members in the hospitals, who are also selected in a competition, are also proforma. The piece published in Sega Daily from April 19 2021 "At parting: favorites and revenge in state hospitals" uncovered the shady practice of having the same dummy candidates for the independent member run in different competitions, who would eventually would drop from the contest and thus the competition is rigged in favor of the third candidate.

27 hospitals operate 2 billion leva through public procurement

The interest of the political parties to capture key hospitals can easily be explained given the enormous resource they reallocate through public contracts to certain commercial entities: construction companies, pharmaceutical, medical supplies, consumable suppliers, equipment, food, washing and dry-cleaning and more. This is too appetizing of a bite to be left in the background of all the schemes involving rings of affiliated and favorite companies, accumulating funds in the party’s treasury, etc.

According to data from the Public Procurement Agency in 2022 27 state and municipal hospitals are in the top 100 procuring entities with the largest public contracts. The contracts awarded just from these hospitals exceed 2 billion leva. The sums that these hospitals reallocate through public procurement vary between 350-200 million to about 20 million per hospital. The largest procuring entities are hospitals that order expensive medicines and medical supplies. To make the volume of subcontracted activities even clearer, we can take St Ivan Rilski or Plovp’s St Georgi as an example and see that its supplying contracts are comparable to those of the Ministry of Interior and surpass those of the municipalities of Plovp, Varna and Stara Zagora in volume.

Additional appetites grow from the allocation of funds for particular projects in hospitals:

Expansions of clinics, construction of new wings (St Panteleymon Hospital, Yambol, Chirkov Hospital); projects for modernization and purchase of highly expensive equipment; absorption of funds from allocated state subsidies and loans (Alexandrovska, Lozenets) and others.

"Public procurements in hospitals have a large corruptive potential, and the risk is midterm in several problematic practices: bypassing the Public Procurement Act and not conducting proper selection procedures, as well as installing discriminative (rigged) procurement conditions, which favor a particular candidate" - these are some of the conclusions form a sectorial analysis "Public procurements in Bulgaria’s healthcare sector - HowTo." by the Bulgarian Institute for Legal Initiatives, published in early 2022. The analysis gives an example how hospitals bypass procurements, order a particular brand of sausages or insert certain conditions that correspond to a specific candidate.

Maria Sharkova, attorney at medical law: There must be control by the court

According to Maria Sharkova, a medical law specialist, the main problem is that the competitions are not subject to judicial review.

She has experience in several contests for members of the board of directors of hospitals and has represented a candidate who appealed the results of a contest but shared that the practice of the Supreme Administrative Court for these procedures to be non appealable still stands.

"Since they cannot be appealed, the selection procedure is practically not subject to adequate control. I maintain that the question involves public enterprises and the idea of this legislation is to have transparency in the selection proceedure, but how could this be guaranteed if there is now judicial control?" she commented.

"We tried to refer the contests carried out by the Ministry of Healthcare during Minister Kostadin Angelov's tenure to the Public Enterprises Agency, and that the contest is not carried out in a translparent way, that the methodology for evaluating the candidates is unclear, as is the weight of each criterion. We did not receive a reply.", Sharkova pointed out.

The SAC acknowledges that the question concerns a decision of an employer and as such it cannot intervine because an employer's decision of whom they choose to work for them cannot be subject to judicial control. According to Sharkova, however, the question is about the governence of public enterprises, not about an ordinary company, in which the boss makes the decisions. In her opinion the notion that a minister can change any director he/she wants without needing serious motives, is illigitimate. "The idea of the Public Enterprises Act and the way contests are conducted is to guarantee that the companies will be governed by people who meet certain requirements. And the dissolvement of a governing contract would not rely on political factors or will be used to pressure the director in question. Because if you can sack or hire anyone at any moment at will, you are exsersising pressure on this person, including how he/she governs the public company, and thus making him/her dependent," Sharkova aserts.

The court: The minister does not act as a body of the executive branch

In a decision from March 2022 the SAC declared that the legal relation between the owner of the capital (the Ministry of Healthcare) and the commercial company is one between equal parties.

"In choosing members of the governing bodies of a commercial company with more than 50% state ownership, the minister of healthcare, as well as the commission, do not have administrative jurisdiction and do not act as bodies of the system of the executive branch of power. The issued discissions during the procedure are not administrative and are not subject to judicial control in terms of their legality under the Administrative Procedure Code. The new regulatory legislation for the procedure for choosing members of the governing bodies and control of public enterprises do not affect the nature of the relations between the company and the members of its bodies," the court states.

The Bulgarian version of this text can be found here.