Caracas Chronicles

“Dengue, malaria, cancer, AIDS, Zika, Parkinson, diabetes…you name it, we can’t treat it.”

Hector’s crestfallen demeanor after a long day’s work tells the story of the worries eating at him. As the director of a private clinic in the Altos Mirandinos, he’s in a position to know.

“Patients simply can’t find the medicines they need to treat their conditions, we’re not able to find enough medicines as well or to provide a full medical service with the same quality for them, and they’re dying because of it”.

 
What keeps me up at night is to figure out how to keep the clinic working on the brink of bankruptcy and under constant harassment from public agencies such as the tax administration.

At his clinic, he runs the show in terms of supplying the clinic: everything from buying medicines and equipment to dealing with bully governmental agencies such as SENIAT.

“Nationwide, they are dying by the hundreds, every day,” Hector says.

The problem is not a mosquito carrying a highly contagious disease. The problem is a crazy foreign exchange control regime that has created the most rampant incentive for corruption in Venezuela’s modern history. The one-two punch of regulatory control over the import of basic goods and medicines, and the ever increasing differential between the preferential and parallel rates create enormous incentives to fake the import of medical supplies.

“Over-invoicing” is the usual euphemism.

And as fake imports grow, real imports decline. The Cadivi mafia flourishes, and the ones suffering the consequences are (as usual) the most vulnerable ones: the patients.

Local pharmaceutical firms have been taken over by the government one after another, bringing local production to a record low.

The “Humanitarian Crisis” declaration by the National Assembly is about more than just semantics. It is not something created in a Doñas del Cafetal lab. It is a heartbreaking reality; one with deep roots in the failed economic model implemented by the government and its record setting corruption.

A Three Year Price Freeze

Let’s go back to the beginning. On June 26th 2013, the Superintendency of Fair Prices (SUNDECOP) enacted the “Providencia Nº294”. The document sets price controls for all the main medical services provided by private clinics.

This was the beginning of the current catastrophe. The regulation was enacted without even a semblance of consultation with the service providers it regulates. Even by 2013 standards, its assessment of the cost structure of medical services wasn’t realistic. According to Héctor, “it’s like it was drafted by people without a single clue about how the private health sector works.”

Three years on, controlled prices have not been revised at all. Not once. Prices for private medical services remain locked at 2013 levels even as accumulated inflation since then hits 740%.

Think about that, It’s virtually impossible to keep the clinic solvent given those numbers.

“What keeps me up at night is to figure out how to keep the clinic working on the brink of bankruptcy and under constant harassment from public agencies such as the tax administration,” Héctor murmurs.

 
We used to import critical medicines from Cúcuta, when we were not able to get them from our regular suppliers. Since the border was closed, we’ve had to stop.

Then, with his eyes wide open, he says “we’re not able to revise our prices, but we adjust wages when the minimum wage is raised. Do the math: almost three years with the highest inflation on the planet, with increasing variable and fixed costs, but with no changes on earnings. Los números no dan”.

How on earth are private clinics supposed to survive and provide proper medical services in those conditions?This instrument is a clinic-killer, a service-killer…and in this field, a clinic-killer is a patient-killer.

Clinics have had to shut down Intensive Cares Units and other key services or to come up with services outside the regulated ones in order to survive. Or at least, this is how Héctor says he’s managing to keep the boat afloat.

“We used to import critical medicines from Cúcuta, when we were not able to get them from our regular suppliers. Despite the cost (as Cadivi took too long to approve our dollars requests if we luckily got one, we had to go to the parallel market), it was worth it. Either you operate, or you close,” Héctor continues.

“Since the border was closed, alongside the crazy price in the parallel market, we’ve had to stop. Now, we often trade with other clinics. What some have in stock, others may need, and so on and so forth. But it is very far from being enough”.

If you thought that getting spare parts for your car or motorcycle was hard, imagine having to hunt for medical equipment spare parts.

 
The system is teetering towards outright collapse. Hanging in the balance, thousands of people’s lives.

“Around 70% of the medical equipment in the clinic I run is out of service due to a lack of spare parts”, Héctor clarifies. “These are all imported machines and technicians dedicated to provide maintenance services have fled the country, or their companies closed operations. The equipment doesn’t get regular maintenance, so it fails. We can’t get the spare parts – buying it on the parallel market would bankrupt us in a second – so the patient doesn’t get proper treatment. And you see, the clinic I run is in ‘good’ shape compared to many others. The situation outside Caracas in general is very depressing”.

To add some numbers to the equation, according to the Federación Farmacéutica de Venezuela (Fefarven), the government owes 3.5bn US dollars to the Health Sector as a whole. In effect, private clinics have run up huge debts with foreign suppliers, who’ve largely run out of patience. They’re now dealing in a Cash Up-Front world.

“And it’s worse in public hospitals. Venezuela’s public health system is so threadbare now that it’s common for clinics to get patients referred from public hospitals, who just can’t treat them. But clinics are between a rock and a hard place too”, Héctor concludes. Many times, clinics need to refer patients to other clinics.

The system is teetering towards outright collapse. Hanging in the balance, thousands of people’s lives.

Genocide is a tough word. But it is what comes out of Hector’s mouth when he speaks about the mismanagement of Venezuela’s health care system, and the fatalities it’s causing.

“A silent genocide” is what he calls it. He sees it every day.