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Health Ministry owes over Dh62m to local, foreign medical firms

Abdullah Al Ahmadi, Director of Finance at the Ministry of Health said that the pending payments accumulated to millions over the last few years due to deficit budget allocation.

As the service providers have started frowning, the finance ministry has promised to settle the amounts within months as instalments or lumpsum payment.

“As per the agreement reached with the Ministry of Finance and Industry, an amount of Dh32 million is to be paid to five local medical companies, including Julphar, for purchases of medicines and medical equipment will be completed within this and next month,” Ahmadi said. Another Dh30 million as balance payment for overseas companies will be settled in two or three instalments. “The first 15 million will be paid this month,” added Ahmadi.

Meanwhile, the Pharmacies and Supplies Department has dismissed rumours that companies have stopped supplies to the ministry owing to outstanding bills. Humaid Shamsi, Assistant Under-Secretary for Pharmacies and Supplies underlined that the department was not facing any such problems and that the Ministry of Finance was taking care of the payments. When asked about the outstanding amount to be settled with Etisalat, Ahmadi noted that deficit budgeting has had a crippling effect on the overall functioning of the ministry.

“When I say deficit budgeting, it covers just about everything that comes under our purview.”

According to the finance director, there have been serious cash crunch at the Ministry of Health in the last few years as the budget allocation lagged behind the actual needs of the emirates’ growing health needs. “We are witnessing a dynamic population growth that in turn means more demand for medicines, medical equipment, qualified healthcare staff, and so on. The number of hospitals and healthcare clinics have increased and the healthcare needs of the population are also changing with the emergence of new diseases, new vaccinations, and new medicines,” pointed out Ahmadi.

Moreover, with the General Authority for Health Services (GAHS) taking over the health facilities in the emirate of Abu Dhabi since last year, the MoH has been faced with a 40 per cent reduction in its revenues. The shrink in exchequer is mainly because the ministry has been stripped off the authority to issue health cards in Abu Dhabi with the transfer of the Preventive Medicine Department in the capital to GAHS. “Health cards are one of the main sources of income for the ministry, bringing in almost 50 per cent and above revenue. In the next fiscal year, the revenues are sure to come down considerably,” said a senior ministry official.

Even in 2004, the ministry’s revenues incurred a loss of 1.01 per cent, while the expenses increased by .03 per cent when compared to the 2003 figures. As per the 2004 financial report, the total expenses for the year stood at Dh1,725,423,602.18 as against the total revenue of Dh555,723,601.29. The taking over of the General Authority in Abu Dhabi meant a reduction of 40.44 in our hospitals and 50.15 per cent in the total number of beds. In addition, there will be a decrease of 44.04 per cent in the primary health clinics, 27.27 per cent in central school clinics, 33.33 in dental clinics and 27.27 per cent child and mothercare centres. “But the reduction in expenses do not have a positive bearing as revenues are not coming in, and what’s worse, budget is in short supply,” he added.

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