Public vs Private

Getting caught in the revolving door

Madrid health chief Juan José Güemes was forced to resign from a Swiss medical company The case reveals the dangers of conflicts of interest for politicians who move to the private sector

The former Madrid health chief, Juan José Güemes.
The former Madrid health chief, Juan José Güemes.Carlos Rosillo (EL PAÍS)

The pressure was ultimately stronger than all of the messages of support from high-ranking officials of the Popular Party (PP). On January 15, Juan José Güemes announced his resignation as a board member of the Swiss company Unilabs.

In November 2012, the firm acquired a majority stake in UTE, the winner of a public tender to carry out clinical analyses at six public hospitals in the Madrid region. The service was privatized when Güemes was Madrid's health commissioner, between 2008 and 2010.

Güemes claims that he respected the law and that he is leaving Unilabs so that nobody will be able to question his tenure as Madrid's health chief. He says that his actions have been spotless from an ethical perspective. Viewed in that light, the problem would seem to be one of mere esthetics.

The Güemes case has once again raised the alarm over the phenomenon known as revolving doors - the frequent transition of high-ranking officials from public service to the private sector and vice versa, and the conflicts of interest it creates. The issue is especially alarming when health officials are involved, particularly at a time of increasing pressure to privatize parts of the public health system across Spain.

Are there sufficient tools out there to ensure that the goal of these privatizing reforms is really to improve the efficiency of the public health system, rather than simply to benefit specific business interests? No there aren't, say all the experts consulted for this story.

We need to make progress on the transparency of the system"

"We need to make progress on issues relating to the independence and transparency of the system in order to dispel suspicions of conflicts of interest," says Ildefonso Hernández, vice-president of the Spanish Society for Public Health and Health Administration (Sespas).

"For a long time, professional and scientific societies have been arguing that one of the essential ways to improve the solvency of the national health system, and this is applicable to other areas of policymaking, is to develop good governance guidelines and tools," says Juan Oliva, president of the Health Economy Association.

The Güemes incident could serve as an example. Spain has no independent health oversight agency to shed light on political decisions on health policy, as other countries do (like Britain's National Institute for Health and Clinical Excellence, known by its acronym NICE).

Certainly, no body of this nature was offered a chance to analyze the effects of privatizing clinical analyses at the six Madrid hospitals in question, nor of assessing the efficiency of this step, the benefits it would bring, or the guarantees it would provide users in terms of upholding quality standards. As a result, it cannot be independently concluded that this privatizing project will be a beneficial step for the public health system.

If it had, then the former health commissioner could have switched to private industry without worrying about his motives being questioned in the future, since his decision would have been supported from the beginning by independent specialists. Likewise, Madrid residents would be guaranteed that the decision was made to improve the public health service, and nothing else.

Spain has no oversight agency to shed light on health policy decisions

Güemes justifies his actions by pointing out that Unilabs did not directly win the tender that he himself convened in 2008, and that if the Swiss multinational is now in charge of this service, it is because last November it bought the majority stake (55 percent) that one of the winning companies had in the business.

The former health chief also said that his resignation from the board of Unilabs is a reflection of his desire to sever his ties with business activities so he may express himself "with complete freedom" on his vision for the future of the public health system.

Ildefonso Hernández, former director general of Public Health at the Health Ministry between 2008 and 2011, feels that the underlying problem is that Spain offers no guarantees the way that NICE does in Britain.

In fact, he adds, Spain has a clear lack of transparency in all issues relating to health management. And he is not just talking about private management of public resources, but also about traditional public management. To this day, it is impossible for anyone to access something as basic as the differences between waiting lists among the regional health systems. What's more, trying to compare waiting lists between individual hospitals is a pipe dream. This is not because the data is not being compiled, but simply because it is not being released. Or at least it is not being adequately published.

Experts note that it would take more than a monitoring agency to assess measures of the type taken by Güemes or by his successor Javier Fernández-Lasquetty, who is now in the process of privatizing the management of six hospitals and 27 health centers across the Madrid region.

Trust in health authorities is earned slowly, but it can be lost suddenly"

Hernández mentions another basic tool to add transparency to the system: ethics committees in charge of monitoring potential conflicts of interest and guaranteeing the independence of policy decisions - not just in the appointment of public officials, but also in the choice of experts or scientific societies who serve as advisors to government and who hold sway in policy decisions that affect health and the economy in significant ways.

When Oliva talks about adopting good governance tools, such as agencies or committees, he is not just talking about these particular instruments. He is also referring to a broad set of measures like "building a much more transparent system in terms of the information that is provided to users, professionals and citizens; seeking formulas to participate in the decision-making with health professionals and citizens; developing guidelines and structures specific enough that people with decision-making power are accountable and able to justify their decisions based on criteria of efficiency, effectiveness and quality at all levels of the health system."

But not even oversight agencies or ethics committees would have any real relevance if there is no prior social conviction that they are necessary.

"If there is no awareness of the importance of the values of participation, accountability and observing codes of conduct, then we will create hollow agencies devoid of any value," says Oliva.

Ricard Meneu, vice-president of a health research foundation called Fundación Instituto de Investigación de Servicios de Salud, insists on this point. "It will be hard to make substantial progress if we as a society do not share a few minimal principles of good governance, and as of today at least, these do not seem easy to agree on," he says.

We run the risk of decisions being made with less regard for the public good"

Meneu suggests that "what's probably needed is greater social activism," and he mentions the US website Open Secrets, which monitors and provides information about revolving door situations and lobbying groups.

A conflict of interest, according to the definition provided by the Organisation for Economic Cooperation and Development (OECD), occurs when there is a collision "between public interest and the personal interest of public officials, in which personal interest could unduly influence the way they perform their tasks and official duties."

And as Hernández notes, this type of situation is "all too frequent." Proof of this is the fact that it has affected European health agencies to such an extent that the European Court of Auditors intervened late last year, after the EU Parliament expressed concern over information regarding questionable behavior affecting the European Food Safety Authority and the European Medicines Agency, among others. In its report, the court stated that none of the agencies under scrutiny (also the European Chemicals Agency and the European Aviation Safety Agency) "adequately managed conflict-of-interest situations."

There is a similar case involving Manuel Marín Ferrer, a Valencia government official in charge of overseeing the private management of La Ribera Hospital, which serves 250,000 residents, between 2000 and 2007. From one day to the next, the company he supervised hired him as director of its own health department.

Antonio Burgueño made the opposite journey. He was an executive at the health insurance firm Adeslas, where he pressed for the privatization of health management through government concessions (the so-called Alzira model). From there, he jumped to Madrid's Directorate General for Hospitals, where he is encouraging privatization of the running of public hospitals, using the same formula he designed at Adeslas.

The legal limits in Spain

- The OECD defines a conflict of interest as a collision "between public interest and the personal interest of public officials, in which personal interest could unduly influence the way they perform their tasks and official duties."

- Public health agencies, including the European Food Safety Agency and the European Medicines Agency, have been caught up in a controversy over their lack of independence or supervision with regard to conflicts of interest. The European Court of Auditors said in an October 2012 report that none of the agencies it scrutinized was managing situations involving a conflict of interest adequately.

- Law 5/2006 regulates conflicts of interest among members of government.

- Article 7 of that law stipulates that high-ranking officials have the obligation to refrain from involvement in matters relating to, or of particular interest to, businesses that they had a relationship with, either as executives, advisors or managers, in the two years prior to holding public office.

- This link also extends to spouses or partners and immediate relatives.

- Article 8 establishes that in the two years following departure from public office, these same officials will not be able to provide services to private companies directly related to the responsibilities of their former public post.

- A direct relationship is construed when public officials, or their superiors at the officials' request, or the heads of dependent agencies, enacted decisions involving those companies.

The problems arising from conflicts of interest and incompatibilities are not limited to private management of public health centers.

"With a few exceptions, the people in charge of pharmaceutical policymaking or in the medicines agency soon end up joining the staff of the main companies they had been supervising," says Ricard Meneu. This trend is not exclusive to the health sector, but it is especially serious when it happens in this field. "The population's trust in health authorities is earned slowly, but it can be lost suddenly. That's why there must be no doubt regarding the real interests behind the decisions made by health authorities," says Hernández.

Besides these ethics committees and watchdog agencies, there is the law. Can anything more be done to guarantee transparency? Law 5/2006, which regulates conflicts of interest among members of government, places limits on high-ranking officials' ability to work for companies directly related to the post they held, for a period of two years after they leave public employment. Güemes respected this period of time between leaving the Madrid health department and joining Unilabs, so he did not break the law.

The legislation could be made tougher by extending the period of ineligibility, but if it gets too strict, with extended quarantines, it would excessively penalize work in the public sector, notes José Ramón Pin, of the business school IESE. It creates the risk that capable individuals who could bring their talent to the public sector might not do so because of the problems they would later have returning to the private sector. "Quality would go down among public officials," explains this IESE professor of governance and leadership in public administration.

"Spanish law is highly imperfect about setting limits to conflicts of interest among high-ranking public officials," says Oliva. "You cannot have the same consideration for a person who has developed a career in a given field and temporarily joins the public service, and another whose professional life is linked to a political party and who jumps from public service to the private sector."

Asked whether the law should be changed, Ricard Meneu replies with a quote from the book El buen gobierno sanitario (or, Good health governance), which he co-authored. "It's not so much about creating new laws as about getting the current laws to be observed and enforced - which does not mean they cannot be improved on - but without losing track of the importance of enforcement and supervision over mere enactment."

"If the state structures in charge of maintaining independence and regulation are weakened, we run the risk of decisions being made with less regard for the public good," Ildefonso Hernández concludes. "And that is what's happening with the privatization of public health."

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