The Ukrainians will have soon to forget about traveling to trade-union-run health centers. The state is going to privatize and put them up for a big international auction. The ostensible reason is that the Crimea must increase its tourist and recreational potential. There is a need for foreign experience, the foreign owner, and, what is more, foreign money. For the Ukrainian counterparts have shown their ineffectiveness in the past 20 years.
Borys Kolesnikov, Deputy Prime Minister of Ukraine and Infrastructure Minister, said during the recent routine visit to the peninsula that, in his view, the main contribution the current government can make to the Crimea’s development is privatization of the Soviet-era-built health centers by way of international auctions. “We should create [proper] conditions in the Crimea and carry out effective competitive privatization of the available health centers via international auctions in order to attract investors and establish up-to-date international tourist facilities. This will be Ukraine’s contribution to the development of the Crimea,” Kolesnikov told a press conference in Simferopol.
The government is in fact suggesting that the Crimeans lay their last trump card. Some experts say it is right, for Turkey and Russia (in Sochi) have considerably outstripped Ukraine, as far as health resort technologies and, moreover, the organization of recreation is concerned.
But are the Ukrainians not running the risk of losing by handing the Crimean trump card over to a private player? With due account of the unfair privatization in other sectors of the Ukrainian economy, questions like this do not seem to be farfetched or to make a mountain out of a molehill. Besides, there have already been precedents, when ordinary Ukrainians were forbidden to visit privatized recreational facilities.
The last trump card of the Crimea’s strategic development in the 2010s is that it is impossible to modernize Crimean health centers without privatizing them. It is no longer a question of whether or not there is a need for this. Leaving apart emotions and politicking, the question is different: are we not too late?
By Alla DUBROVYK, The Day
THE CRIMEA IS NOT A HEALTH RESORT REGION
Some widespread views have very little in common with reality, for, economically, the Crimea is not and has never been a health resort region.
Before the collapse of the USSR, the Crimea mainly performed a military function, which was such a closely guarded secret that many still do not believe this. It consisted of two parts: a military base (the fleet, coast guard, antiaircraft and antimissile units, the air force) and the military industry (instrument-making and shipbuilding). The third most important one was the function of the USSR’s “cannery”: canned fish, fruit and vegetables, wine. The Crimea looked like a “land of health resorts, orchards, and vineyards,” but “the all-Union health resort” did not make too much of a contribution to the economy. The resort was not expected to be effective, for holidaymakers paid a mere 15-20 percent of the recreation cost.
But the resort is playing a tremendous role in the employment (especially self-employment) of the populace. The seasonal servicing of holidaymakers is a sideline for 70 percent of the adult population involved in this field. And a short sea swimming season presents a budgetary as well as a social problem.
“DEPARTMENTAL GREED” KEPT STATE-RUN HEALTH CENTERS INTACT
Out of about 650 large facilities in the Crimea, 240 (37 percent) are health centers, 140 of them (60 percent) being state-run. And the share of those functioning all year round is still higher.
How did it come about that these facilities were not torn down to give way to “elite apartment houses” (as it happened to many trade union- and factory-owned health centers) during the “land construction fever” in the 2003-08? Oddly enough, it is narrow departmental interests that played a positive role. This is why these uniquely-located facilities managed to survive even without too much development.
Yes, “departmental greed” kept state-run health centers as a trump card for the Crimea’s tourist development. Although our business still prefers the buzz word “spa center” to “clinic,” there still is time to rectify the situation.
WE SHOULD HURRY UP
The Black Sea region countries (the Crimea’s main tourist rivals), which understood long ago that beaches were not the only attraction, have been rapidly developing medical tourism in the past few years. Conversely, the Crimea, which has preserved about 150 state-run health centers with old walls, pipes, and roads and the never-aging land plots with parks and beaches, has seen the destruction of recreational medicine in the past 20 years in spite of the 200-year-old traditions of health resort cure. This looked outrageous because the Crimean climate is more favorable for medical treatment than that of Antalya, Batumi, or Sochi.
Meanwhile, Turkey has made a most powerful breakthrough, becoming, before our very eyes, not only a popular sun spot but also (a little discussed fact) one of the world’s leaders in medical tourism – not in terms of bathtubs filled with rose petals but in terms of cutting-edge medical technologies, such as operations on the heart, eyes, joints, and limbs. Romania and Bulgaria are actively filling the niche of cosmetology and dental care on the European market by offering high-quality, but cheaper, medical services to the cautious and thrifty tourists from old Europe. Russia’s Sochi is already pondering what to do with 40,000 (!) new hotel rooms after Olympics 2014 and, naturally, have also begun to think of medicine.
Another major obstacle is that, while all our rivals have not only better conditions for seashore recreation but also wintertime downhill skiing tourism, the Crimea did not and will never have the latter. The only possibility to solve the seasonal problem that kills the entire Crimean economy is to fill the vacant health centers in a non-summer time. This can be done by way of conferences and concerts.
WE SHOULD ABSTRACT AWAY FROM “BEACH TOURISM”
The state owns a sector in the Crimea, which can and must determine the peninsula’s development and become an investment leader. But even the most “elitist” state-run health centers in the Crimea are not developing. Small wonder because most of them (100 out of 140) are run by “alien” departments which cannot and even have no right to make budgetary investments in them, for this would amount to misuse of funds.
The other side of the coin is that 250 round-year Crimean health centers have a one-time occupancy of about 50,000 places. They stay vacant for eight to nine months because there is no use going there outside the sea swimming season. If they were occupied from October until April, this could add at least one million annual visitors to the Crimea, who would stay for an average 20 days.
We should abstract ourselves away from “beach tourism.” This author once noted that Yalta, Ukraine’s summer capital, owes its very existence to… tuberculosis. It is the cure of this disease, which affected royal family members and intellectuals at the turn of the 20th century that made Yalta a city, a center of healthcare, national medical balneology and climatology, and formed an opinion in many generations that its climate is salubrious.
What can the present-day Crimean resorts specialize in today? In non-infectious diseases, the cure of which has a mass-scale demand in Ukraine and abroad and meets the Crimea’s climatic and balneological conditions. Doctors will say straightaway: it is rehabilitation after infarctions, strokes, and surgeries, the treatment of female and male infertility, etc. In addition, Europe’s population is steadily aging and the retirement age is on the rise, as is demand for a healthy longevity. But it is up to doctors, not economists, to dwell further.
A FORMULA FOR THE FUTURE = CLINIC + HOTEL
The Crimea can and must become an active player on this market. One should either privatize the state-run health centers by way of target-oriented investment competitions or use public-private partnership for a program of building a chain of multipurpose medical centers and clinics on the basis of health centers.
In any case, one must force the departments that run the health centers to begin reforming them and considering a health center as “clinic” + “hotel.” The Cabinet of Ministers ought to resolve that a “cure ward” should be licensed as a medical institution, while a “dormitory ward” should be certified as a duly “starred” hotel. Unless this is done, there will be no access to the international standardization of services. And after these facilities have been modernized, licensed, and certified, they should be put, as the world practice suggests, under the supervision of professional managing companies, including the well-known global chains.
IN LIEU OF THE AFTERWORD
It is quite clear what caused a staggering downfall in the defense-related sectors of the Crimea in the 1990s. Meanwhile, the causes were different in the Crimea’s food industry. State-owned property in Ukraine was being privatized mostly in 1992-2000, while the intensive mass-scale privatization was carried out in 1994-96. In the Crimea, however, privatization began as late as 1996, after an almost three-year local moratorium. But even after this, it was slowed down until 2000-02. The food industry had in fact gone extinct by that time.
In late 2010, health resorts and tourism (with emphasis laid on the revival of health resort cure) became for the first time the Crimea’s number-one priority – not because it was in vogue but because other priorities could well be put off by a few years. As for medical tourism, it is entirely a matter of today. All we need is a powerful spurt.
COMMENTARIES
A high-ranking trade union functionary has told The Day that the current Ukrainian trade union- and state-run health centers continue to receive, perhaps not ideally, people and offer services according to doctors’ prescriptions. But if these facilities are transferred to the private sector, it is not a fact that they will go on doing so. By handing them over to the State Property Fund and, therefore, putting them on sale to our or foreign tycoons, we are running the risk of losing these vital facilities. For example, a Dnipropetrovsk MP, Tsariov, has bought the bankrupt Lermontov Health Center. Yes, he had it well renovated and equipped. But ordinary people are unable to get there because only the elite can buy a tour there. In this connection, I want to emphasize one more problem. We remember very well that the Temporary Disability Insurance Fund used to partially pay for the cost of health resort tours, cutting the price by 30-50 percent. But this year the Social Insurance Fund has ceased to pay for health center tours. The point is that it is a triumvirate of representatives of the state, employers, and trade unions that in fact manages today the social funds to which businesses remit money. But the two friends – employers and the government – will always make a deal, unite against trade unions, and tackle these problems at their own discretion.
The official comment of the Federation of Ukrainian Trade Unions was surprisingly restrained.
Serhii UKRAINETS, Deputy Chairman, Federation of Ukrainian Trade Unions:
“There are more private than state- and trade union-run health centers in Ukraine today. What is shaping, to a large extent, the price policy in health resort services and smoothing over the differences is stiff competition on this market. The state’s only job during the privatization is to make sure that the sale clause obliges health centers not to change their specialization and the list of healthcare services, and then to see to it that these conditions are not breached.”
Mykhailo VOLYNETS, member of the Ukrainian Parliament:
“With the best will in the world, I cannot welcome the government’s intention to sell Ukrainian health centers. But a very bad situation has emerged around the health centers. The trade union bosses who took part in managing this property used it in order to enrich themselves, were receiving ‘kickbacks,’ and uncontrollably utilized social insurance funds. Our government took advantage of this situation and whipped up a scandal via the Prosecutor General’s Office in connection with erstwhile abuses. The new State Property Fund chairman, Yurii Kulyk, had to agree that health centers should be given away. It is not ruled out that there was some bargaining which resulted in a deal.
“But there is also the experience of other post-Soviet countries. I can foresee that the property of our health centers will be plundered away because there are dozens of hectares of the most valuable land on the balance sheet of many of them. This land costs thousands of times higher than the residual cost of dormitory and medical wards.”
Ihor HOLUBAKHA, chairman, All-Ukrainian Association of Tourist Operators:
“Unfortunately, in terms of organization, medical tourism is still on a rather low level here. The root cause is that most of the health centers are being run now by incompetent organizations. Recreation is not a duty for an ‘alien’ agency. So when they keep a recreation-oriented facility on their balance sheet, they do not pay enough attention to it.
“For this reason, I see a kernel of good sense in the vice-premier’s words. You can sell a health center for one dollar or even one hryvnia, but do so under certain conditions. For example, the condition is that the investor makes a commitment to invest 5-10 or even more million dollars in the development of this facility. The second condition is to ban reselling it. And the third one is that, in case the investor failed to meet his commitments, the state has the right to regain its ownership without having to offset costs, in order to seek another, more effective, owner.
“I do not think we should be afraid that there will be prices too high for the ordinary Ukrainian. The more health centers there are, the more competition between them, the higher the quality, and the lower the price will be.”
Andrii Klymenko works at the Yalta-based Taurida Institute of Regional Development and is editor-in-chief of Blackseanews.net
