The entrapment of the Health Insurance Organization in the system software administrator, the non-actual beneficiaries who remain registered in the lists of personal doctors, resulting in the HIO unnecessarily paying the relevant compensations, the abuses on the part of providers and beneficiaries, the acquisition of a large number of hospitals by specific investment funds and a possible collapse of the HIO may potentially endanger the General Health System.
The risk assessment report submitted to Parliament in view of the discussion of the HIO budget for 2026 lists a total of twenty-four possible risks for the HIO. The Organization of course also lists in detail the security measures it has taken, achieving, as it appears, a significant reduction in the level of risk for each case.
It is clarified that these are estimates, while the majority of the potential risks are due to external factors and not to factors that concern the GHS itself or its operation itself.
Specifically, based on the assessment carried out, 17 high-level and 7 medium-level risks were identified. After taking measures, the number of high-level risks was reduced to 5, medium-level risks became 18 and one risk remained at the low level, while it is noteworthy that three of the 24 risks concern or are related to the GHS IT system.
The financing of the GHS is included in the potential risks, with the OAY, however, citing the results of the latest actuarial study, according to which the System until the year 2032 presents strong sustainability and a large reserve. As is characteristically stated, at the end of 2024 the reserve in the GHS fund (around €700 million) is sufficient to cover the needs of 4.5 months (without contributions) compared to three months which is determined as a safety limit based on international practices.
GHS pays for non-beneficiaries
The payment of compensation to GHS service providers and mainly to personal doctors for individuals who are not beneficiaries of the System or do not even have their permanent residence in Cyprus, constitutes a serious risk for the General Health System.
Beneficiaries of the GHS are all individuals who have their usual residence in the areas controlled by the Republic of Cyprus and pay contributions to the System fund as employees.
“However, the Organization does not have the necessary information on individuals who leave the Republic of Cyprus permanently and are therefore no longer beneficiaries.”
This results in their not being deleted from the lists of personal doctors or from the System and the OAY continues to pay the relevant compensation.
The viability of the OKYpY also puts the General Health System at risk
A possible collapse of the State Health Services Organization will also have a major impact on the General Health System, according to the Risk Assessment report, with the OAY stating specifically: "A possible collapse of the OKYpY will have a major impact on the General Health System due to the fact that it is one of the main providers of health services, as well as due to the fact that it provides services of General Economic Interest. Also, gaps may be created in specific health care services where the OKYpY has serious specialization and there are no corresponding services in the private sector."
Abuses and increase in providers and beneficiaries
The abuse or excessive use of GHS services by providers and beneficiaries of the System is certainly one of the potential risks recorded in the relevant report. “The Organization addresses this risk with high priority, since it considers it very serious and has adopted a series of measures to mitigate it.”
Other risks, according to the Report, concern “negative publicity that may come from various sources, quality of services provided, abuses, misinformation of the public, etc., the inability of the Organization to respond to its role with full adequacy due to understaffing (recruitments were promoted), the possibility of loss of information security and loss of confidentiality and/or integrity of beneficiaries’ data, and litigation.
In addition, the GHS has recorded “an increase in the number of providers in non-targeted sectors, which has an impact on the finances of the GHS, while parallel pressures are also exerted through the increase in the population and, by extension, the number of beneficiaries”.
As pointed out in the Report, “the uncoordinated and continued increase in the number of providers registered in the GHS may create overpopulation in specific categories of providers, which will reduce the incomes of these specific categories. Furthermore, it increases the risk of abuse since in the effort of providers to increase their incomes, they may provide less necessary medical services which they will charge to the General Health Insurance Scheme”.
The problem “is made more intense due to the absence of a regulatory framework that would oblige doctors to retire”.
At the same time “with the increase in the number of beneficiaries, the needs for health services are increasing”.
Lack of legislation for the provision of services
“The lack of legislation that regulates the provision and operation of these services (palliative care and rehabilitation services) makes it difficult for the Organization to fully integrate these services into the General Health Insurance Scheme. The possibility of the risk occurring is very high due to the absence of a regulatory legal framework”. The report was completed last July and two months later the law on rehabilitation services was passed. The bill on palliative care is currently in the process of article-by-article discussion).
Risk from monopolies
This specific risk arises from “the acquisition of shares in private hospitals by investment funds, resulting in the creation of an oligopoly or monopoly”. The continuation of the phenomenon, as noted, may potentially limit “significantly the Organization’s negotiating position, at the risk of losing vital providers that are essential for the smooth operation of the System” while “financial pressure on the OHS for a continuous increase in expenditure” is recorded.
Software puzzle
Three of the 24 total possible risks for the General Health System concern the software system, with the OHS referring to the report and the elaboration of a scenario for taking over the management of the IT system from its competent departments, starting next May.
Pointing out its dependence on the project contractor and its subcontractors, the OHS states: “Due to the dependence on the contractor, the following may be observed: Monopolistic charges and the absence of alternative options from the Organization, which lead to increased costs.” It also notes “a limitation of the Organization’s options in matters of IT system development, since all services and software solutions must be offered by the existing contractor.”
The OHS proceeded with “a call for tenders for the purchase of consulting services for the formulation of its strategy regarding the development of the IT system of the General Health System, in the medium and long term,” while “internalization of services is being promoted, where feasible, and efforts are continuing “for greater automation of the Organization’s internal processes.”
A second related risk concerns the possible “inability of the IT system to meet the needs of the Organization” with the OHS stating that “although the IT system is already at a satisfactory level, the changes requested regarding new functions and information analysis are increasing at a significant rate. Any delay and/or inability to implement the changes has negative consequences”.
The Organization has proceeded to “evaluate through legal assistance the options regarding the procedures for public contracts that it may follow” while announcing a tender “for the purchase of consulting services for the formulation of its strategy regarding the development of the IT system, in the medium and long term”.
