Hospitals hope state will help pay loans

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Sudden recent changes in the board memberships of the Riga Eastern Clinical University Hospital and Pauls Stradins Clinical University Hospital are the result of problems with real estate management and construction projects at the hospitals, and there have also been signs of near-insolvency at both hospitals, the Health Ministry's State Secretary Solvita Zvidrina told LETA Tuesday.

The decision to alter the makeup of the boards had to be made quickly, explained Zvidrina. Therefore no competition for new members of the hospitals' boards was announced, in line with the law that stipulates that such isn’t necessary at government-run companies where it may affect the companies' capacity to act.

In addition, the Ministry is preparing to plead for government support for an initiative calling for the state to pay back the loans it guaranteed for eleven hospitals in Latvia, Zvidrina told LETA Monday.

The ministry’s liaison with the Cabinet pointed out that if sports facilities could be eligible for state funding to pay back loans on major construction projects then surely hospitals should too.

Zvidrina added that psycho-neurological hospitals are currently in the greatest of financial difficulties, as they do not earn income on their own but only provide state-funded services. The Center for Psychiatry and Addiction has received almost €8 million in loans guaranteed by the government in 2007, none of which has been paid back in light of a distant 2039 deadline.

Since 2002 eleven hospitals have taken guaranteed loans worth more than €200 million, of which more than €182 million will eventually be coming due to creditors and banks at some point.

The three largest university hospitals have received the bulk of the credits. In 2007 Stradins Hospital received a €66 million loan, of which less than €6.5 million has been paid back. It has until 2042 to service the loan, over a three-decade long-term period.

Similarly, Eastern University Hospital in 2007 got a €55.57 million credit not fully due until 2049, and therefore has not made any payments on the loan yet. Children’s University Hospital took a €26 million loan until 2040 and has paid back almost €3.5 million.

According to Zvidrina, the candidates were required to have experience of work in both the public and private sectors. Healthcare professionals and persons who understand how financial procedures in hospitals are run were sought, she explained.

Kaspars Plume, the new board member at the Eastern Hospital's board, will be in charge of procurement tenders and the hospital's properties, as the hospital has several buildings scattered at different addresses, said Zvidrina.

On the other hand, the Stradins Hospital's new board member Normunds Stals will take charge of construction for a new wing at the hospital.

Zvidrina made the decision to alter the makeup of the hospitals' boards following meetings with members of the hospitals' boards and seeing the problems the hospitals were facing. If necessary, the Health Ministry can release any hospital board member from their duties, she added.

Eastern Hospital's board chairman Viesturs Boka and board member Imants Rezebergs stepped down on February 18. Anita Slokenberga was appointed the new chair of the hospital's board, her colleagues on the board being Plume and Boka. Plume previously worked at the State Revenue Service and several Riga municipal companies.

On the same day, Stals was appointed a member of the board at Stradins Hospital to oversee the ongoing construction projects at the hospital. Dins Smits is the board's chairman, and Anda Caksa is the third board member.

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