Daugavpils hospital starts paying off debts

Daugavpils Regional Hospital is still in the process of resuscitation, but already has plans for development and mobilization of European Union (EU) funds. The new year hospital starts with a loss of at least €5 million. It is the preliminary balance sheet of last year that the hospital will inherit this year, Latvian Radio reported January 8.

Daugavpils Regional Hospital has managed to start the new year without tax debts and has been able to settle with delayed payroll costs for its employees. The financial difficulties of reducing and slightly stabilizing the financial situation were allowed by the received advance payment of EUR 2 million from the National Health Service (NVD).

However, the hospital is still on the hunt for solutions to achieve stable cash flow and is awaiting proposals from the task force for state involvement in the hospital's founders.

The future needs to be looked at with bigger plans, said Inta Vaivode, chairwoman of the Board of Daugavpils Regional hospital, revealing that a project was submitted last Friday to absorb European Union (EU) funds amounting to 3.2 million euros, which will significantly improve both the visual and medical work environment of the hospital.

"The hospital building is old, there are many places that need to be improved and repaired, where a lot of work and a lot of money need to be put in. Right now, just we are just extinguishing fires [..]  but the whole concept needs to change," Vaivode said.

Applying for European funds for Daugavpils Regional Hospital, according to Inta Vaivode, was allowed by the measures taken late last year and the EUR 2 million advance payment received, which has allowed both to cancel the status of a firm in difficulty and to fulfill the obligations towards its medics in the disbursement of salaries.

"That allowed us to pay our running bills. We paid all taxes on the last day of the year. The portion of the salary withheld from doctors for November has been paid out earlier this year and we have kept our promise to staff," Vaivode said.

A10 million euro debt to Daugavpils Regional Hospital was still forecast at the beginning of last year. With the attraction of public finances, the projected losses decreased to 7 million, and with an advance payment of 2 million euros made late last year, Daugavpils Regional Hospital starts this year with a financial burden of 5 million euros and plans for an increase in the hospital budget. However, it still prevents the hospital from pulling out of the “resuscitation stage.” Vaivode said:

“We're still in the resuscitation stage because we still have a list of creditors. It's not gone anywhere. Those millions are very big. Right now, we need funding of €4 to €4.5 million to pour into the hospital so you can pay all the creditors' bills. There's the biggest complication.”

Therefore, despite plans for the absorption of European funds, Daugavpils Hospital is forced to live in austerity mode. Even in a situation where the budget for the hospital will be higher this year.

“The contract [with the NVD] is close to EUR 50 million per year. This year the contract will be approximately 8% higher on a provisional basis, which will amount to almost EUR 3.5 million annually. But that money is not in the account. It is given through a service, and its absorption also takes expense - wages, medication, and everything. We've stopped all sorts of major repairs, acquisitions of goods that can be done without. Out of the hospital's funds, some new technology certainly won't be bought in. We can't expect money to fall from the sky.”

The state administration currently informally expresses an opinion on the nationalization of Latvia's regional hospitals, but the final solution has not yet been offered.

In late August, Daugavpils City Council issued a call for the state to take over the capital of the hospital. In adopting next year's budget, Health Minister Hosams Abu Meri (New Unity) said that this could indeed happen.

Grigorijs Semjonovs, head of Daugavpils Regional Hospital, submitted his resignation in early October, explaining his decision with fatigue and stressing that at least currently he does not want to take the lead of another hospital.

The hospital raised the alarm about a lack of money in early September but even earlier in the year, Semjonovs first warned of an imminent bankruptcy.

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