Latvian hospitals feel energy price hikes and hope for state support

Take note – story published 1 year and 9 months ago

The rise in energy prices has hit most of Latvia's population hard. But the sudden increase in costs is also a serious challenge for authorities that consume both gas and electricity to ensure their performance, like hospitals. Major hospitals say they are looking for extra money worth millions to continue working, Latvian Radio reported on August 9.

A great deal of electricity is consumed in equipment that cleans surgical instruments and sterilization equipment.

"All sterile materials for all surgical operations and manipulation are prepared here. Most are automatic instrument washing machines. We have six and each spends 10 to 12 kilowatts per hour. Each of them. This is even the smallest in terms of consumption in this department. There is other sterilization equipment in which we process it all afterward. And there, the equipment itself is quite powerful. One unit is 60-64 kilowatts powerful and uses an average of 12-16 kilowatts per hour, and we have four. And in fact, this department works in 24/7 mode, and if we accumulate it during the year, these are impressive figures," said Rīga East Hospital (RAKUS) technology director Gints Cīrulis.

These facilities are at the heart of hospital work, because it is not possible to provide operations without them, and it is not possible to reduce the capacity to use the equipment. This department was set up in 2004 and, as the hospital's medical technology director Cīrulis says, it was not so popular to think about energy saving at the time, so, for example, the heat generated by the washing and sterilization process goes down the drain. In the future, buying new equipment will address this issue.

The second most electricity-consuming unit is diagnostic equipment, computer tomography, X-ray equipment, and special magnetic resonance devices, which can consume up to 25 kilowatts per hour during operation. There's a huge room in the basement of the hospital, all full of padded pipes of different sizes and looks. It is a ventilation system located under the operating blocks.

"You can see – the entire basement is full of venting systems, venting pipes. And it is necessary that we provide very high-cleanliness air in the operating room in very large quantities, because if at home, we exchange air twice an hour, here we vent 15 to 20 times an hour. And all of this, of course, is a very large amount of air and needs to be warmed and moistened. Or cooling in summer, respectively. And it consumes very large energy resources," said Cīrulis.

Similarly, intensive therapy patients are consuming a lot of energy. Depending on how many different life-saving machines are attached to one person, consumption varies, but each of the hospital's nearly 100 intensive therapy beds consumes an average of 3 kilowatts per hour, comparable to an electric kettle switched on continuously operating throughout the day.

The impact of rising energy prices is huge, said Imants Paeglītis, the hospital's chairman.

“For the second half of the year – we have now estimated – it will be an additional EUR 3.2 million for gas, electricity and heat alone. Well, if prices remain at the levels as they are currently in the following year, the impact is €6.5 million. And clearly the hospital has no internal reserves to cover the increases.

"Well, what this means in hospital – if nothing changes from the state and no aid is provided to hospitals to cover the costs of these adults, we will certainly be working with losses; and what it follows is that we will not be able to rebuild our fixed assets again, our facilities and do what normally needs to be done,” said Paeglītis.

He stressed that the increase in energy prices also increases costs for goods and services, which are affected by rising energy prices. For example, a new contract has been entered into for catering since August 1, which costs the hospital 35% more. Similarly, medical suppliers report almost daily increases in prices of goods, and new purchases of medical goods have a price level of 10-20% up.

Meanwhile, the Ministry of Economics (EM) explains that support for households is currently in place, but there are no support mechanisms for other target groups, including hospitals. However, the Ministry of Health will step in to find support. 

Further, with specific figures and calculations, the ministry is preparing to look at colleagues in the government to find a solution that would have no effect on hospitals.

Like RAKUS, other major medical establishments in Rīga and Daugavpils have found that without support from the state, it is likely that they will not be able to cover the costs. 

Rinalds Muciņš, head of Pauls Stradiņš University Hospital, said that not only gas and electricity costs are rising, but also water and waste management costs. Muciņš expects that the costs of electricity, gas, sewers, and waste management this year will require an additional amount of EUR 1.3 million from the hospital budget.

"We had planned, so in the 2022 budget, that we would have 2.9 million spending on these positions, but actually it would be 4.2. So one-third. Of course, we have not received direct promises; we have received [the news] that the situation will be viewed, monitored as far as possible, and so on.

"Of course, if nothing else is left, the hospital will have to cover [..] but we are, of course, looking forward to talks with the National Health Service about compensating for the increase in the costs involved," said Muciņš.

Children's Clinical University Hospital (BKUS) Board member Iluta Riekstiņa said – as early as 2021, the hospital felt an increase in energy costs, but this year, the situation is already critical.

“In 2022, I would say this – we have exceeded all, the most unthinkable increases. Now, our forecasts show us that BKUS will cost as much as €2.7 million. Of course, it is a huge increase, and of course BKUS will not be able to cope on their own. Like the rest of the hospitals, BKUS has very large numbers of buildings, areas, and electricity consumption, but there is also a huge amount of medical equipment,” said Riekstiņa.

Daugavpils regional hospital is already actively trying to save. For example, in foods whose costs have increased very significantly, soya is added to the meat in small quantities. Grigorijs Semjonovs, head of Daugavpils Hospital, is also very keen on possible state aid.

“For the time being, what scare me very much, are electricity bills. And the unknown for autumn [..] If we compare to last year, electricity bills increased from 20-25 thousand to 70-75 thousand euros. The main thing is that we understand that there is nothing to limit or reduce. Overall, we pay around 130-135 thousand every month. And if we look at the previous year – it was 53-55 [thousand euro per month],” says Semionov.

It is clear that hospitals will be very serious about the increase in energy costs. All hospitals say – they will certainly look for other solutions to save first, before reducing the quality of services.

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