State hospitals ‘committed to sound financial management’

Health Minister Constantinos Ioannou on Thursday refuted claims that the forced sale of public hospitals is on the cards unless the state health services organisation (Okypy) succeeds in putting its finances in order without state help.

He was commenting on the letter sent by auditor-general Odysseas Michaelides to the House health committee on Wednesday in which he said that it seems Okypy will be unable to cover its budget deficit by 2024, the date when state support is due to end. Okypy is the organisation running state hospitals.

“We share the auditor-general’s concerns for Okypy’s financial self-sufficiency, we monitor the efforts of its board of directors for rational management and we expect that in the coming period a curb will be recorded to the organisation’s passive finances, based on the new business and financial plan which is not reflected in the 2021 budget,” Ioannou said in a statement.

He added that Okypy had sent Michaelides a detailed letter in response to his observations. Okypy commissioned an audit firm to prepare a business plan that will include the financial forecasts in the medium term.

Public hospitals, which are bearing the brunt of the health crisis, are in a transitional process of economic and administrative autonomy, which has been slowed by the pandemic, the minister said.

“The government’s declared position is the upgrading of public hospitals, so that they can adapt to the new competitive environment created by Gesy and be able to cope,” Ioannou said. “The investments in capital expenditures for equipment and facilities in the next three years prove the government’s intentions and refute the allegations about the sale of public hospitals.”

He added that the vital service that public hospitals offer in dealing with the health crisis due to the pandemic, was precisely due to the support they receive from the state and the investments made in recent years to upgrade infrastructure and human resources.

“On this occasion, I reiterate our firm position that the support to Okypy and public hospitals is made with a strict commitment to sound financial management. We remain committed to the effort to upgrade public hospitals because we believe in them,” Ioannou concluded.

Michaelides in his letter, urges parliament to take action to avert the scenario “of the forced sale of public hospitals”, arguing that based on available data, Okypy’s failure to diminish its deficits by 2024 was deemed a certainty.

According to the law on the establishment of Okypy, the state may cover any deficits in the organisation’s budget for the first five years following the introduction of Gesy’s outpatient care which was introduced in June 2019. This means the state will cover any deficits until May 2024.