Our View: No one believes hospitals will become financially viable

Did deputies, or anyone else for that matter, need Auditor-General Odysseas Michaelides to inform them that public hospitals will not become viable by 2024, when the state financial support is scheduled to stop? Is there anyone that actually believes public hospitals, that are, in theory, managed by political appointees but are run by militant unions, fully backed by the political parties, could ever become financially viable entities?

The fact is Michaelides told us nothing we did not know, but he ensured the letter he sent to the House health committee would get media coverage by concluding, without any rational justification, there will be “a forced sale of public hospitals.” This will happen because Okypy, the state medical services in charge of hospitals, will, according to Michaelides, almost certainly be unable to cover its big deficits. And as the law stipulates that by 2024 the public hospitals must be self-sufficient, the government will have no choice but to sell them off, he claimed.

It is difficult to disagree with his premise, given the wages being paid to hospital staff and the restrictive work practices imposed by the unions that ensure the waste of huge amounts of money on overtime and the colossally inefficient use of resources. Public hospitals still operate on civil service working hours, which means afternoon and evening work earns overtime rates. Michaelides mentioned a case of a doctor doubling his annual income thanks to overtime pay in excess of €100,000. Hospital nurses start on salaries that are 50 per cent higher than what experienced nurses are paid at private hospitals.

Of course, there is no way public hospitals will ever become self-sufficient given the annual payroll and the fact that most of their work force has civil servant status. What is worse is that even under Okypy, they are run like all public organisations, inefficiently, which means a big waste of resources.

Where Michaelides was wrong was in his alarmist conclusion, that the hospitals will be sold off. First, no investor would touch hospitals employing ‘civil servants’. Second, the political parties would never allow this to happen, because keeping hospital in public ownership is an ideological issue. They blocked the sale of Cyta so they are unlikely to allow the sale of hospitals.

Health Minister Constantinos Ioannou felt obliged to issue a statement responding to Michaelides, saying costs would be reduced and that hospitals would be upgraded through investment in equipment and facilities. This was meant to reassure the public. There is no reason to disbelieve the government on the upgrade, but it is difficult to believe Ioannou’s assertion that sound financial management is on the way. Public sector unions have always blocked sound financial management, because the taxpayer always picks up the bill for the waste and inefficiency. And this will be the case with public hospitals, long after 2024.