State to Spend Hundreds of Millions of Euros on Hospital Debt Settlement

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Cabinet okays hospital debt settlement (photo by TASR)

Bratislava, September 13 (TASR) – The state will give hundreds of millions of euros to hospitals to settle their debts after the Government passed on Wednesday a proposal for their settlement submitted by Health Minister Tomas Drucker (Smer-SD).

Hospitals should get up to €585 million from state financial assets for the settlement of their debts incurred by the end of last year. However, this step has yet to be approved by Parliament.

The debt settlement should apply to both state and non-state facilities. It will not be a one-off settlement and will be carried out in several rounds with older debts being repaid first. The debt settlement will be voluntary with the money only going to those willing to undergo recovery plans. The state wants to employ two forms of debt settlement: the so-called fixed discount agreement and an electronic auction. Hospitals owe the highest sums to special medical material suppliers, who criticised Drucker’s proposal even before the Cabinet session.
The health sector’s debts mounted to €647.24 million last year with state-run university and faculty hospitals making up the biggest portion of it, particularly €547.16 million. Health-care facilities under the remit of the Interior and Defence Ministries also have to deal with overdue debts, which amount to €24.89 million. Overdue liabilities of facilities under the remit of municipalities and regions that have been transformed into non-profit organisations reached €74.91 million.

This will be the fourth debt settlement in the history of the independent Slovakia. The first one came during the term of Mikulas Dzurinda’s (then SDKU-SD) government through a company called Veritel. The government spent some €664 million for this purpose at that time. The second debt settlement came with the first government of Robert Fico (Smer-SD). It provided hospitals with €130.2 million they were supposed to repay; however, their debt has since been forgiven.

The third debt settlement was carried out in 2011 during Iveta Radicova’s government (then SDKU-DS). Hospitals obtained €300 million to erase their debts at that time. The debt settlement should originally have been connected with hospitals’ transformation into joint-stock companies, but that was later halted.