Regarding the finances of the former Klaipėda hospitals – to the General Prosecutor’s Office

The Seimas Health Affairs Committee (SRK) listened to Klaipėda University Hospital’s information about the hospital’s financial situation, and also examined the 2022 budget of Klaipėda University Hospital’s branches (hospitals that operated before the establishment of Klaipėda University Hospital). performance and internal control assessment results of the internal audit. The committee made a decision regarding the financial situation at Klaipėda University Hospital.
Raised wages – increased debts
The Seimas Health Affairs Committee reminds that in 2023 January 1 Klaipėda University Hospital started its activities. It was established by merging three personal health care institutions: Klaipėda Seamen’s Hospital, Klaipėda University Hospital and Palanga Rehabilitation Hospital. A temporary manager was appointed to lead the new medical facility, who held this position until 2023. October, until the permanent manager took office.
In the conclusion of the decision, the Seimas Health Affairs Committee noted that in 2022 at the end of the year, before Klaipėda University Hospital began operations, Klaipėda University Hospital made a decision to increase the wages of hospital employees by an average of about 30%, due to this decision alone, hospital expenses in 2023 increased by about 8 million euros.
After conducting the 2022 internal audit of the Klaipėda University Hospital, it was observed that “the decision to carry out such a significant increase in the full-time salary for employees before the reorganization is completed raises doubts about its reasonableness in terms of economic and efficiency and the consequences for the motivation of the employees of the remaining institutions, ensuring resources during the continuation of the activities of the reorganized institutions. In this case, it is important to mention that such an action led to additional costs for the institution and significantly increased severance pay for employees who terminated employment due to the reorganization.”
The 2022 performance and internal control evaluation audits performed in the former hospitals prior to the establishment of the Klaipėda University Hospital showed that the hospitals were possibly operating in violation of the provisions of the Law on Public Institutions, the Law on Health Care Institutions, the Law on Public Procurement, tax and labor laws, other legal acts and internal hospital documents.
The burden on the new manager
in 2023 the total loss of the Klaipėda University Hospital every month was about 1.2 million. EUR, of which 666 thousand EUR – due to an increase in the wage fund, and 534 thousand. euros – due to a sudden increase in expenses, the reason for which will become clear after receiving the results of the financial audit. Preliminary 2023 the financial result of the hospital is 12.3 million. EUR loss, and in 2024 even 18.5 million is planned for the end. EUR loss. It should be noted that, based on the information provided by the Klaipėda Territorial Sick Fund, the financial result of the personal health care institutions planned to be reorganized was positive.
The financial problems of the Klaipėda University Hospital started to be solved only after the current head of the hospital took office, until then no real actions were taken. Currently, problem solving is carried out in several directions: by reducing costs (abandoning useless contracts, making only necessary purchases, etc.), optimizing the wage fund (reducing positions, especially in administrative departments, abandoning duplicate functions, paid supplements to wages in some branches of the hospital optimization, etc.), increasing income (increasing the range and volume of personal healthcare services, promoting outpatient services, renovating the activities of the sleep center, expanding the activities of pain center 3, etc.), increasing economic efficiency (merging hospital branches, abandoning duplicate functions of departments and etc.) etc.
The Health Affairs Committee of the Seimas noted that the Ministry of Health did not control the situation and was unable to ensure that the merger of Klaipėda Seamen’s Hospital, Klaipėda University Hospital and Palanga Rehabilitation Hospital into one legal entity would proceed smoothly and that the functions and rights of branch managers would be redistributed, especially in matters of financial management. Therefore, the newly appointed head of the Klaipėda University Hospital cannot pay full attention to managerial and organizational issues in order to organize the provision of the highest level of personal health care services, as he has to solve accumulated financial and legal problems.
Please rate the actions
On Wednesday, the Seimas Affairs Committee made a decision to apply to the General Prosecutor’s Office with a request to examine the hospitals that operated before the establishment of the Klaipėda University Hospital in 2022. the results of operational audits and to evaluate the legality and reasonableness of the actions of the managers of these hospitals and the decisions of the Klaipėda City Municipal Council before merging the hospitals into one legal entity.
In the SRK decision, it is suggested that the Ministry of Health, together with Klaipėda University and Klaipėda University Hospital, prepare and approve a plan of measures to improve the financial situation of Klaipėda University Hospital and implement it.
In order to assess the efficiency of the medical institutions that operated before the establishment of the Klaipėda University Hospital (Klaipėda Seamen’s Hospital, Klaipėda University Hospital, Palanga Rehabilitation Hospital), the rationality of the use of resources and assets, the legality and reasonableness of the decisions made, the SRK recommended the Ministry of Health to organize operational and financial audits in these institutions performance.
SRK also suggested that the Ministry of Health Protection and Klaipėda University consider the possibility of connecting the Klaipėda Children’s Hospital to the Klaipėda University Hospital and address this issue to the Klaipėda City Municipality.
Prepared by Vilija BUTKUVIENĖ