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Hospital faces large deficit

23.11.2020 - 14:32
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 Mynd: rúv
Landspítali national university hospital currently needs to balance its deficit next year to the tune of 4.3 billion krónur. It has asked for permission to work off the deficit over three years. It already appears likely some patient services will face cuts. Ólafur Darri Andrason, head of finance at the hospital, says the budget saving demand reduces the hospital’s ability to deal with challenging projects.

Old deficit a challenge because of the pandemic 

Landspítali’s budget deficit is not new. Last year, before COVID-19, it stood at 3.8 billion krónur and the hospital set itself the goal of reducing it to zero through cost-cutting measures over three years. Landspítali streamlined its senior management structure and reduced the number of departments as a direct result. 

The director of Landspítali submitted his draft financial plan for next year to the health ministry on the 12th November and RÚV requested a copy from the ministry. 

The plan states that the old deficit weighs heavily against the hospital’s ability to deal with the challenges that accompany the pandemic and that some of the cost-cutting measures have needed to be postponed this year due to the increased pressure on hospital services. 

Landspítali predicts it will run with a budget surplus of 1.1 billion krónur this year instead of the planned 1.7 billion. Despite this, the deficit will grow next year. 

This will leave a deficit of around 2.7 billion krónur that the hospital plans to subtract from next year’s budget provision, in accordance with the health minister’s instructions. Based on budgetary plans for next year, this will see Landspítali funded with 69 billion krónur next year, while its financial plan predicts it will need 73 billion, based on services remaining unchanged. 

The financial plan states that the hospital will, if nothing changes, face the need to adjust budgets down by 4.2 billion krónur, which is half a billion more than the figure as it stands this year. 

The hospital’s director writes that it is difficult to carry out cost-cutting during a pandemic and therefore asks to extend the three-year grace period granted last year by a further year, to 2023. That would mean the hospital has to cut spending by 1.4 billion krónur next year and the financial plan argues that is the maximum possible figure without significantly affecting Landspítali’s ability to function in its role as the main specialist hospital for the whole country. 

Among other things, Landspítali plans to save 300 million krónur next year by postponing some of its bigger buildings projects, 100 million with more targeted testing requests and by closing the gynaecology ward at weekends, and 160 million by re-examining shift rotas and hiring summer relief staff later. 

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