Tergooi Hospital is in dire financial straits. Due to rising costs and disappointing income, the hospital has to make significant cuts. The increased costs are partly due to a rise in interest rates, which has made recent new construction cost considerably more.
The Hilversum hospital has been forced to take measures to avoid endangering its ‘financial continuity’. The hospital has lost much more money due to other labor agreements, but also due to inflation and increased costs for materials. And new construction therefore puts a heavy burden on the budget: interest rate increases result in significantly higher costs.
The aftermath of the coronavirus, in which many staff members were absent due to illness and which meant that less care could be provided, also caused additional setbacks. Particularly because not all costs were covered by insurance.
Request to suppliers
That is why the hospital, through chairman Wolter Odding, has informed two hundred suppliers that no price increases can be accepted next year. And in so many words it is actually being asked to even lower prices, if possible.
Odding states in the letter that Tergooi ‘does everything possible to limit the financial consequences’. For example, he writes that the organization has been adjusted, although he does not say how. The hospital must also work more efficiently. An external agency has even been engaged to ‘streamline’ processes.
If suppliers have agreed with the hospital that they can index annually, or increase prices, the director strongly requests not to do this for the coming year. It is not yet clear what the consequences will be if a supplier does not comply with this request. Odding does say that it is open to proposals from suppliers that could contribute to a ‘lower price level’.
Tags: Hilversum hospital financial distress asks suppliers increase prices
