Hospital finance alert

2023-04-17 19:57:26

Posted Apr 17, 2023, 7:48 PMUpdated on Apr 17, 2023 at 7:57 PM

The Covid epidemic has stalled, but hospital finances are sinking into the red. Public and private non-profit establishments should end the year 2022 with a deficit of around 1 billion euros, underlines the alert committee on the evolution of health expenditure, in an opinion sent on April 15.

These hospitals should experience a “clear deterioration in their financial situation”, warns this group of experts responsible for informing the government and Parliament on the slippages in health spending. In 2021 and 2020, the same establishments had posted a deficit of 381 and 242 million euros.

Flight forward

The worsening of the deficits is all the more worrying in the eyes of the committee as the establishments were still able to benefit last year from the financing guarantee. This financial safety net was put in place during the Covid crisis to cushion the impact of the pandemic on the activity of hospitals, forced to massively deprogram their interventions.

For the alert committee, the risk is that “a dynamic of deficits sets in which would constitute a vanishing point for controlling expenditure”. The committee deems it important to quickly see more clearly to prevent a headlong rush. “It would be appropriate to accelerate the closure of the accounts of these establishments and to analyze the causes which lead to this deterioration”.

scissor effect

For the French Hospital Federation, representing public hospitals, this deterioration is the result of a “scissor effect” between the evolution of activity and revenue on the one hand and the increase in expenditure on the other.

Public hospitals, which forecast a deficit of between 1 and 1.3 billion euros for 2023, say they are suffering the brunt of inflation. Having had to collect the increase in the remuneration of their agents last summer (with the increase in the index point), they also saw their bills inflate for energy, purchases of materials, cleaning-type services etc

Threat to investments

At the same time, hospital activity has still not returned to its pre-health crisis level, which is weighing on revenue. Activity in obstetric surgery medicine in 2022 is 2% lower than that recorded in 2019, according to the FHF.

Difficult however, according to the Federation, to adjust the expenses downwards. “We are on extremely fluctuating activity development cycles”, argues Cécile Chevance at the FHF. However, the bulk of expenditure is due to staff costs.

“The increase in the deficit is particularly worrying because of its potential impact on investments”, warns Cécile Chevance. And to warn about the rise in construction costs and the rise in rates that are harmful to real estate projects.