High wage requirement puts hospitals in trouble: ‘Huge losses’

The collective labor agreement negotiations for public hospitals have begun again. It is still not clear how hospitals stand in this regard: the Dutch Association of Hospitals did not want to comment. FNV spokesman Daniel van Essen says unions are already pursuing high goals.

“We demand, among other things, compensation for prices, or wages that increase with inflation.” The wage clause will follow set in February, when the current collective labor agreement expires. But assuming that Current inflation rates Van Essen says that double numbers are not impossible.

Wage demand problems

Analysts at ABN Amro expect problems with these double numbers, according to a report on Monday. Because if wages rise 12.5 per cent, it will cost hospitals more than an additional €2 billion, the bank calculates. This is while the income increases by a maximum of 800 million euros, as a result of previous agreements with the government and negotiations with insurance companies.

This increase in wages could have a devastating effect on the profitability of both public and university hospitals. Although the collective labor agreement for unaccompanied children continues, unions want to meet again to discuss higher wages. If this pay increase comes, then “they will end up in large numbers,” says analyst Anja van Balen in a conversation with RTL Z.

financial hits

The bank says that if there is still a profit of about 500 million euros in a healthy year for the entire sector, then next year there is a risk of losing about 700 million euros.

This is in addition to the financial hits already falling in the sector. Hospitals face rising costs of purchasing goods and services and rising energy bills.

“Hospitals are losing nearly all the space that is still available for necessary investments in, for example, ICT and sustainability due to increased cost,” said Rod Bleu, a buyer of Intrakoop Hospitals. He also says margins in the sector are very thin.

Satan’s dilemma

ABN Amro agrees. According to Van Palen, this presents a “diabolical dilemma” for hospitals. Reducing costs or taking losses? The latter is undesirable, according to the analyst, although hospitals with year-long losses do not immediately go bankrupt. “This is acceptable in the short term,” she says.

But then there is no money for innovation, says the bank. This is very much needed for the future of healthcare in the Netherlands. “It is precisely now that he is expecting investments from the sector.”

Red numbers are not a good idea

Writing down structural red numbers, Van Palen says, is not a good idea. But failure to meet wage requirements can also cause harm. The sector is already understaffed, and if salaries remain behind, fewer and fewer people will be willing to work in the hospital.

The FNV also agrees, which sees many employees leave health care to work elsewhere or to be hired as self-employed workers under better conditions. One in ten healthcare workers may consider leaving the public sector next year He left. “The meager wage offer could push them over the line,” says Van Palen.

In the video below we explain why there is a risk of wage explosion: