Finance Ministry: Raise of minimum wage 'will lead to our collapse'

Finance Ministry officials admitted to the Knesset Health Committee on Monday that the expected salary increase of staffers due to the rise in the minimum wage will cost the public and voluntary hospitals NIS 200 million and cause their financial collapse. 

Committee chairman and Shas MK Yoni Mashriki commented that the financial compensation to the hospitals must be in full and on time and that the Treasury's answers on the matter “so far are insufficient.” 

The long meeting discussed the effect of the minimum wage on the functioning of hospitals run by non-profit organizations.

Medical centers owned and run by the government have no such problem, as the Treasury covers such costs. Mashriki called on the price committee to complete its work as soon as possible, to listen to hospital directors and the health funds on the issue, and to inform the committee of its decisions. 

At the same time, the committee called on the Health and Finance Ministries to respond within a time frame by compensating the hospitals so that they do not find themselves facing a disaster.

His committee will continue to follow the issue, and further discussions will be scheduled, Mashriki said.

The effects of wage increases in the past 

Hadassah Medical Organization director-general Prof. Yoram Weiss warned that the previous wage increase triggered a deficit of NIS 100 million in his hospitals, and further wage increases will bring about their collapse.

Weiss stressed the obligation that any salary update be forwarded to the hospitals within 30 days only – and not 60 or 90 days as has been done so far. “The law requires us to pay wages immediately – but the revenues from the state are delayed by two to three months. The health funds today owe the hospitals NIS 700 to 900 million, and this lack of flow leads the hospitals to delay payment to suppliers.” 

Nadav Chen, the director-general of Laniado Medical Center in Netanya, said that he had to seek donations from outside for the day-to-day management and salaries of the hospital's employees. Oliel Zion, the deputy director-general of Jerusalem’s Shaare Zedek Medical Center, requested that the mechanism of payment to the health funds, to which the state immediately transfers financial compensation for salary increases, be implemented at the hospitals as well.

Gaya Ofer, health coordinator in the Treasury’s budget, said that the money is transferred according to the hospitalization-day index that is updated once every three months, and it is transferred according to the law within 60 days. She admitted that from the expected salary increase, the public hospitals are expected to be damaged by about NIS 200 million,

According to Tamar Kalivski, director of the hospital control system at Maccabi Healthcare Service (the second-largest health fund), they requested that an update be made “taking into account that hospitals receive an amount in the basis of the payments, so it is not right to give hospitals a double amount – both a minimum wage increase and the fixed payment for the system.

This is duplication - and the health insurance funds can’t bear this. As for payment dates, it is in the law, so any update should come with compensation to the health insurance funds,” she added. 

According to Uri Fleishman, director of the Nurses Union, employees in the health system should not be held in uncertainty as to whether or not they will receive a salary increase, and salary revisions should be announced in advance.

Avishag Hornstein, head of accounting at Clalit Healthcare Services (the largest health fund), supported a comprehensive and balanced solution to be decided in the discussion of the price committee and will hear the houses and the health insurance funds together.