RIGA, Nov 26 (LETA) - To ensure an uninterrupted provision of healthcare services to residents of Latvia's eastern region of Latgale, the government will take over 80.5 percent of shares in Daugavpils Regional Hospital and will invest EUR 4.6 million to stabilize the hospital's finances, the government decided Tuesday.

Such a measure is necessary to to guarantee access to healthcare in the region, improve governance and promote the strategic role of the hospital in the context of both national security and crisis management, given the geopolitical situation.

The government is taking over Daugavpils Regional Hospital at the request of the hospital's owners, as the hospital has run into severe financial trouble, the Health Ministry informs.

According to the government's decision, the Health Ministry will become the holder of the 80.5 percent stake in the hospital, the Daugavpils local government will hold 16.57 percent, Riga Stradins University (RSU) 1.52 percent, and Augsdaugava Municipality 1.33 percent in the financially ailing hospital.

The EUR 4.6 million provided by the government will be used to stabilize the hospital's finances, including to pay off outstanding debts to suppliers and cover short-term obligations.

Daugavpils Regional Hospital closed 2023 with a loss of EUR 5.8 million, according to the Health Ministry.

Although the hospital's new administration has introduced significant cost saving measures, creditor liabilities and cash flow shortfalls still pose a high risk to the long-term sustainability of the hospital's operations. The state's participation will ensure the continuity and long-term stability and development of the hospital, the Health Ministry stresses.

Health Minister Hosam Abu Meri (New Unity) informed the Cabinet meeting that once the hospital is taken over, a new interim board will have to be appointed temporarily, and a decision will have to be taken on whether or not the hospital needs a supervisory board. He also noted that the executive board has one member, while the supervisory board has four.

Economics Minister Viktors Valainis (Greens/Farmers) said that this is an extreme case where the state takes over a municipal enterprise on the verge of bankruptcy. Valainis noted the need to determine how the hospital ended up in such an extreme situation.

Prime Minister Evika Silina (New Unity) said at the Cabinet sitting that if the Daugavpils local government keeps its stake in the hospital, it is important to make sure that the people who led the hospital to bankruptcy no longer work there.