Hospital arrears rose by HUF5.6bn or 15.0% m/m to HUF43bn at the end of June, the news portal Napi reported citing data from the Treasury. The average monthly increase in arrears was much stronger than either last year or 2017 and has increased consistently since. The pace of arrear accumulation has exceeded last year’s by two and a half months as the increase in arrears started only in the middle of 2018, the portal commented. Stronger wage competition might be behind the faster increase in hospital arrears, it noted, while we think that the government’s practice of settling the sector’s debt might have also contributed to the deterioration in hospitals’ financial discipline. The relatively high increase of arrears in June in particular was also possibly due to expectations for a new hospital financing model, the portal commented.