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SRMC Needs Financial Help While Moving Toward Greater Autonomy

Aug. 18, 2006–Despite asking for an extra $8.8 million from the General Fund, representatives from the Schneider Regional Medical Center on St. Thomas told senators during the second round of budget hearings Friday, that they hope to become a more autonomous agency within the next year.
Though the hospital became semi-autonomous, relying on the central government for payroll only, in 1999, Rodney Miller, Schneider Regional's chief executive officer, said increased autonomy would allow the hospital to go the bond market to seek additional financing for capital improvement projects, thus allowing the revenues generated by the hospital to be put toward operational expenses.
After the meeting, Miller explained that revenues generated by the hospital come primarily from patient care costs, and are currently deposited into the Hospital Revolving Fund to cover Schneider Regional's operating expenses. This year, the hospital is expected to receive an operating budget of approximately $46 million from the Revolving Fund, along with a recommended General Fund budget of $26 million.
During the meeting, Miller said the hospital's revenues are currently stretched to capacity, and are used make up for losses in both federal and local funding. He said the revenues are also used to offset "unrecovered debt," including $32.9 million in uncompensated care, and $8 million owed to the hospital by the V.I. Medicaid Program.
Money generated by the hospital also pays a portion of the staff's salaries (although a majority of Schneider Regional's personnel costs are still subsidized by the General Fund), and outstanding accounts receivable — including $1.2 million owed by the hospital to the V.I. Water and Power Authority, and approximately $8 million owed to the Finance Department.
According to Amos Carty Jr., the hospital's chief operating officer and general legal counsel, the government covered the cost of staff salaries while the hospital was transitioning into a semi-autonomous agency. Over the years, the hospital has had to defer some of its monthly payments to the government to fund various expenses, including the development of the Charlotte Kimelman Cancer Institute, which has compounded the debt, he said.
Carty added the hospital generally has to pay Finance $200,000 a month to cover the $8 million debt.
While the hospital also uses revenues generated through collections to reinvest in minor capital improvements, Schneider Regional still has to pay for nursing and other professional services contracts, Miller added. He said the hospital, due to a shortage of nurses, has had to contract individuals within the territory and abroad to fill gaps in many divisions.
"We have had a difficult time hiring and retaining qualified nurses here in the territory for a variety of factors, including lower-than-average wages, lack of full benefits, and a lack of support services such as housing and childcare," he said.
Miller said delays in processing Notices of Personnel Action (NOPAs) for many employees has also led the hospital to contracting services to fill critical vacancies. This is problematic, he said, because contract nurses are currently not given various government benefits provided to other employees.
"Increased autonomy would give Schneider Regional the ability to hire its own staff without having to rely on the V.I. government's hiring process," Miller said. "Without this, we are seeing our own nurses and other employees leave for the states, where they receive full benefits."
While awaiting an upgrade in autonomy status, Miller said the hospital would need more financial support from the government — starting with a General Fund infusion of $34.8 million for fiscal year 2007.
Miller said the hospital initially submitted a budget request of $32.1 million, (which has since been amended to $34.8 million) to include $5.5 million for the completion of the Cancer Institute, $2.3 million for personnel costs and $1 million to replace Schneider Regional's malfunctioning elevators. The Joint Commission on Accreditation of Healthcare Organizations, which granted full accreditation to Schneider Regional on Aug. 10, wants the elevators replaced, Miller has said in the past.
Miller urged senators to approve the hospital's request, and to provide additional financial support, until Schneider Regional is able to secure its own "independent" means of financing.
"We also urge this body to adopt increased autonomy legislation for Schneider Regional Medical Center before the end of this year, so we can continue to fulfill our mission to be the healthcare provider of choice to the residents of the Virgin Islands and the Caribbean," he said.
Miller added that increased autonomy and the elimination of the hospital's uncompensated care costs could push Schneider Regional into being a "driving force within the economy."
"There's a golden opportunity here, and we're missing it," he said.
Straying from the subject of the meeting, which was the budget, Miller and other hospital representatives once again touched upon the conflict between the Health Department and Schneider Regional, and discussed actions he said were taken by the department's commissioner to undermine the hospital.
In particular, Miller said that Health–which occupies space on the second and fifth floors of the hospital–does not assist Schneider Regional in paying for maintenance or utility costs. He also said that Health's services within the building reduces space needed for outpatient care, and takes away from the amount of revenues the hospital could be generating.
Present during Friday's meeting were Sens. Craig W. Barshinger, Lorraine L. Berry, Roosevelt C. David, and Louis P. Hill.
Sens. Pedro "Pete" Encarnacion, Juan Figueroa-Serville, Neville James, Norman Jn Baptiste and Usie R. Richards were absent.

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