July 18, 2007 — During two separate budget hearings in Frederiksted Wednesday, the directors of Roy Lester Schneider and Juan F. Luis hospitals both reported fiscal crises, caused primarily by tens of millions of dollars in uncompensated care to the uninsured.
Both also reported they are spending millions of dollars on expensive contract traveling nurses because, they say, their labor contracts with the nursing unions do not allow them the flexibility to offer higher pay for staff nursing positions.
“Have the two hospitals conferred with one another before testimony today?” Sen. James Weber asked Juan F. Luis Chief Executive Officer Gregory Calliste during Wednesday’s second hospital budget hearing. “Because the issues you raise are essentially identical to those raised this morning by Schneider officials.”
Calliste said the hospitals had not conferred.
Rodney E. Miller, Schneider’s CEO, said during morning testimony that the St. Thomas hospital was not compensated for $41.6 million of medical care in fiscal 2006. In the afternoon, Calliste said the St. Croix hospital had $39 million in uncompensated care, $12 million specifically because of the Medicaid cap. “Because of different funding formulas used to fund Medicaid and Medicare among the U.S. territories, we receive far less money per person than any other safety-net hospital in the United States,” Miller said, “… That federal cap on Medicaid funding is approximately $6 million. … That amounts to $60 in federal funding for each of our 15,000 Virgin Islanders eligible for Medicaid. In the states, Medicaid spending averages $565 per person.”
Medicare is similarly capped, but unlike Medicaid, the Medicare limits are not directly connected to uncompensated care costs.
“If the U.S. Virgin Islands were a state, instead of $37 million our Medicare funding would be $100 million,” Miller said.
Changing the cap requires action by the U.S. Congress. Delegate Donna M. Christensen has been lobbying her congressional colleagues to change the law for several years now.
Weber suggested enlisting doctors who came here from stateside to help.
“Mr. Miller, many of your doctors are from the States, are they not?” Weber asked. “They each have voting congressional representatives for their districts back home, probably from 20 or more different states. Could you see about having them write to and lobby their respective representatives about this issue?”
Miller also cited care for undocumented aliens and emergency care for the territory’s homeless as factors contributing to the high level of uncompensated care. He provided a graph showing a rapid increase in uncompensated care over the past several years.
“The proportion of self-pay — or really no-pay — patients is about 35 to 40 percent of patient volume,” Calliste said.
“Would it be fair to say some form of universal insurance or health-care coverage in the territory would greatly reduce your accounts receivable?” Sen. Juan Figueroa-Serville asked Calliste.
“Yes, absolutely,” Calliste replied.
“We’ve talked about it before, and we need to take that off the back burner and propose something shortly,” Figueroa-Serville said.
Both hospitals are substantially short of nurses. This is a nationwide problem exacerbated in the territory because of lower local pay. Schneider Hospital needs about 60 more nurses on staff and is forced to hire contract traveling nurses through stateside firms, Miller said.
Schneider hospital pays much higher rates for the traveling nurses, spending more than $7 million annually, Miller said. Juan F. Luis spends a similar amount, Calliste said.
A contract registered nurse costs the hospital about $115,000, while one hired permanently is paid about $50,000 on average, he said. Also, recruiting nurses from stateside is difficult because the average stateside starting pay is about $60,000 for an RN versus $30,000 locally.
“Is it possible to simply offer that pay locally?” Sen. Terrence “Positive” Nelson asked.
“That is what I’ve been working towards since I’ve been here,” Miller said. “It has become more difficult over time. The union contract, as it is currently, does not allow it.”
Responding to similar questions, Calliste said part of the problem was paying one staff nurse differently from another. Both directors said they regarded the unions as valuable partners and suggested the senators speak directly to the territory’s chief labor negotiator, Jessica Gallivan, to talk about the contract. Amos W. Carty, Schneider’s chief financial officer, said the issue was as much about what specific funds were available for what use as one of changing the labor contract.
“A portion of the cost of traveling nurses is funded from the same source as what we use to pay our staff nurses,” Carty said. “But a portion is funded from the General Fund. So there is a delicate balance.”
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