A bill passed last week by the Senate will, if signed into law, forgive tens of millions of dollars owed to the V.I. government by the territory’s two hospitals.
The measure was added as an amendment to 29-0216, a bill under consideration at last week’s Senate session. The amendment was proposed by Sens. Ronald Russell and Carlton "Ital" Dowe and approved during the session. It now goes to Gov. John deJongh Jr. for approval.
The Juan F. Luis Hospital (JFL) on St. Croix owes about $50 million to the government. The Roy Schneider Regional Medical Center on St. Thomas owes less, but hospital CEO Alice Taylor was not able to say precisely how much when contacted due to the holiday on Monday.
According to Jeff Nelson, the CEO at Juan F. Luis, the money represents wages paid to some employees by the government.
"Over the years the government has paid for salaries for some of the NOPA (notice of personnel action) employees," he said.
The money was supposed to have been repaid to the government from the hospital’s budget, but it never was. The result over the years, said Nelson, was a staggering debt on the books.
"On our balance sheet we owe that money," he said.
Nelson said if the bill is signed into law and the debt forgiven, it will be one step toward returning the hospital to fiscal solvency, but there’s still a long way to go.
"We’re grateful to the Senate for what they’ve done. At the same time, we still owe a lot of money."
The hospital is in debt to its vendors to the tune of $27 million, and Nelson, who became chief executive officer less than a year ago, has spent a lot of his time negotiating with the companies the hospital owes that money to.
"Going forward we can pay our way," Nelson said, "but there’s just not enough money to pay all our debts."
The biggest single bill in the hospital’s accounts payable is the Water and Power Authority: JFL owes WAPA $5.6 million. Other vendors include pharmaceutical suppliers and local contractors and service providers.
For several months, Nelson has been saying what he repeated Monday – the hospital needs an infusion of cash, not just to pay the old debt, but to replace old equipment with state-of-the-art gear and improve or replace the physical plant.
The most desirable outcome would be for a large influx of capital from the government – either the territorial or the federal government – but "the system is not flush with cash."
Failing an influx of new money, the choices are to reduce the size and scope of the hospital and its services, or to find a way to reorganize the hospital’s structure, so that it remains a government-owned, not-for-profit institution, while allowing management to still attract investors.