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Hospital Board Hears Good News, Bad News

The Juan F. Luis Hospital is making strides in terms of service and teamwork, but any good news is tempered by the constant reminder that the budget numbers for St. Croix’s medical center continue to be grim.

Chief Executive Officer Jeff Nelson said at Wednesday night’s meeting of the hospital board, "We have to find a new infusion of capital."

The board approved a finance-committee recommendation to increase the room rate and the rate for related services so that they equal the fees charged by the Schneider Regional Medical Center on St. Thomas. They also directed Nelson and his staff to examine alternate forms of management and fiscal structures for the hospital.

"We have to look alternatives to see how we can increase our revenues," said board member Deepak Bansal.

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There was plenty of positive news during the course of the meeting, including the purchase of a mammography machine. A mammogram program will begin in about six weeks.

The hospital is also making progress under its agreement with the Centers for Medicare and Medicaid, known as CMS, the agency that certifies U.S. medical facilities for meeting required standards of care. Following a CMS inspection last summer, the Juan F. Luis Hospital was found deficient in 11 of 23 categories and faced the possibility of losing the right to charge the federal health programs for services. After entering into an improvement agreement with CMS in December, the board was told Wednesday that the agency is pleased with the results so far.

According to Justa Encarnacion, a nurse who heads up the CMS committee, the agency "is amazed" by the hospital’s response, both in terms of how quickly they have responded and how positively. "We’re not perfect," she said, "but we’re moving forward."

The board heard a report from Peter Abrahams, director of facility operations, that the hospital’s solar electricity program is coming on line and showing results. The system, which was paid for through a Department of Energy Grant, generates 24,000 watts of power on a sunny day, and is even able to manage more than 3,000 watts when the sky is cloudy. That’s electricity the hospital doesn’t have to buy from the Water and Power Authority.

But given that the hospital’s electric bill runs between $350,000 and $400,000 a month, it isn’t always easy to see the direct cost reduction.

Abrahams also reported that reconstruction of the surgical wings is under way, as is the air conditioning project for the emergency room.

But Abrahams had more somber news about another project, the generators installed by the Stone House Group to cut the power bill from WAPA.

The generators work fine, but haven’t been used in months because the hospital doesn’t have the money on hand to pay the contract. Nelson said typically that would be a simple decision to make – the contract saves the hospital money so pay that bill. But it’s not nearly that easy, not when the hospital owes $28 million to a host of suppliers and creditors.

For all the good news, there was plenty of the other kind as well.

Two reductions in funds from the territorial government, one in December and one in January, have created a $1.8 million hole in the budget, Nelson reported. Further, the closure of the Hovensa refinery will have a serious impact on the hospital’s budget just as it will on everything else on St. Croix.

According to Nelson, the hospital will lose between 300 and 400 patient procedures from the refinery’s employees, plus an estimated 15 percent reduction in outpatient services. That will translate to an additional $3.5 million loss in anticipated revenues.

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The Juan F. Luis Hospital is making strides in terms of service and teamwork, but any good news is tempered by the constant reminder that the budget numbers for St. Croix's medical center continue to be grim.

Chief Executive Officer Jeff Nelson said at Wednesday night's meeting of the hospital board, "We have to find a new infusion of capital."

The board approved a finance-committee recommendation to increase the room rate and the rate for related services so that they equal the fees charged by the Schneider Regional Medical Center on St. Thomas. They also directed Nelson and his staff to examine alternate forms of management and fiscal structures for the hospital.

"We have to look alternatives to see how we can increase our revenues," said board member Deepak Bansal.

There was plenty of positive news during the course of the meeting, including the purchase of a mammography machine. A mammogram program will begin in about six weeks.

The hospital is also making progress under its agreement with the Centers for Medicare and Medicaid, known as CMS, the agency that certifies U.S. medical facilities for meeting required standards of care. Following a CMS inspection last summer, the Juan F. Luis Hospital was found deficient in 11 of 23 categories and faced the possibility of losing the right to charge the federal health programs for services. After entering into an improvement agreement with CMS in December, the board was told Wednesday that the agency is pleased with the results so far.

According to Justa Encarnacion, a nurse who heads up the CMS committee, the agency "is amazed" by the hospital's response, both in terms of how quickly they have responded and how positively. "We're not perfect," she said, "but we're moving forward."

The board heard a report from Peter Abrahams, director of facility operations, that the hospital's solar electricity program is coming on line and showing results. The system, which was paid for through a Department of Energy Grant, generates 24,000 watts of power on a sunny day, and is even able to manage more than 3,000 watts when the sky is cloudy. That's electricity the hospital doesn't have to buy from the Water and Power Authority.

But given that the hospital's electric bill runs between $350,000 and $400,000 a month, it isn't always easy to see the direct cost reduction.

Abrahams also reported that reconstruction of the surgical wings is under way, as is the air conditioning project for the emergency room.

But Abrahams had more somber news about another project, the generators installed by the Stone House Group to cut the power bill from WAPA.

The generators work fine, but haven't been used in months because the hospital doesn't have the money on hand to pay the contract. Nelson said typically that would be a simple decision to make – the contract saves the hospital money so pay that bill. But it's not nearly that easy, not when the hospital owes $28 million to a host of suppliers and creditors.

For all the good news, there was plenty of the other kind as well.

Two reductions in funds from the territorial government, one in December and one in January, have created a $1.8 million hole in the budget, Nelson reported. Further, the closure of the Hovensa refinery will have a serious impact on the hospital's budget just as it will on everything else on St. Croix.

According to Nelson, the hospital will lose between 300 and 400 patient procedures from the refinery's employees, plus an estimated 15 percent reduction in outpatient services. That will translate to an additional $3.5 million loss in anticipated revenues.