The Juan F. Luis Hospital just barely missed having its first break even month in seven years, while at the same time seeing a steady improvement in patient safety, but the board of directors Wednesday took action to keep the numbers moving in that direction.
At its Wednesday meeting, the board authorized CEO Jeff Nelson to seek an attorney general’s opinion on the legality of a process that could provide the financially beleaguered hospital a chance to borrow some of the capital it needs.
The financial committee reported that the March financial statement showed earnings before interest, depreciation and amortization, a column accountants call EBIDA, had increased almost 400 percent this March from March 2011, from $58,696 a year ago to $286,373 this March. After depreciation, it left a loss in net income of $6,483 – a loss, but a vast improvement over March 2011, which had a net earnings loss of $229,103.
Board member Wallace Phaire commented it was the closest he’d seen to breaking even in seven years.
Nelson said the hospital’s overall financial picture is weak, owing more than $30 million to vendors that it cannot pay. Since taking the helm of the hospital in February 2011, Nelson has said the hospital has to find an infusion of capital.
Wednesday night he outlined one such proposal that, if cleared by the attorney general, could provide that.
Just as JFL owes vendors millions, it is also owed more than $10 million, he explained, and those accounts receivable have not been collected. Those doubtful accounts are listed on the books as an asset.
If the attorney general approves, the hospital could create a separate private, not for profit corporation and assign those uncollected and uncollectable debts – which are assets as far as accountants are concerned – to that new entity. The entity could then use them as collateral to borrow for some of the capital it needs.
Also at the meeting, Interim Chief Nursing Officer Terry Lynch told the board that the nursing staff continued to improve.
In February the hospital terminated 85 licensed vocational nurses and certified nurses aides, aiming to become an RN-centered facility. The hospital has 159 registered nurses, and all but 31 “traveling nurses” are locals. The hospital’s budget for the 2012-13 fiscal year calls for the traveling nurses to be reduced by 75 percent by the end of September, and 90 percent by the end of December.
Lynch’s report showed that from March to April, the incidents of patient falls and medication errors continued to decline, and other critical safety indicators also fell or stayed the same. And the transition was accomplished without an increase in overtime hours or pay, Nelson added.
There were two instances in March when the ratio of nurses to patients fell outside the limits, but for the rest of the time, nurses rotated from section to section in response to changing patient loads throughout the day.
While that’s a good sign, Nelson added, he also said the goal has to remain zero patient safety issues. Nine patient falls in April is an improvement over March’s 11, but that’s still nine too many, he said.
“All of these should be zero,” he said. “The object is to have zero defects.”
In other action, the board:
– Heard from Peter Abrahams, the director of Cornerstone Services, which encompasses the physical plant, who said aggressive energy management has been paying off. From January 2011 to March 2012, the hospital has saved $869,000 in water, power and propane costs, over the same figures for January 2008 to March 2009, the benchmark year;
– Heard from Nelson that the hospital’s long awaited Women’s Center will be completed by early June and should be ready to provide service, including mammograms, shortly after;
– Heard from Dr. Robert Centeno that the Healthy Access initiative he is spearheading is likely to be ready for implementation with the beginning of the new fiscal year in October. The plan, which is followed in 40 states around the country, harnesses the volunteer work of doctors and other health care professionals. There are still details to be worked out, and both the central government and the Legislature would have to sign off on aspects of the plan. But the board members were enthusiastic about a program with the potential to provide better service for less money than it is costing now.