The board of directors for the Juan F. Luis Medical Center voted to institute a hiring and wage freeze due to the hospital’s ongoing financial troubles at a meeting Wednesday night.
The board also voted to institute the hospital’s “contingency plan,” a strategy meant to trim costs mainly through eliminating contracts with third-party service providers. The plan may also call for layoffs.
The board ordered Chief Operating Officer Kendall Griffith to present a plan by April 5 detailing how the contingency plan would be implemented and what steps need to be taken for the hospital to realize significant savings.
Board members said, however, that they intend to continue hiring registered nurses. They said that the hiring of RNs would be exempt from the hiring freeze provided that each new permanent hire was accompanied by the elimination of a travel nurse position.
The motions followed a grim financial report that indicated the hospital was continuing to experience a negative monthly cash flow.
“I had hoped that we could say that for the period being reviewed, the EBITDA (earnings before interest, taxes, depreciation, and amortization) was now back to being positive. It is not so. It continues a downward trend,” said board member Joyce Heyliger.
She went on to say that for February, the hospital had $160,486 in unrestricted cash on hand. This is down sharply from the February 2012 figure of $405,269.
She reported that as the hospital’s cash flow decreases, its debts continue to mount. In February 2012 JFL owed approximately $36 million. In February 2013, the debt figure sat at just under $43 million.
In Griffith’s prepared report, which was read into the record, he confirmed that the hospital was having trouble paying its vendors for supplies.
The board also announced the hospital was running well above its projected fiscal year 2013 budget of approximately $67 million. The hospitals expenses are now figured at more than $80 million.
Asked after the meeting whether the $80 million figure represented year-to-date expenses or was a projection of what the hospital would likely spend over the course of the remainder of the fiscal year, Chairwoman Kye Walker replied that it was her understanding that the hospital had already spent $80 million this year.
The fiscal year ends September 30.
The board also voted to approve a proposed budget of $67 million for fiscal year 2014 and forwarded the budget to the Office of Management and Budgets.
Walker said the board had instructed the hospital’s executive committee to review the budget and offer feedback before the board meeting that evening, but those orders were not followed.
“The board was stood up at 5 p.m. today. We received no feedback from the exec team. At this point, the board is ready to act,” she said.
The budget is essentially a carbon copy of the 2013 budget, with three major changes. The appropriation for travel nurses was reduced to $2 million, salaries were changed to reflect the end of the 8-percent wage cut, and the wages of registered nurses was adjusted to reflect their recent raises.
In other business, the board heard reports from staff members on initiatives being pursued to increase the hospital’s quality of care.
The committee on nursing and quality reported that it was studying ways to streamline the charting process to reduce the amount of paperwork faced by nurses.
The committee on talent resources announced it was overhauling the employee orientation process so new hires would learn from senior employees rather than just watch videos.
The committee on facility reported that work on the hospital’s new women’s health center was progressing, but the last of the renovations would not be completed until the end of April.
Several initiatives mandated by the Centers for Medicare and Medicaid Services were also discussed, including an audit of all personnel files to ensure no paperwork is missing, and a workshop to train the hospital’s security staff in non-violent takedown maneuvers.
