The Gov. Juan F. Luis Hospital asked the V.I. Senate for $10.3 million for its improvement plan, but senators, while expressing support, criticized officials for a round of raises last year when the facility was on the brink of failure.
Meeting Tuesday in the Frits E. Lawaetz Legislative Conference Room on St. Croix, the Senate’s Committee on Health Hospitals and Veteran Affairs received updates on the statuses of both JFL and the Schneider Regional Medical Center.
During the morning’s session Dr. Bernard Wheatley, Schneider’s chief executive officer, told the committee the medical center passed an unannounced survey by the Joint Commission.
The Joint Commission surveyors visited St. Thomas from Feb. 18 through 20, evaluating the hospital for compliance with standards of patient care, including infection prevention and control, leadership, medication management, life safety and the environment of care.
The Joint Commission is an independent, not-for-profit organization that accredits and certifies more than 19,000 health care organizations and programs in the United States. Joint Commission accreditation and certification is recognized nationwide as a symbol of quality.
“It was an excellent survey, one of the best I’ve seen in my career," Wheatley said. "We’re also proud to report that our facility continues to meet CMS standards."
In presenting to senators Schneider Regional Medical Center’s official testimony, Wheatley said he hoped the hospital’s newly approved five-year plan will make it "the USVI health system of choice."
Wheatley said the plan contains strategies that include delivering comprehensive, high quality care, establishing and sustaining financial excellence and developing highly qualified and motivated staff.
"The district governing board has approved this new strategic plan and the entire SRMC team has already begun working toward meeting targets and producing deliverables to achieve these strategies," Wheatley said.
But even with the news of the Joint Commission survey and reports of other projects under way at the hospital, Schneider faces economic challenges, officials reported.
For Fiscal Year 2014, Schneider Regional was appropriated $22.5 million to cover the cost of its payroll expenses. This amount only covered approximately 49 percent of the medical center’s overall payroll costs of $45.8 million, according to Wheatley.
While that was an increase from the 2013 appropriation of $21 million, it still represents a 29 percent decrease from the $31.5 million the hospital received in 2008.
"Unfortunately, the recommended appropriation is insufficient to meet the mandate of operating the only acute care hospital in the St. Thomas/St. John district, the Cancer Institute, and an urgent care clinic on St. John that operates on a 24-hour basis," Wheatley said. "This current level of funding makes it difficult for the organization to render the full scope of services expected by the community and visitors."
For FY14, Schneider Regional’s operating expenses totaled $112.1 million, but its net patient service and other revenues totaled $71,744,699, resulting in a deficit of $40,361,432 before appropriations.
Based on unaudited financial statements for FY14, the hospital loss exceeded $17.8 million.
"Without specific initiatives to enhance revenue and curtail spending, this severe deficit will continue and exacerbate SRMC’s financial challenges," Wheatley warned.
He added that the Myrah Keating Smith Community Health Center on St. John lost $2.1 million in FY14.
"MKS cannot continue to provide services at its current levels without additional financial support and resources. If funding is not provided, MKS must take measures to curtail services in order to reduce its operating expenses," he said.
But if Schneider Regional is facing challenges, the Gov. Juan Luis Memorial Hospital on St. Croix is trying to scratch and claw its way back from a fiscal abyss.
In the JFL hospital’s CEO’s prepared testimony to the committee, Dr. Kendall Griffith outlined the difficulties still facing the hospital and steps being planned to meet them.
In September the Centers for Medicare and Medicaid, the agency that certifies hospitals for participation in those federal programs, said it was about to revoke JFL’s certification. The agency’s report cited a litany of violations of its standards, including some that resulted in injury to patients.
If the hospital was not able to charge Medicare and Medicaid for treatment of qualifying patients, it would have lost a major revenue stream and its future would have been bleak.
After two weeks of negotiations that involved the hospital, Government House and then Delegate to Congress Donna Christensen, CMS gave the hospital a nine-month extension under a Systems Improvement Plan.
Griffith presented a $10.3 million plan for the hospital’s improvement, which officials from Government House and the Legislature supported. That commitment was part of what CMS needed to hear to agree to the extension, showing that the community would support the hospital’s efforts.
In the following months much groundwork has been laid, the CEO said. The management team has been assembled and the finance system has been rebuilt.
Despite a decline in patient numbers, which Griffith attributed to the worry about the hospital’s survival, cash collection has almost doubled, he said.
But members of the committee were struggling with the news that in the last fiscal year the hospital has granted raises to some employees, including retroactive raises, while it was struggling to survive.
Griffith defended the raises, saying JFL can’t afford to lose some of its top management.
As an example, he cited Chief Nursing Officer Justa Encarnacion, who received a $45,000 raise, from $85,000 a year to $130,000, an increase of 53 percent. With the increase made effective in February 2013, she also got a retroactive payment of $53,199.
Griffith said in hospitals around the country, the median annual salary for a chief nursing officer is $230,000.
"Day and night, weekends, holidays, she’s on the floors, when there’s not a nurse, she’s helping out," he said.
Not everyone got raises, he added.
"We are creating a culture of accountability. Just because you’ve been in a position for a long time doesn’t mean you’re going to get a raise," he said. The raises went to employees "who have exemplified a work ethic that is contributing to the betterment of JFL and its patients."
Griffith said when news of the CMS action hit, morale took a tumble and there were there were "significant threats" of employees planning to leave.
"Some people left and they were some big hits," he added, which is what prompted the action.
Sen. Kurt Vialet, the chairman of the committee, took exception, saying it’s one thing to reward hard work, but another when you begin to create morale problems.
But the real problem, he said, is the lump payments for retroactive raises. "The part that I don’t agree with is the retroactivity," he said. "You should have really held off on it because of the financial situation of the hospital.”
He later argued, “You’re trying to justify two different scenarios. One is the pay raise, which is a lot easier to justify. The harder to justify is the retroactivity."
Vialet suggested it would have been wiser to tell employees that if the hospital’s condition stabilized, "perhaps three four years down the line, we’ll give that to you."