Hospitals Report Both Progress and ‘Mountain of Debt’

From left, JFL CEO Dyma Williams, Schneider Chief Medical Officer Luis Amaro, and Schneider VP of Facilities Darryl Smalls testify at Monday's hearing.
From left, JFL CEO Dyma Williams, Schneider Chief Medical Officer Luis Amaro, and Schneider VP of Facilities Darryl Smalls testify at Monday’s hearing.

Executives of St. Croix’s Juan F. Luis Hospital and St. Thomas’ Schneider Regional Medical Center told a panel of Senators Monday of varying degrees of progress, while also outlining what JFL Chief Executive Officer Dyma Williams called a “mountain of debt” to the Government Employees Retirement System, the Virgin islands Water and Power Authority and unpaid vendors.

The Senate Committee on Health and Human Services called the leadership of various health-related agencies and semi-autonomous agencies on Monday to get an update on their status. According to Williams, in the case of Juan Luis, the hospital’s payables decreased over the past year, from $66 million to $55 million, progress she attributed to proper financial planning and some $42 million in federal Community Disaster Loans.

“The original deadline for the use of all funds was Dec. 31, 2018,” said Williams. “However, through negotiations with FEMA and the US Treasury, an extension of the loan was granted to extend the life of the loan to March 31, 2019.”

JFL also paid more than $3 million to GERS in past due payments for employer and employee contributions, Williams said, and plans to process $1.9 million to cover the remaining balance.

The hospital’s debts to WAPA, however, might take some time to make current. JFL Chief Financial Officer Shenel Moorhead said some $266,000 is immediately taken out of the hospital’s federal reimbursements: as much as $210,000 pays for the hospital’s regular water and power bill, while the extra $50,000 goes toward paying past due amounts. With some $12 million in WAPA debt, however, the hospital’s rate of payoff would depend on JFL’s financial solvency, said Moorhead.

Williams also reported that its modular dialysis trailers began accepting patients in December. Four modular operating rooms are slated to be ready within the month, she said, which adds to JFL’s projected revenue. With the modular hospitals scheduled to open in five months, the hospital’s bed capacity is also expected to go up from 46 to 80 by summer’s end.

“The operating rooms represent a significant revenue generating center for any healthcare organization, and JFL will have significant revenue improvement when the ORs are returned to full function from one OR to four,” Williams said.

Schneider Regional Medical Center has challenges of its own, said Schneider Chief Medical Officer Luis Amaro, reporting a projected operating loss of $4.4 million for Fiscal Year 2019, and that is after the hospital receives its government allotment of $21.7 million and some $5 million in Medicaid reimbursements due to the 100 percent federal match. The loss is projected to worsen from the implementation of negotiated salary increases of in the amount of $2.8 million and the cost to enroll 283 hospital employees in GERS – some $2.7 million that would have been alleviated by $2.2 million in appropriated but unreleased funds.

After the 2017 storms, Schneider’s revenues dropped approximately 37 percent, somewhat offset by reduced costs of 22 percent, access to $28 million in Community Disaster Loans and the increased Medicaid match. The CDL money, however, will no longer be accessible beyond March 31, and the 100 percent Medicaid match will expire Sept. 30. When that happens, both Schneider and Juan Luis will revert back to a 55 percent federal match and the local government would have to bear the remaining 45 percent.

Amaro, however, praised his team for pushing revenues up and driving costs down.

“The leaders and team members of SRMC have worked hard over the past few years to improve operating revenues by 12 percent and reduce costs by 13 percent and each and every member of this organization should be commended,” he said.

Schneider officials also reported the re-opening of its heart and lung services and hemodialysis. The Charlotte Kimmelman Cancer Institute remains offline, however, due to lack of funding for repairs. The Myrah Keating Smith Community Health Center facilities on St. John remain inoperable, and general outpatient services have been relocated to the DeCastro Clinic.

Staffing Challenges
Staffing shortage is a common challenge at both hospitals, especially in the area of nursing, but according to Schneider officials, the hospital is making big strides in hiring needed clinical staff in spite of the challenge of attracting personnel to an institution in the process of rebuilding or a community where the school situation might be uncertain for their children.

Chief Nursing Officer Darice Plaskett said they are making progress in hiring critically needed nurses. In 2018, the hospital instituted a $12,000 increase in registered nurses’ pay, bringing their annual salaries up to par with their mainland counterparts. In December, Schneider Hospital also held a job fair and and launched national ads.

But according to Plaskett, the hiring effort that yielded the most fruit was the hospital’s NCLEX Review Program, which helps aspiring nurses from the University of the Virgin Islands or the general community pass their national nursing licensure exam.

“That program’s proven to be very successful,” she said. According to Plaskett, from the time the program started, the hospital has had more than 20 students take part in the program and pass the NCLEX.

JFL also acknowledged the need to expand its staffing and services, bracing itself for the estimated 1,200 employees and families of the newly reopened Limetree Bay Terminals.

Consolidating the Hospital Boards
Testifiers also expressed doubts about consolidating the two district governing boards into a unified territorial board. There are key differences between the two hospital, said Amaro, and the distance and transportation challenges between the two districts might pose logistical issues in the future.

“When you talk about mergers, there has to be huge studies done that talk about how do these hospitals complement each other financially,” Amaro said. “Usually, you look at a merger in the United States, you have one very successful hospital taking over another struggling hospital. Two struggling debt structures, I have not seen that in a merger in any capacity.”

Williams expressed concerns about what the consolidation might mean for the hospitals’ accreditation. CMS recently cited JFL for not having a district governing board onsite to manage quality care initiatives and physician peer review process. A territorial board might affect accreditation and their federal reimbursements, she said.

“Certainly there is opportunity for us to consolidate and collaborate, such as joint purchasing initiatives between the two hospitals, but for that endeavor to be even initiated, we need a territory plan … until we can interconnect and really look at the innovations that needed to execute, it’s not going to work,” Williams said.