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Tuesday, April 16, 2024
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JFL Board Wants Reorganization Options

The Juan F. Luis Hospital recorded a positive cash flow for the second month in a row in April, but the hospital’s board Wednesday voted to pursue a reorganization that might bring a much-needed infusion of cash.

A community forum to be held at the hospital June 14 will be part of that process, which also will include discussions with physician groups, senators and others.

The hospital board was told at a meeting Wednesday, that in April the hospital’s cash flow was about $120,000, the second month in a row it was in the black. That was the first time in six years that the board has shown a positive cash flow two months in a row.

But while that was a positive sign that the hospital is moving in the right direction, Chief Executive Officer Jeff Nelson said the amount was dwarfed by the $31 million the hospital still owes to businesses that provide it goods and services.

Some of those creditors are beginning to give up hope of ever getting paid and will soon put the hospital on a credit hold, denying JFL the necessities to operate. If that happens, patient care will suffer, Nelson warned.

“We need an injection of capital. We need an injection of capital now,” Nelson said. “The hospital is jeopardy if we do not find an injection of capital now.”

“We have to look at all our options if we want to make sure we have a hospital,” Nelson said after the meeting. “It’s like a credit card that you’ve used until it’s maxed out. Now maybe you’re starting to make a little money, but you owe so much that, at that rate, it’ll take you 30 years to pay it off.”

The board has repeatedly expressed the preference that the territorial government be the source of that capital infusion, but with its own revenue problems, the government is in no position to do more than it already has.

“They’ve done what they could and we’re most grateful for it,” Nelson said, noting the recent Senate action to forgive $50 million in debt owed by the hospital to the government. “It wasn’t cash. It didn’t help us on the balance sheet, but we do appreciate it.”

The board voted to have the hospital’s management team report back in two weeks with options.

Everything is on the table, board members said, except for three critical values the community has made clear it expects – that the hospital remain government owned, open to all, and a not-for-profit organization.

A variety of factors has contributed to the hospital’s improved bottom line, include slashing the cost of base supplies by $300,000. But it’s not enough to make a dent in the debt, and the situation is becoming critical.

“Waiting for some future hope and desire is a waiting game we can no longer play,” Nelson said.

Kye Walker, hospital board chair, added the caveat that included in the options is a discussion of whether the proposals are already allowable under the Virgin Islands Code. If not, valuable time could be lost wrangling with lawmakers.

The community forum will be held at 5:30 p.m. June 14 at the V.I. Cardiac Center’s conference room.

Walker also brought up another possible reorganization later in the meeting, sounding out fellow board members on whether they would be open to supporting a proposal to merging the management of the territory’s two hospitals.

Under the current organization, the two hospitals have their own boards, CEO’s and management teams and report to the Territorial Board. Walker suggested that it would be more efficient if the healthcare institutions were organized more like the University of the Virgin Islands or WAPA, which have a single board and management and facilities on all three islands.

“It would be essentially one hospital with one board and one management, but separate structures,” she said. “It’s not clear why there are two hospital boards and one territorial board that doesn’t meet very often.”

Walker pointed out that there’s no current, active proposal to consolidate the management of the two hospitals, but thought if the board went on record supporting such a proposal it might get the ball rolling.

While board members expressed support for the general idea, they decided to withhold supporting it until they had a more concrete proposal to look at. Of concern to board members was the question of equity, and whether St. Croix’s healthcare needs would take a backseat to those of St. Thomas.

The board instead voted to have the hospital’s management report back on the question of merging the management of the territory’s two hospitals.

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