Ten months after substantially increasing nurse salaries, Gov. Juan F. Luis Hospital has no more traveling nurses, which is saving the hospital much more money than the pay raises cost, Chief Financial Officer Deepak Bansal told the Territorial Hospital Board on Thursday.
Luis Hospital has been in financial distress for years, with government appropriations – never enough to cover uncompensated care to begin with – declining from $26.4 million in Fiscal Year 2008 to $19.3 million in the current fiscal year. Its financial woes remain severe and the hospital is struggling to make payroll and meet Centers for Medicare and Medicaid Services mandates, JFL Chief Executive Officer Kendall Griffith emphasized.
Luis Hospital and Schneider Regional Medical Center each absorb $25 to $35 million in uncompensated, unpaid care each year and face similar budget woes, although the situation at JFL is currently more severe. Financial conditions are worsening at the St. Croix hospital and it is again behind in its utility bills, Government Employee Retirement System contributions and payments to some vendors.
But for many years, the hospital has been trying to reduce its reliance on extremely expensive contract traveling nurses, while also struggling financially, and that effort has borne fruit. (See related links below)
In January, when Luis Hospital raised the pay, it had 173 nurses, of which 40 were contract traveling nurses, where a substantial part of their compensation goes to the contracting agency. Then-CEO Jeff Nelson pushed through the pay raises over concerns that it could create animosity between new and more senior nurses.
Nelson projected potential savings of roughly $1 million per year from eliminating traveling nurses.
The raises were negotiated in 2012 for JFL, Schneider Hospital and the Health Department, but JFL was the first to implement the raises, which ranged from 31.3 to 39.3 percent over RN’s then-current wages, depending on years of experience.
Presently the number of traveling nurses has decreased to zero, thanks to more nurses applying to work, Bansal said.
There are six nurses who have fees paid to the agencies that found them for the hospital, but the fee of about $10 per hour is much smaller than the contract nurse fee and they are regular employees of the hospital, Bansal said.
"We got some flack, Nelson and I, for raising the pay, but we are saving money," Bansal said.
Doing a rough calculation, based on the difference in pay and the number of employees affected, he estimated that eliminating traveling nurses was currently saving the hospital about $1.25 million per year, even after accounting for the pay raises.
The JFL governing board has had too few members to make a quorum since July, said Board Chairman Anthony Ricketts. "We need assistance to get new nominees," Ricketts said.
Griffith also emphasized the need for new members, saying the lack of a quorum threatened the hospital’s ability to meet CMS mandates. Griffith asked Territorial Hospital Board Chairwoman Lynn Millin Maduro if the territorial board could potentially appoint two of its members to sit on the St. Croix board, so it could make quorum.
The law does not give the Territorial Hospital Board that authority, Maduro said.
Taetia Phillips-Dorsett, health policy advisor to the governor, said Gov. John deJongh Jr. has one name confirmed that would be coming to the Legislature for approval in the next few weeks, and that the governor is talking with another person who will hopefully become a nominee too.
Meanwhile, without a functioning St. Croix board, the hospital must come to the territorial board to make purchases larger than $250,000, to credential its employees and to make policy changes.
Thursday the board renewed credentials for five physicians and one physician assistant, and issued new credentials to one physician. Another territorial board meeting was scheduled for Nov. 8 at 1 p.m. to approve several contracts and six separate new policy and procedure manuals for various divisions within the hospital.
While much of the attention was focused on Luis Hospital, Schneider executives reported the St. Thomas hospital is facing many of the same financial woes.
Schneider also has trouble making payroll and lacks the money to meet CMS mandates, said CEO Bernard Wheatley.
CMS has mandated Schneider Hospital implement a data entry system for dialysis care, but the medical center "presently lacks the resources to build and maintain the requisite dialysis modules in the electronic medical records system in order to comply with the CMS mandated deadline of January 1," Wheatley said.
On the bright side, Schneider has resolved issues with the Department of Planning and Natural Resources over storage of medical waste, he said.
On Oct. 1, DPNR issued Schneider Hospital a notice of noncompliance for its medical waste storage and disposal process. (See related links below)
On Oct. 30, DPNR informed Schneider it is "now in full compliance with DPNR permit requirements," Wheatley said.
The territorial board voted to approve a $2 million revolving line of credit with First Bank for Schneider Hospital, specifically to help it meet payroll. Terms of the line of credit require it to be paid off within 30 days and interest set at 5 percent.
Voting to approve the line of credit were Maduro, Ricketts, Maria Tankenson–Hodge, Cornel Williams, Debra Gottlieb, Angel Dawson, Wilbur Callendar and Joyce Heyliger. Aldria Harley-Wade and Gretta Hart-Hyndman were absent at the time of the vote.
