Senators grill hospital officials

ST. THOMAS - The territory's hospital officials were in the hot seat Tuesday, providing the Senate Health and Hospitals Committee with financial updates on the territory's public health care facilities.

The leadership of both hospitals told senators that the recent forgiveness of about $80 million in debt to the central government for years of processing payroll will help their balance sheets, but the institutions still are struggling with cash flow problems.

Luis Hospital

"While we are grateful and humble for the debt relief, we acknowledge the concern the relief may cause the government as a whole," Luis Hospital Chief Executive Officer Jeff Nelson said.

Nelson said without the "extraordinary debt relief" in December - about $52.3 million was forgiven - Luis Hospital would have posted an operating loss for December 2011 compared to December 2010.

The operating loss is because of increasing bad debt, decreasing appropriations from the government, and increasing costs to come into compliance with Centers for Medicare and Medicaid Services requirements.

HOVENSA's closure next month will negatively impact the hospital's revenues as well, Nelson said.

He estimates 300 to 600 fewer admissions per year and expects outpatient visits to decline about 15 percent.

"The total impact to JFL of this economic change exceeds $3.5 million annually to JFL in net patient revenues," Nelson said.

To compensate for the new challenges facing the hospital, Luis Hospital needs to shift its focus, Nelson said. Improving outpatient and ambulatory surgery services, opening walk-in clinics, reducing the dependency on inpatient revenues, and learning how to operate with less from the V.I. government will help but may result in losing 100 full-time jobs, he said.

"This will mean a change in JFL's work force including the numbers of JFL team members employed and the composition of the team members," Nelson said.

Luis Hospital still owes more than $28 million to creditors, including $6 million to the V.I. Water and Power Authority. He acknowledged the $1.5 million that the Senate recently identified as a partial payment to WAPA.

Schneider Hospital

Although the Senate forgave between $27 million and $28 million of Schneider's debt, the hospital's interim CEO Angela Rennalls-Atkinson said the continued cuts to the hospital's General Fund appropriations is impairing the hospital. She said the hospital already was unhappy when the Senate approved a Fiscal Year 2012 budget appropriation of $22.5 million because it was $2.5 million less than was requested by the governor.

In December, the Executive Branch notified the hospital that the budget was further reduced by $641,430 - which resulted in cutting 11 positions. Rennalls-Atkinson said some were funded vacant positions, but at least four employees had to be terminated.

Last week, the hospital received notice that their budget is being cut again - this time by another $732,153 - bringing the total annual budget allotment to about $21.1 million.

Reductions in staffing levels will force the hospital to hire contractors - which cost triple what a permanent employee does - to continue the hospital's services, Rennalls-Atkinson said.

"This and any further reduction in allotments will definitely impair SRMC's ability to maintain its current level and full scope of services," she said.

- Contact reporter Aldeth Lewin at 714-9111 or email alewin@dailynews.vi.ST. THOMAS - Senators were upset Tuesday to learn that the hospitals were asked to use a form letter to dismiss employees that blames the 29th Legislature for the terminations.

Schneider Hospital Chief Executive Officer Angela Rennalls-Atkinson said in December she was notified by the executive branch that the hospital's $22.5 million General Fund operating budget - which primarily is used to pay employees - was being cut by $641,430. The cut resulted in removing 11 positions - seven of which already were vacant.

The letter the remaining four employees received was similar to the letter hundreds of government employees got.

The letter says: "Given the failure of the 29th Legislature to act on those proposals which might have made this action unnecessary at this time, and with considerable regret, I write to inform you that you will be dismissed from your position effective Friday, Jan. 20, 2012."

Marlene Adams, director of Human Resources, told senators that Personnel Director Kenneth Hermon Jr. gave her a sample dismissal letter, a script for dismissing the employees and employee benefits guides.

When Adams gave the letters to Rennalls-Atkinson to sign, Rennalls-Atkinson did not like the language and asked if it could be changed. Adams checked with the Division of Personnel.

"I was told, no, that was the way it should be written because they wanted consistency with all the other employees in the government that was receiving this same thing," Adams said.

Sen. Usie Richards said he was "offended" by the letter, especially because he - among others - overrode the governor's veto to forgive $90 million in the hospitals' debt to the central government.

Neither Hermon nor Government House spokesman Jean Greaux Jr. returned calls to The Daily News about the letter.

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