One word summed up the main theme to emerge Wednesday from the Juan F. Luis Hospital Board of Directors meeting.
As a matter of fact, Chief Financial Officer Deepak Bansal said the word three times consecutively kicking off his financial report, noting it’s what the financially strapped hospital needs more than anything.
“Capital, capital, capital,” Bansal said. “We are in dire need of capital.”
On a positive note, Bansal reported that for the sixth straight month, Luis Hospital had a positive cash flow or EBITDA (earnings before interest, taxes, depreciation and amortization) of $293,957 for the month of August.
For Fiscal Year 2012, however, he said the hospital’s EBITDA was negative $5,728,000. But Bansal pointed out that through the same amount of time in FY11, the hospital’s EBITDA was negative $9,945,000.
“There has been a positive change of four million-plus dollars and that’s a significant number,” he said. “But it’s obviously not enough to take us out of the woods.”
Bansal also said gross revenues for FY12 and the month of August were both significantly higher in comparison to the previous year. Bansal reported a 52 percent increase for the month compared to the previous August and a 40.1 percent increase for the year compared to the same amount of time in 2011.
But Bansal added that the hospital only had enough cash-on-hand to operate its accounts with for about two days. He said AAA-rated hospitals usually have enough cash on hand for 100 days.
At least 40 days of cash on hand is needed to “be healthy,” he said. “Ours is 1.94.”
Board member Joyce Heyliger asked Bansal to translate what that number meant when it came to the quality of care a patient might receive.
“If there are some critical medicines or pharmaceuticals or critical supplies that we need,” he said. “Quite a few of our vendors have us on credit hold.” Bansal said the hospital is having to go out and purchase these medicines with cash “and it poses a huge difficulty just juggling it.”
“To deliver quality patient care, we absolutely need capital, capital, capital. We’re trying very hard to increase our revenues,” he said.
To that end, Bansal and the finance committee proposed adding a $2,000 set-up fee to all surgeries that take place in Luis Hospital’s operating room.
“We don’t have such a set-up fee as is the case in many hospitals in the United States,” he said. “If it’s not a set-up fee then they have the first minutes of the use of the operating room at a much higher rate than the second hour, for example, to make sure you cover your basic costs, to make sure you cover your overhead. We simply have left that money on the table.”
He said, based on the 2,521 procedures performed in Luis Hospital’s operating room in FY11, the one change would account for an additional $5 million in gross revenue.
Board member Imelda Dizon said the additional $5 million in revenue didn’t reflect reality.
“You’re assuming that with each procedure we can collect the money, when we all know that maybe half of the patients we see don’t have insurance,” Dizon said.
“Just because we can’t collect it doesn’t mean we shouldn’t bill for it,” Bansal added.
Dizon countered the proposal and suggested the fee only be $1,000.
“I know we need capital but we have to be sensitive also for people in the community,” she said.
The board ended up going with Bansal’s $2,000 recommendation.
“At the end of the day, this is collecting from insurance companies,” he said.
In an attempt to give some relief to the uninsured and self-paying patient, the board did provide relief in a separate measure it passed. Simply put, when a self-pay patient paid 60 percent of their gross bill, they’d immediately have 40 percent deducted.
“We’re giving them a discount when the money is collected,” Bansal said. “This will essentially put them on par with the insurance companies.”
“This shows the willingness of the Board to care for the little person who doesn’t have insurance,” Bansal said.
In other business, pediatrician Dr. Anthony Ricketts participated as the board’s newest member, serving as its new physician representative.