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Schneider CEO: Government Owes the Hospitals, Too

June 11, 2004 – Roy L. Schneider Hospital chief operating officer Rodney E. Miller Sr. met the government's Friday deadline to make overdue Health Revolving Fund payments head on. He met Friday morning with Lt. Gov. Vargrave Richards in his capacity as acting governor, and he called an emergency meeting of the hospital board for about 4 p.m.
At the meeting with Richards, Miller said, he pointed out that while the hospital owes the government money, the government owes the hospital, as well. Finance Commissioner Bernice Turnbull and Juel Molloy, the governor's chief of staff, attended the meeting via a conference telephone call hookup, he said.
It was the Finance commissioner who gave the hospital and Juan F. Luis Hospital on St. Croix the deadline of Friday by which to meet their financial obligations. If the money owed was not paid, she said, the hospital would be cut off from the government's system to meet payrolls. (See "Hospitals Facing Friday Deadline to Repay Millions".)
"The lieutenant governor asked the commissioner to go back and look at some type of middle ground on this issue," Miller said. "It is still very much a work in progress. It is still a very serious situation we are faced with. We will meet with the board around 4 p.m. today.
"We made an arrangement to pay the government based on our ability to do so, and in return, we would hope they would take the responsibilities for the liabilities due the hospital, and that hasn't happened at all. We cannot let it go on any longer."
Miller added that he is "appreciative of the lieutenant governor's efforts in trying to assist in this critical matter."
Miller said: "They say we owe $2.6 million for fiscal year 2003 and $1.9 million for FY2004. We paid them $2.5 million in FY2003 and $1.2 million in FY 2004."
Earlier, Miller had said that if Bernice Turnbull "is serious about this threat, we are prepared to close the hospital and transfer patients to Puerto Rico or the States. It would be the worst health-care crisis in Virgin Island history."
As of May, according to Finance Department documents, Schneider Hospital owed the government $10.7 million. However, Miller said he does not see that as a possibility. "I am very optimistic," he said. "I know we can do something about it. Health has to be the top priority. Without health, you cannot do anything."
He said the hospital payroll was met on Thursday.
"Let's talk about what the government owes the hospital," Miller said. "There are a significant number of government agencies — including the East End Health Clinic and the Justice Department, for the morgue — that owe the hospital about $6.1 million, and that is excluding the $14.3 million a year we provide in uncompensated care. That's not even factored into the equation."
Miller said he has tried to arrange a meeting with Turnbull, but the earliest time they can both arrange it is June 30. "I asked her if we could meet in the evening. We have a working board, and that makes sense, but she couldn't accommodate that," he said.
Miller said he was disappointed at the means Turnbull used to inform him of the impending financial crisis: a letter, which was reported Wednesday in the Source and on broadcast media.
"It was disheartening and disrespectful," Miller said. "I would never write anyone a letter like that. There's no problem with picking up the phone and scheduling a meeting. We acknowledge we owe the government, but the government doesn't acknowledge what it owes us."
Miller pointed out that the hospital has gained reaccreditation with no financial help from the government. It cost $2 million, her said.
"Semi-autonomy is the best thing that ever happened to this hospital," he said. "We would still be stuck back in time and would not be able to provide basic health care, pillow cases, toiletries, those things that have become normal now. We have a hospital we can be proud of. It is better than most community hospitals on the mainland in the medical and clinical leadership, as well as the infrastructure. Do you want a hospital or a clinic?"
Miller said that by industry standards, the hospital has "made a 180-degree turn since I came on board, and it was well on its way before I came."
In December, after waiting more than four decades, Schneider Hospital and the Myrah Keating Smith Community Health Center on St. John won approval by the Joint Commission on Accreditation of Healthcare Organizations. (See the St. Thomas Source report "Local Health-Care Units Cheer Accreditation".)
Miller said when semi-autonomy was first granted, "there was a $2.9 million obligation that the government owed for vendors prior to that. Eugene Woods [Miller's predecessor as chief executive officer] sent the information to Juel Molloy and to the governor, and we never received a dime.
"We constantly live with unfunded liabilities. Raises are given to the collective bargaining units, but no money is put in the budget to offset that increase, and the hospital traditionally underspends our General Fund allotment of $100,000. Others overspend it. It seems we are constantly being penalized for performing well. The public can see we are putting money right back . We are neglected by the government. Since 1996, we've had no capital improvement funding. We have federal grants to make improvements."
He continued: "We've been operating on a budget that is basically the same as 1996 over a number of years, and when it is raised, then it is subsequently, cut."
"These are tough times," Miller said. "We spent $6 million on a nursing contract. That's unheard of anywhere in the nation. We come up with creative ways to cut costs, and then we are shot down. We're doing our part. If they pay us, then, indeed, we will pay.
"A year ago we met to discuss the issue, and we did begin to pay, until December last year, when the nursing crisis hit. The traveling nurse company said 'no more nurses' until we pay, so nursing became our priority. We started paying the government, but they didn't start paying us."
And, Miller said, the hospital is current with the Water and Power Authority: "We actually pay our bills. However, when the government is not making any necessary steps to pay their obligations, we just can't keep going."
According to Miller, "What really hurt us was the $2 million we spent on accreditation. Look how much better off we are doing now than we were before, when we were considered beleaguered."
Juan Luis Hospital, according to Finance Department documents, owed the government $15.3 million as of May. Earlier this week, Molloy and Commissioner Turnbull sat down with the St. Croix hospital's recently arrived CEO, Gregory Calliste, to discuss the situation.
Calliste, who was named the hospital's top administrator in January, said on Wednesday that it was the first time since taking the job that he had been shown the extent of the debt against the Revolving Fund. He said he would have to come up with a plan to address the problem.

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