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HomeNewsArchivesLuis Hospital OKs Strategic Plan, But Faces Serious Cash Woes

Luis Hospital OKs Strategic Plan, But Faces Serious Cash Woes

The board of directors of the Juan F. Luis Hospital on Wednesday approved an aggressive strategic plan for making it among the best in the country, while at the same time acknowledging that the hospital’s current budget woes threaten its very existence.

While the hospital expects to turn this year’s $8.9 million operating loss to a $2.8 million positive cash flow, it owes $24 million to vendors and another $48.6 million to the V.I. government.

Last week CEO Jeff Nelson asked the V.I. Legislature for a cash infusion of $10 million. He told his board Wednesday that he got a good hearing from the senators, who asked good questions and listened carefully. But they also made it clear that there isn’t a lot of money lying around.

"Unless we have a fairy godmother to resolve it, it’s going to take some very creative thinking to get us where we need to be," board chairman Valdemar Hill said.

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The hospital expects to grow revenues by increasing procedures it offers and doing a better job of collecting debts. It is attempting to reduce waste through a "Sigma Six" program that analyzes operations and finds ways to do things smarter.

But the heavy debt load makes it impossible to borrow additional funds. Nelson is working with vendors to assure them that they will eventually be paid, but if the process takes too long, some of them may refuse to continue providing the supplies the hospital needs to operate. Reducing services will reduce revenues, creating a spiral that will make the financial outlook even worse.

"At some point the sustainability of the hospital itself could be in jeopardy," Nelson said.

And while the hospital could decrease the services it offers in the face of financial emergency, that doesn’t change the reality of the community’s health needs, he added.
"Those are fundamental decisions that should never have to be looked at by a hospital."

On the plus side, Nelson said, when the hospital weathers the current economic storm, there has been complete "buy-in" on the strategic plan, not just from the executives and board members, but by the "frontline" workers on the ground. Everyone is working together to make the hospital on of the finest in the region, he said.

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