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Luis Hospital Board Declares Financial Emergency


Luis Hospital CEO Jeffrey NelsonDeclaring a financial emergency, the board of directors of the Juan F. Luis Hospital turned to new CEO Jeffrey Nelson Saturday, unanimously passing a resolution giving him authority to follow expedited procedures to right the ship.

Nelson expressed confidence that the situation can be salvaged, saying it was an exciting time for the hospital, and called on the community’s support in finding ways to put the facility back on sound financial footing.

The board’s special session Saturday afternoon was held in the third floor classroom of the hospital, as usual, but it might better have been held in the emergency room given the dire nature of the situation, with red ink flowing to replace the more common liquid in that setting.

According to figures presented at the meeting:

  • The hospital has lost $3.7 million during the current fiscal year through January, slightly worse than the $3.5 million loss for the same period in 2010.
  • The hospital has $2.3 million cash on hand and is making payroll.
  • The hospital’s accounts payable, the money it owes vendors, is $22 million; 90 percent of that debt is owed to 23 of the 210 vendors owed money, including Advanced Radiology, the Water & Power Authority, and Worldwide Travel Staffing.
  • The hospital owes the government of the U.S. Virgin Islands $2.9 million for health benefits and internal revenue payments. WAPA is owed more than $3 million.

"It’s embarrassing, we can’t pay our bills," said board chairman Valdemar Hill.

According to Hill, vendors are beginning to seek relief, contacting the hospital’s finance department and calling on government leaders.

The debt to pharmaceutical companies exacerbates the hospital’s shortage of medicines, he said. The board agreed to ask the V.I. Senate to reapportion a third of the $1.5 million already approved for renovating the emergency room. That money would be used to pre-pay for drugs, Hill explained, allowing the hospital to get the needed drugs at a greatly reduced price.

Nelson remained upbeat throughout the meeting and afterwards, saying with the community’s support the hospital will weather the emergency and come out stronger. The authority granted to him by Saturday’s resolution allows him to take steps to reverse the situation, including accelerating collection of debts owed the hospital, revising and improving internal operating systems, seeking the infusion of additional capital and assessing the hospital’s operations to increase revenue and cut expenses.

"We’re really excited about this," he said.

Hospitals make money by performing procedures, he said, not by providing long-term care during long hospital stays.

"Patients need to be here for as long as they need to be, not one day more or one day less," he said.

He also wants to convince the community that the hospital is the best place for them to have necessary medical procedures, not to fly stateside or to Puerto Rico to have work done. The operating room can be a major revenue generator.

Nelson said he is looking forward to hearing from community members with their suggestions for resolving the hospital’s fiscal problems. He also said he is committed to greater transparency so that anyone can understand JFL’s financial situation.

After Saturday’s meeting reporters were handed a fact sheet that included the current balance sheet, information that has sometimes been difficult to get from the hospital. He said at the board’s next regular meeting, March 16, he will ask to post that information online where anyone can see it.


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