Schneider CEO: Hospital Struggling Financially, Owes Close To $18 Million To Creditors

Dr. Bernard A. Wheatley, CEO of St. Thomas’ Roy Lester Schneider Regional Medical Center (SRMC), Tuesday, in testimony before the Committee on Health, Hospitals & Human Services, chaired by Sen. Kurt Vialet, detailed the financial woes of the medical center and revealed that the hospital has an outstanding accounts payable debt of close to $18 million.

Dr. Wheatley told senators that the current level of funding makes it difficult for the facility to render the full scope of services expected by the community. He said appropriations are insufficient to meet the mandate of operating the only acute care hospital in the St. Thomas-St. John District, the cancer institute, and a 24-hour urgent care clinic on St. John.

SRMC is facing serious financial difficulty, Dr. Wheatley admitted, especially with the facility’s outstanding debt of $17,738, 667 to its creditors.

The CEO said there are four major challenges threatening the financial health of SRMC, including: competition from freestanding surgery centers. That is, a significant number of surgeries have migrated away from the hospital’s operating rooms to external surgical facilities; difficulty staying on top of raises for their nurses, clinical and ancillary staff due to reduced funding; the cost of replacing permanent staff with higher-cost agency staff, and reductions in the workforce because of budgetary cuts; and the Fiscal Year 2014 operating loss of the Myrah Keating Smith Community Health Center at $2,170, 628.

Regarding the FY 2015 projected budget, Dr. Wheatley said expenses are $106.5 million, reflecting a decrease of less than 5 percent from FY 2014 unaudited financial statements. According to him, salaries and wages represent a total operating expense of $36.2; fringe benefits account for $9.3; professional fees proposed at $12.4 million; materials and supplies proposed at $17.7 million; other services and charges budgeted at $5 million; utilities costs at $5.9 million, which reflected an increase in utility rates and increased services.

According to Dr. Wheatley, SRMC has a total of 533 employees; of this number, 292 are paid through the Government General and Revolving Fund on a NOPA basis. The remaining 261 are employed through a hospital contract, and receive health insurance benefits, but not retirement benefits. The hospital contract is funded through SRMC’s operational funds.

Dr. Wheatley told Vialet he estimates it would take $2 million to have all staff be NOPA employees. When asked by Vialet, he agreed that it would make sense for the hospital’s 261 contracted employees to become full-time employees.

Vialet explained that his line of questioning had to do with the necessity of devising a plan to sustain the financial viability of the Government Employees Retirement System, which continues to lose its members.

“If we were suppose to devise a method in which we can get all of the hospital employees who are not receiving GERS to come online,”  Vialet began, “then we would have automatically five to six hundred employees who would be paying GERS on a regular basis, and in fact, help the retirement system.”

The hospital also has 17 part-time and 24 per-diem employees.

Officials from the Juan F. Luis Hospital and Medical Center also testified at the hearing, where hospital CEO Dr. Kendall Griffith was criticized for doling out $720,000 in raises, even as the hospital continues to struggle financially.