‘Excessive’ hospital expenses bared

[B]MAJOR EXPENSES[/B] -Payroll cost amounts to $1.6M monthly
-$400,000 monthly for power, or $4.8M annually
-Linen supply costs $21,000 monthly, or $700,000 daily use
-$500K monthly for non-U.S. dialysis patients, or $1.2M annually
-$7M annually for dialysis, laboratory supplies
-$500K monthly for maintenance contract

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Commonwealth Healthcare Corp. chief executive officer Juan N. Babauta blames the excessive expenditures of the Commonwealth Health Center in past years for the sad state of the hospital.

For payroll alone, the former Department of Public Health needed to fork out $800,000 bi-weekly, which translates to $1.6 million every month or $19.2 million each year, Babauta said, speaking at yesterday’s general membership meeting of the Saipan Chamber of Commerce.

In previous fiscal years, DPH was allocated $44 million annually, more than half of which went to payroll. This fiscal year, the corporation was allocated just $5 million as seed money, an amount that Babauta said makes it impossible to sustain the hospital’s operations.

He said the corporation needs to do some streamlining so it could operate based on a realistic budget, even if it mean laying off staff.

“I have to do some streamlining. I know that in this community and in this culture, firing people is not a very good idea but we probably have to do it,” said Babauta.

Just recently, the Commonwealth Utilities Corp. sent a collection agency to the hospital to force it to pay its bills, he said.

Babauta said that CHC’s power use is averaging at $400,000 monthly, equivalent to an expenditure of $4.8 million a year in utilities alone. “I almost fell off my seat when I first learned about it.”

He said CHC kept a dead body in the morgue for over four years, which contributed to the increasing cost of power at the hospital. “The hospital kept this body in the morgue for four years and taxpayers were paying for it.” The corporation finally decided to give the body a decent burial, in consultation with the CNMI’s Chinese consul.

As procedure, hospital staff put its dirty linens in a basket and sends it to an outside cleaner. Without proper control and accountability of the used supply, CHC merely pays for what the contractor bills it. In August 2011, CHC was billed $21,000 for its linens, which translates to roughly $700 being spent daily for this service.

“I can take the $700 and provide CHC a clean brand new linen everyday if that’s the cost!” he said.

Because of the lack of proper control and accountability, Babauta said that supplies have been “walking out” the facility unnoticed. “Literally, wheelchairs and linens walk out of the hospital because there is no control.”

[B]‘Housekeeping contract’[/B]

Babauta said the hospital also pays an average of $500,000 monthly to keep its buildings clean. In the last four years, DPH paid $2.5 million for its housekeeping service.

For supplies, he said $7 million is spent yearly for dialysis patients ($4 million) and laboratory supplies ($3 million).

Babauta disclosed that there are 20 dialysis patients, including non-U.S. citizens, who continue to receive treatment at CHC, costing CNMI taxpayers $1.2 million yearly. On a monthly basis, these patients incur $500,000 worth of medical services.

“This has to stop. Somebody has to pay unless you, taxpayers, are willing to pay for their bill. We have to begin charging [them],” he told the crowd.

For the inter-island medical referral program, which covers Rota and Tinian, the two islands average 25 referrals in any give month and CHC pays for their airfare, lodging, and ground transportation. This is in addition to paying for the salaries of two FTEs and the three meals provided daily to these patients. Babauta said this means an additional 75-meal expenditure for the corporation.

“I told the Legislature to prepare themselves because they will start paying for this stuff. This is what’s causing the hospital’s financial nightmares,” he said.

Babauta also found out that CHC has been very generous in allowing private clinics to dump their biohazard waste in the hospital’s sewage with no charge at all.

“I didn’t know that we belong to the Salvation Army. I don’t have anything against private clinics but let me tell you the real facts: private clinics close at 4:30pm each day, CHC keeps its doors open 24/7. Private clinics take the cream of the crop in terms of health insurance payment, CHC gets the rest; but private clinics can refuse seeing you, CHC cannot,” he said.