CHC pleads for $10M subsidy

Commonwealth Healthcare Corp. chief executive officer Juan N. Babauta told the House Ways and Means Committee yesterday that CHC’s proposed budget for fiscal year 2013 is over $40 million, $10 million of which will be subsidy from the government so that CHC will be able to treat indigent patients.

“We appeal to you to appropriate $10 million,” Babauta told the House committee with oversight on government budget.

The rest, some $30 million, will come from CHC’s own revenue, mostly from hospital service fees.

Babauta and CHC chief financial officer Alvaro Santos said they are projecting that average collection will be $2.8 million a month, but cautioned that this is a fluid figure.

CHC’s proposed budget, based on CHC’s own records shared with lawmakers yesterday, is $40,293,859 from Oct. 1, 2012, to Sept. 30, 2013.

However, some lawmakers questioned why CHC officials is asking for $10 million when the difference is less than $7 million. CHC said the requested figure allows for some wiggle room if there’s shortfall in collections.

Rep. Ray Basa (Cov-Saipan), Ways and Means chair, said the panel is taking CHC’s request under advisement. The governor’s fiscal year 2013 budget is capped at $102 million.

Fitial’s proposed 2013 budget only gives $2.5 million subsidy to CHC, which will also be used as state share for Medicaid for a total of $5 million. That’s the same amount of “seed” money that the administration gave CHC for 2012.

From 600-plus to only 436 employees

Of the over $40 million projected budget, CHC appropriates more than $19 million for “total personnel costs.”

The number of positions or employees funded under this 2013 budget is 436, down from the 600-plus positions this fiscal year.

Babauta said the difference of some 200 will be a combination of reduction-in-force, resignations, and vacant fulltime employee positions that will be removed and not replaced.

Rep. Trenton Conner (R-Tinian) and Rep. Teresita Santos (Ind-Rota) separately asked about the number of Rota and Tinian Health Center employees that may be covered by the RIF, and Babauta said: 12 at RHC and 12 at THC.

The 24 from Rota and Tinian will be in addition to the “15 to 17” that will be let go at the Commonwealth Health Center on Saipan, for a total of 39 to 41 within the month.

CHC had already laid off 19 at the Community Guidance Center and the Dental Clinic, officials said.

Corporation officials also told lawmakers that 30 registered nurses and four doctors will be leaving soon.

Babauta said they will be replacing nurses and doctors because of the critical nature of their jobs. He said they are also looking at nursing graduates from the Northern Marianas College if and when they pass the NCLEX.

Babauta and Alvaro Santos said the $10 million subsidy is separate from the additional $7 million revolving line of credit with the Marianas Public Land Trust. CHC has already drawn down $3 million of the total $10 million line of credit. There is also a separate $1.58 million loan. That additional $7 million line of credit is authorized in a bill that is now with the governor.

Santos said that if the government approves the $10 million subsidy for 2013, CHC may not even have to draw down from the maximum additional $7 million line of credit so that the corporation won’t have to pay for interest and the principal amount.