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LBJ Medical Center ends FY 2011 $26 Million in the red

LBJ Medical Center lost more than $5 million in funding in fiscal year 2011 due to the failure of the American Samoa Government to provide the hospital's full subsidy during the fiscal year, which ended Sept. 30, 2011, according to LBJ's fourth quarter performance report for FY 2011.

The annual ASG subsidy is around $4.7 million - which is used to pay for matching funds for Medicaid. Hospital officials told lawmakers in August and September about their financial constraints, including tapping into its reserves due to the delay in getting the subsidy payment.

LBJ also pointed out that they were faced with the risk of losing Medicaid funds if they didn't get the subsidy to pay for the matching funds.

However, ASG Treasurer Magalei Logovi'i had testified several times in the Fono that the government wants to survive just like the hospital - and there is just not much money to go around, with the ASG payroll his "priority", followed by the allowances for lawmakers.

The fourth quarter performance report - which covers July to September, prepared by the hospital's chief executive officer Mike Gerstenberger, says ASG provided only 37% of the budgeted subsidy to the hospital in FY 2011.

"As a result, the Medical Center lost $2.89 million in subsidy funding and [LBJ] failed to qualify for an additional $2.89 million of Medicaid dollars," the report states. "The financial reserves for the Medical Center were exhausted to maintain hospital operations during FY 2011."

The report also states that while $29.35 million was forecasted to be collected from patient revenues, LBJ actually collected $34.20 million at the end of the fiscal year. However, deductions from revenues totaling $24.76 million reduced patient revenues down to just $9.43 million.

Among those deductions were: $16.81 million in "Title 13-Self-Pay Adjustments" category; $3.71 million for "non-resident fee schedule adjustments"; $4.05 million for "Medicare Contractual Adjustments"; and $162,929 for "Other Insurance Contractual Adjustments", the report states.

It also says that LBJ received a little over $910,760 in "other operating revenue" putting LBJ's patients "net revenue" at $10.35 million at the end of FY 2011.

For operating expenses, the report states that $31.32 million was budgeted for FY 2011 with personnel costs at $16.74 million- which is the  largest expenditure- followed by $9.50 million for pharmaceutical, medical and general supplies.

However, at the end of the fiscal year, operating expenses were at $37.20 million with $18.39 million in personnel costs and $11.88 million for pharmaceutical and medical supplies.  Personnel costs include wages and fringe benefits.

According to the report, LBJ ended the fiscal year in a $26.85 million operating loss.



Lawmakers have raised concerns that the hospital lacks nurses and other specialized personnel, something that hospital officials agreed with and said they were working to address.

According to the report, a U.S. Department of Interior grant made it possible for the hospital to hire four board certified physicians to assist with Medical Staff Quality Management Programs. Also during the fourth quarter, LBJ hired four registered nurses, a registered pharmacist, a Perioperative Nurse manager and a new safety officer.

The report also revealed that as a result of the Governor's Aug. 23 executive order which places a one-year moratorium on the enforcement of local law pertaining to the licensing of physicians to work at LBJ Medical Center and the Department of Health, the hospital has employed three physicians and five additional physicians are currently in "credentialing" process.

The executive order waives the U.S. Medical Licensure Exam (USMLE) requirement for a 12 month period and during this period, non USMLE physicians must continue to work towards being U.S. certified.

LBJ states in the performance report that there were 657 positions budgeted in FY 2011 but only 613 were on staff at the first quarter and by the end of the fiscal year, total work force was down to 586 - which included career service, contract workers, and temporary employees.


The hospital report also states that it recorded 262 deaths in FY 2011 including 116, or 44%, which were pronounced dead on arrival.

According to the report ‘hypertension' was among the top 10 causes of death in FY 2011, with 23 deaths. This is followed by diabetes with 16; Sepsis - a severe illness in which the bloodstream is overwhelmed by bacteria - at 15; cerebrovascular or stroke with 13, pneumonia with 12; and nine deaths each for congestive heart failure and end stage renal (kidney) disease.

The report notes that 48% of patients who died in FY 2011 had five or more co-morbid conditions - meaning that in addition to the primary cause of death, the patient had four other serious health disorders.

Other statistics in the report: there were 1,252 births in FY 2011 compared to 1336 in FY 2010; and there was an increase of 26% for dialysis visits with 15,967 in FY 2011 compared to 12,662 in FY 2010.