GMH looks to stabilize flatlining finances - KUAM.com-KUAM News: On Air. Online. On Demand.

GMH looks to stabilize flatlining finances

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by Mindy Aguon

Guam - The new management team at the Guam Memorial Hospital has had a little more than a month to review the books and begin making the changes they believe will put the hospital on the road to recovery. GMH makes it clear that part of bringing stability to the ailing financial situation is doing away with exorbitant physician contracts that were approved in the past.

"It's getting better," promised Siva Karuppan, "better in the sense that we're discovering excesses that we can control, and there are some excesses that we cannot control. But we are finding other means to help us in that situation."  As GMH's chief financial officer, Karuppan is optimistic that the once flatlining finances at GMH are well on the road to recovery.  The new management team, put in place by Governor Eddie Calvo, has been looking at each department in the hospital and looking at what expenses can be cut without jeopardizing patient care or safety.

One area that is undergoing significant review is physician contracts. "We are looking at every contract we have with every physician to ensure that the hospital at least captures those charges that we have laid out," Karuppan noted.

But practices of the past weren't recovering a single penny for what the hospital was paying out.

For example, a neurosurgeon was brought on board to work 20 days a month on Guam for $400,000 a year. KUAM News confirms this physician only performed 8 surgeries in 2009 - that breaks down to $50,000 apiece.  Last year, the neurosurgeon only did a single surgery for the entire year, despite receiving the full $400,000 he's contracted to get.

Karuppan admits GMH is losing out...big time. He continued, "As it currently stands, we lose technically $400,000 a year because we do not bill for his services. So we're trying to change that and see if there's a possibility of us renegotiating the contract and billing for the services to recapture the cost that we are laying out for this physician."

GMH is also losing out on another $180,000 a year since the previous management made the decision to hire another neurosurgeon to work the remaining ten days out of the month that the other doesn't work.

Meanwhile, another hospital surgeon was brought on contract with GMH in May 2006 for $250,000 a year, but in 2008 he was hired locally but his salary ballooned to $375,000 annually. Karuppan confirms that contract is also under review.

Then there's the issue of some physicians demanding that patients, even some with insurance to pay cash up front before a service is provided.  Even though the doctor is being paid by GMH, some have been charging patients directly for the services - essentially being paid since they receive a paycheck through GMH directly, whether they work or not and then billing patients for the service they were hired to do.

The CFO explained, "There are contracts that has those provisions currently that we're looking at." KUAM News asked is such was something that this new management team is looking at stopping that provision, to which Karuppan replied, "Yes, the way to stop that provision is either to decide whether to keep that service or to terminate that service. If we decide to keep it we want to ensure that the hospital bills for those services. This way we would be able to recapture the costs associated with those services."

Additional cost-cutting measures that have been proposed include the closure of the hemo-dialysis unit that has resulted in the hospital losing more than a million dollars each year. The new management is also working to outsource transcription services to a Philippine-based company that could save $12,000 a month as well as hiring full time ultrasound technicians and dieticians.

The proposal to close the Hemodialysis Unit is one of the main issues expected to be brought up during tomorrow night's GMH board of trustees meeting.

The governor has informed the new board he empanelled to proceed with pressing issues at the hospital and until they are confirmed by lawmakers, the governor will sign off, using his Organic Act authority, on whatever decisions they make. The board is expected to meet at 6pm Thursday.

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