CEO getting GMH’s finances in order - KUAM.com-KUAM News: On Air. Online. On Demand.

CEO getting GMH’s finances in order

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by Mindy Aguon

Guam - For decades the Guam Memorial Hospital's finances have been in the red.  Week after week vendors send invoices demanding payment and threatening to cut services and supplies. But the agency's new administrator/chief executive officer is trying to get GMH's financial house in order.

CEO Joseph Verga knew he wasn't going to have it easy taking on his role of the island's only civilian hospital. In the four weeks he's been on the job, Verga has been inundated with calls from vendors demanding payment and threatening to cut services and supplies.

In fact, just this past week the Guam Power Authority came intending to cut electricity at the hospital, but Verga managed to avert that with a $174,000 payment on GMH's $300,000 power bill.

Then there was the close call with the linen vendor threatening to stop providing clean bedding for the hospital.  Verga managed to ensure delivery would continue with a payment. The constant barrage of e-mails, phone calls and letters has Verga trying to get the hospital into fiscal order, but he won't be able to do it without a chief financial officer.

"I need someone to work with them and oversee them and really improve all the billing and collection practices and really change and improve things across the board so I can really be free to be out there to work in other areas that equally need as much attention," he shared with KUAM News.

Verga intends to begin interviewing potential CFO candidates next week, as he is working on a plan to stabilize the hospital's finances both in the short- and long-term to get out debt and into the black.  He stresses though that that will require commitments from the government, adding, "So there are a lot of fronts that we're attacking the financial issues on. There's also a lot of challenges with regard to recruitment of specialized professionals, retention: salaries here on Guam are not really competitive with those on the mainland, which further compounds the challenges."

In addition to looking for ways to increase efficiency throughout the hospital and realize cost savings wherever possible, Verga says he is also taking an alternate route by seeking rate readjustments based on the populations they serve. "If we can clearly show, and we clearly can, that our costs far outweigh, based on needs far outweighed by an unfair funding methodology then hopefully we can get those rates adjusted both on the federal and local level," the CEO continued.

The hospital is paid on per diem rates and the federal government, through Medicaid and Medicare, reimburses the hospital sometimes only $0.30 to $0.40 on the dollar, meaning the hospital never recovers its costs. Verga is also looking at various federal designations that could result in a higher funding mechanism for the hospital.

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