Lacking Funds, CNMI Hospital To Reduce Workforce

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2013 budget allots only $1.9 million for operations

By Moneth Deposa

SAIPAN, CNMI (Saipan Tribune, Oct. 3, 2012) – As if it wasn't short-handed enough, the number of employees at the Commonwealth Health Center (CHC) is anticipated to further go down after the Commonwealth Healthcare Corp. announced a reduction in force and other drastic measures will be implemented in the coming weeks.

Corporation board chair Joaquin Torres and CEO Juan N. Babauta said the RIF decision was made as a result of the inaction of the Legislature to provide the hospital at least the minimum amount it needs to cover the cost of providing services to the indigent population.

Under the fiscal year 2013 budget law, the corporation-now an autonomous agency-was appropriated only $1.95 million.

The amount is far below the $10 million the corporation has been requesting for its operation in the next 12 months.

The Legislature appropriated only $1.9 million in anticipation of the $7-million line of credit earlier approved for the corporation.

But in a recent meeting of the Marianas Public Land Trust (MPLT) board of trustees, it was confirmed that until the corporation has no paying capability, the additional line of credit will not be released.

MPLT said one hope for its release is the passage of sin tax bill, which the House of Representatives has yet to introduce.

Babauta said the $1.9 million is even lower than the $5 million seed money appropriated to the organization in FY 2012 or equivalent to $400,000 monthly allotment to the corporation.

This amount, according to Babauta and Torres, would no longer be made available for the organization.

When the corporation officially took over operations of CHC in October 2011, it was only given a $5-million budget compared to $38 million received by the then Department of Public Health.

Soon after taking over CHC, the corporation had 599 total employees at the hospital including staff at the Tinian and Rota health centers. But due to budget constraints, an emergency reduction in force was implemented.

As of records last month, the corporation has only a little over 400 personnel on Saipan, Tinian, and Rota after a significant number of employees were laid off, resigned, and retired.

From $1.2 million monthly payroll cost, the corporation managed to reduce its personnel expenditure to about $800,000.

Babauta was disappointed upon getting the final budget figures for FY 2013. He described the newly approved budget figure for the hospital as a clear show of non-commitment of the Legislature on the healthcare of the CNMI people.

"There was no commitment to that. We're very disappointed and I think as a result of this, we have to resort to further reduction in force. We will reduce the overtime of personnel and we're looking at downsizing clinic hours," Babauta told Saipan Tribune.

The CEO revealed that the corporation is also looking at probably turning the Rota and Tinian health centers into outpatient clinics only while RIF will take effect again on all three islands, focusing more on non-essential services.

"We have no other choice. It's now truly unsustainable and this hospital needs to survive," said Babauta.

For several pay periods, the CEO disclosed that the bulk of the salary paid to employees was from improved collections and revenues of the hospital. Thanks to the new revenue cycle management, according to the CEO.

Babauta revealed that from collections of $643,541 in October 2011, the corporation generated $900,000 last August. In effect, Babauta said, the corporation is almost doubling its collection figure.

"We're a long way to fully staff the new revenue cycle management, but we're getting there slowly," said Babauta, alluding to the 23 positions he earlier identified to be hired for the new management cycle.

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