El Paso Children’s Hospital: “We have a serious issue”
“We have a very serious issue”…that’s how Ron Acton, chairman of the strategic planning committee between University Medical Center, Children’s Hospital, and the El Paso First insurance program described the takeaway from Wednesday’s meeting.
Acton’s resume goes back to 2007, when he sat as chair on the UMC board and voted in favor of the bond that brought Children’s Hospital into being.
“It’s an issue that needed to be addressed much sooner than now, but now is not too late,” Acton said.
ABC-7 is reporting Children’s owes $59 million dollars to UMC. Children’s Interim CEO Ray Dziesinski said they currently have an operating budget of $70 million.
“Our operating losses are very low because we have had operating losses through this fiscal year,” Dziesinski said.
Dziesinski said that in just the first six month of their fiscal year, the hospital has lost $9.6 million.
“And that means we are going to be slow in paying UMC,” Dziesinski said. “We’re not in a position to be losing that kind of cash so we’re going to have to find some way to solve that.”
At Wednesday’s meeting, about eight committee members and a handful of specialists from Austin sat down to figure out why. This is what they learned:
– The climate for state and federal reimbursements to the hospital does not resemble what it did, and what they took into consideration when building Children’s, back in 2007
– A special reimbursement for childrens’ hospitals across the country has since been eliminated.
– Medicaid has changed
– The Upper Payment Limit reimbursement, curtailed
“The reimbursements have changed considerably, they have reduced considerably. And that’s made it difficult for the Children’s hospital to be as financially successful as we hoped,”Acton said. “None of us claim to have a crystal ball, none of us knew that there’d be federal and state changes.”
Now Acton, Dziesinski, UMC CEO Jim Valenti and other committee members will be looking at potential solutions and they have to act fast to stop the bleeding.
– They’re looking for ways to reduce spending, and they said everything is on the table including all operating costs, physicians, staffing, and pending contracts with Texas Tech and UMC.
– They’re looking for ways to grow revenue or increase patient load
– Find new reimbursements to qualify for
-They’re considering restructuring their debt, or extending their payments to UMC.
When ABC-7 asked Dziesinski if UMC is taking a financial hit because of Children’s debt, he replied,” UMC has expended money on our behalf because they are apart of the service agreements. We would not be able to pay all of those amounts back. And so UMC would be out more cash than we would be able to provide to them, and so they will see an erosion in their cash position.”
Dziesinski said for a start-up hospital, Children’s provides exceptional care and has just been certified as a national cancer center. Acton said although they are looking for expenses to cut, physicians and the current level of care will be the last to go.
