LBJ submits request for $15M in supplemental funds


LBJ Medical Center has submitted to the government a $15 million supplemental budget for fiscal year 2012, while the Senate moved swiftly to have a $3 million appropriation bill approved to assist the cash-strapped hospital, which is faced with an unexpected expenditure for FY 2012 with the addition of the Emergency Medical Service.

According to the Jan. 6 supplemental budget request totaling $15.5 million, LBJ is seeking $2.8 million in ASG subsidies which were not received in FY 2011; $475,686 for the EMS appropriations; $10.1 million for the off-island medical referral program; $575,000 for continuing education; and a little over $1 million in Capital Equipment.

The request also outlined urgent needs for LBJ. For example, “emergency assistance”, needed by or before Jan. 20 is $1.9 million to fund hospital operations and to “begin to bring vendors current.”

Additionally, by or before Feb. 5, the amount of $1.34 million is needed to “bring remaining vendors current”. And by the 5th of each month thereafter — and until a sustainable and predictable revenue source is identified and operative — the hospital needs $354,000 in ASG subsidy.

The request, however, does not provide a funding source, which is something the executive branch will have to identify before this proposal is officially submitted for legislative consideration. It’s unclear if the governor will act on the LBJ request.


LBJ states that in FY 2011 it only received $1.72 million in ASG subsidy compared to the approved $4.61 million. LBJ also says that without any notice to the hospital, the ASG Treasury Department “withheld” $100,000 from the October subsidy payment as partial payment of “insurance premiums” for FY 2011 property insurance for the hospital buildings.

“Treasury considers this withhold a deduction from the LBJ subsidy,” said LBJ.

LBJ chief executive officer Mike Gerstenberger told Samoa News yesterday that the total amount appropriated for the first four months of fiscal year 2012 (October to January) is $1.41 million but LBJ has received only $762,000 with no payment received yet for January.


While some lawmakers are complaining now as to why the Fono was not informed in advance of the LBJ’s financial troubles, the hospital’s supplemental request detailed dates of notices, hearings and meetings with Fono and the Executive Branch where this issue was raised.

For example, the executive branch and the Fono “were apprised of our deteriorating financial positions” in the LBJ quarterly performance reports of Jan. 24, Apr. 25 and July 15 in 2011. There was also a meeting between LBJ and the ASG Treasurer in June 2011 about this matter.

There were separate hearings by the Senate and House health committees in July and August last year in which LBJ finances were discussed. There was even a July 6 letter from the LBJ board chairman to the governor with copies to the Fono on the financial difficulties faced by the hospital.


Responding to inquiries, Gerstenberger dismissed reports received yesterday by Samoa News that a management-staff meeting had been held on Tuesday about the possibility of layoffs if the hospital didn’t receive sufficient funding. Gerstenberger said no such meeting occurred.

“Obviously, if we have no money, layoffs would be a reality, but we are not there yet,” said Gerstenberber, adding that LBJ has a number of contingency plans in place if a layoff is warranted, and none of them are good. “Any layoff will negatively impact patient care. We are actively working to avoid this.”


During yesterday’s Senate session Senate President Gaoteote Tofau Palaie introduced a bill that seeks to appropriate $3 million for hospital operations using the $4 million in the Workmen’s Compensation Account as the funding source. This is one of five measures Gaoteote said he would introduce to assist the hospital, although the governor last month informed the Senate President that the administration does not support any of the proposals.

The Senate held a committee of the whole hearing to discuss the measure after the session. Sen. Velega Savali Jr. told his colleagues that he is concerned with passage of this bill because it will be vetoed by the governor.

Gaoteote said the veto issue is not a priority to him, adding that what’s important is that the Fono take necessary action to assist the hospital.

The committee plans to report this measure to the Senate floor today for second reading to be approved.


Comment Here