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The furlough of nurses, doctors and other staff at the LBJ Medical Center has been canceled and the new fees have been reversed. This was the announcement by Gov. Togiola Tulafono in a meeting with LBJ hospital senior officials and staff yesterday afternoon at the hospital chapel.

At the meeting, the governor officially signed the $3 million loan bill providing immediate cash infusion to address the hospital’s financial crisis. At the same time, the governor along with hospital board chairman Moananu Va and LBJ chief executive officer Michael Gerstenberger, also signed the loan agreement.

The loan is being funded by the Workmen’s Compensation account, and is to be repaid with a new 2% wage tax. After it is paid off, all revenues collected will go to LBJ — 50% for operations and 50% for the off island medical referral program.

With the bill and the loan signed, the hospital agreed to the following conditions:

•             Effective 8 a.m. today, the fee hikes, implemented Feb. 6 are rescinded and revert back to the previous fees — for example, $10 for outpatient visits;

•            Effective yesterday, the Feb. 19 furlough previously announced has been canceled;

•            Effective with the start of the pay period on Mar. 4, LBJ will implement “a temporary hour reduction for non-exempt employees”.

The reduction in hours will be stepped according to salary. For example, an employee getting $20,800 annually will get a four-hour reduction every two weeks, while those in higher wage categories will get a higher number of reduced working hours;

•            Effective with the start of pay period on Mar. 4, temporary voluntary wage reductions will be sought from contract and exempt employees, not affected by the reduction in hours; and,

•            Beginning Mar. 4, all outpatient clinics will be temporary closed on Fridays until further notice.


In his speech, the governor told LBJ staff that the current problem faced by the hospital is everyone’s problem. “Not just the medical center — this touches each and everyone’s lives… in this territory,” he said.

“The fact that regardless of what the issue is going to be [at LBJ], I think it was a mistake for some of you to assume that we (ASG) don’t know and then some of you went further to assume that we don’t care,” Togiola said.

“This is our island, this is our people, this is our country, this is our government. There’s nothing that we do not know about on what’s going on and there’s nothing we do not care about, and care seriously about. And for some of you to assume that we don’t care, it’s a terrible mistake,” the governor said. “If you can all just concentrate on doing your jobs that you were called to do, we can all get through anything that happens.”

Togiola commended the legislature for approving the $3 million appropriation the way it was passed, in that it becomes a loan to the authority, addressing some of the temporary and short term needs to get the hospital through the difficult times.

However, at the same time, lawmakers have also authorized a form of revenue that will replenish the workmen’s compensation fund, because the government also needs to protect the ASG employees, he said.

Togiola reminded the LBJ staff that when they are injured or sick while carrying out their duties, it’s his job to provide for them and that’s what the workmen’s compensation is all about.

“Some of the employees who face the most serious hazards that we insure through the self insurance plan are you (LBJ staff), because you work with some very dangerous conditions everyday — nurses and doctors... we need to protect under the workmen’s compensation,” he said.

He commended Moananu, Gerstenberger and the hospital administration for agreeing to the loan terms, but was quick to point out that the $3 million loan will not help solve the problem.

“This will allow you to go back to work, get some of the clinics open sometimes, it’s going to roll back some of the charges, so that our people will come back — I understand they are not coming here because it’s too expensive — it will allow the population to do some things that allow us to take care of them and to serve them,” he said.

The governor revealed that the $3 million loan will help the hospital until April and said that he has put forth another request to the Fono to authorize ASG to borrow money from the ASG Employees Retirement Fund and the hospital will not pay a penny.

Instead, the $8 million retirement fund loan is proposed to be paid with a hike in excise taxes for alcohol, tobacco, beer and business licenses. (This measure was submitted early this week to the Fono and not yet introduced in either chamber.)

“So we’re spreading the load and the burden of repaying this $3 million as wide as we can to lighten the burden, [and] at the same time allow our sick population who need help to come to the hospital and be served and to be taken care of,” he said.

According to the governor running the hospital as a business is not going to work.

“It will never work, there are some business ideas, concepts that we need to engage in order to have adequate and cost efficient services, but we’re not in this business to make money, we’re not going to be charging any rates, to give you a lot of reserve,” said Togiola, who reminded everyone in the room that it’s the hospital’s mission “to serve the people... not to make money, not to get rich.”

He told the staff that they need to work together.

“The authority comes under the jurisdiction of the governor and if you have this idea to keep running back and forth to the Fono, it’s not going to help anything ... it just makes things too difficult at the end of the day,”the governor said. “No matter what the Fono does, it ends up on my desk and If I don’t like it, it’s not going to work”.

Togiola did not touch upon the hospital subsidy that is still delinquent, and is used by LBJ to pay the medicaid match; nor did he speak about the $10 Million bill before the Fono to finance the off-island referral program; and the subject of dissolving the authority was also not mentioned during the meeting.

Samoa News reporter Fili Sagapolutele contributed to this report.