In its fiscal year 2014 second quarter performance report — covering the period of Jan. 1-Mar. 31, 2014 — the LBJ Medical Center claims that it is owed over $3 million from the 2% wage tax, which is collected from all wage earners in the territory.

Approved in early 2012, the tax was meant to first pay off the hospital's $3 million loan from the Workmen’s Compensation Account (which has been accomplished) and thereafter all revenue from the tax is supposed to go to hospital operations, including the off island medical referral program (it was not to be used for payroll).

The LBJ report, dated Apr. 24 (and included with all other ASG entities received by the Fono late last month) from hospital chief executive officer Joseph Davis-Fleming, has prompted some lawmakers to seek additional financial information with LBJ management.

The lawmakers are also seeking a financial breakdown of spending and revenues for LBJ during the second quarter as compared to the first quarter, because it's not clearly stated in the report.

For example, the report states briefly that as of Mar. 31, 2014, ‘gross patient revenue is ‘under’ budget by $25.47 million or 53%' but it does not provide a clear explanation of how it is ‘under budget’ or the reason for it.

For the wage tax, the report says LBJ is still owed $3.32 million on wage tax payment from ASG, and this includes just over $589,000 from FY 2012 and $2.73 million in FY 2013-FY 2014 (which includes $1.44 from the private sector workers and $1.29 million for ASG workers).

Meanwhile, a ‘synopsis’ provided in the report states that LBJ’s financial condition continues to steadily improve since last December due to the support of the Executive Branch and the Fono following a significant budget increase in LBJ’s FY 2014 compared to previous fiscal years.

However, LBJ says additional funds are needed to finally resolve the perpetual carryover of unbudgeted/ unfunded debt accumulated over the course of many years, as well as to adequately cover increased patient service needs and hospital operational costs due to rise in chronic diseases and preventable deaths, leading to increased demand for off island referrals.

The report went on to claim that decreased receipt of budgeted funds from ASG Treasury over the past year has perpetuated the chronic financial hardships the hospital finds itself under every year, despite efforts which a new board and new CEO have undertaken to get the hospital out of debt by re-organizing a more financially sustainable hospital for the future.

It also says that following the first phase of the hospital re-organization process initiated ten months ago, the board and CEO feel very confident that in moving forward, the re-organization will save money for the hospital and improve patient care services in the long term.

“The continued hiring of the newly defined, highly qualified management positions will also be open, competitive and fair in an effort to re-establish a culture of transparency and accountability in implementing personnel hiring policies right away,” it says.

(Samoa News should point out that Sen. Galeai Tu’ufuli, chairman of the Senate Government Operations Committee, has questioned the hiring practices at LBJ — including hiring of top management posts, and has launched a probe into this issue. See Samoa News  edition May 30 for more details).

According to the report, the CEO has initiated plans to re-design a more cost effective in patient hospital program as well as re-designing the current clinic and ER operations to improve patient services and medical outcomes in a more cost effective manner.

Since the new CEO took over the helm at LBJ less than 11 months ago, he has identified numerous long-standing chronic systems problems that must and will be changed as part of streamlining operations for cost control, the report says.