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Sparse turnout for LBJ public hearing

LBJ Medical Center chief executive officer Mike Gerstenberger and the board chairman Moananu Va in the public hearing for hospital fee hikes, two Fridays ago (June 8), reiterated management’s reasons for the hikes, to an audience sparsely attended by the public.

The public hearing held at the LBJ chapel opened with LBJ board chairman Moananu Va informing the gathering that only 13 members of the public showed up, although some 30 plus people had requested such a hearing. 

At least 30 people were present at the hearing, but a majority of them were staff and officials of the medical center.

Moananu said that under local regulations, the public meeting should only be held if 25 or more people — the public — are present. However, he said that the hospital will go ahead with the hearing, adding that this is not the first time such a hearing was held on this same issue with the first held last December.

The chairman then pointed out that LBJ needs additional money for operations as the cost to provide medical care has increased, the population has gone up, and the number of special patients has hiked.

For example, he said there are currently 117 dialysis patients treated at the hospital and the youngest of them is a  teenager. He said the hospital needs additional revenue sources to care for the increase in dialysis patients, as more residents are not taking care of themselves.

“We’re eating the wrong food and we’re not excising more,”  he said. “We need to eat the right food... and exercise.”

He then provided the latest statistics on new births for 2012: January there were 94 new babies; 89 in February; 91 in March; 92 in April and 97 in May. “That’s too many new born babies here. There is just not enough room to take care of the new born babies,” he said and noted that the fee hikes will provide additional revenues for the hospital for capital improvements, such as expansion of hospital wards.

Gerstenberger then gave his slide presentation, which is similar to the one he gave last month at a meeting of the Chamber of Commerce.

In the presentation, the CEO outlined the struggles faced by the hospital such as the shortage of physicians, nurses and other medical professionals - i.e. LBJ has being without a Radiologist for two years; and the shortage equipment, for example, the mammogram machine is non operational.

He said about 80% of the LBJ’s budget of around $37 million is funded with federal money, which means LBJ strongly relies on one major source of funding. Federal money includes Medicaid, Medicare and U.S. Department of Interior funding.

He points out that Washington is making cuts in federal funding across the board; therefore LBJ must come up with other sources of revenue.

Gerstenberger told the audience there has been no fee hike at LBJ since 2006 while the “average health care inflation has gone up three and half percent a year,” referring to the cost of things purchased by the hospital — such as medication.

“So in the last seven years we have lost 25% of our purchasing power. Just to stay even, to buy the same things, we need 25% more money,” he said and noted that the fee increases are included in the proposed FY 2013 budget.


Responding to a question from the public, Gerstenberger said, “It’s technically not an increase because my purchasing power has decreased by 25%” in the last seven years.

For example he said in the surgical clinic, the “LBJ’s direct cost for a clinic visit is $70” which covers among other things, salaries of the doctors, nurses and supplies. And then there is the “LBJ indirect cost of $93” for the visit, and this covers among other expenses, the cashier who accepts the current $10 facility fee, the operator who answers the phone when the patient calls for questions and the person at the business office handling the patient’s account.

“So the average cost of the clinic visit is about $163 that somehow needs to get paid. Right now, if you are a ‘resident’, you only pay the $10. And that disparity-- which is getting bigger -- has our purchasing power decrease,” he said. “...this is really why we are asking now for a [fee] increase.”

(Under the new fee hike, a surgical clinic visit for residents is $50, while ‘non-resident’ pays $50 “at time of service” and  $695 is the “balance due later”.)

He also said that an average hospital in the U.S., the size of LBJ — according to bond rating agencies — should have about 170 or 180 days of cash in the bank in case of an emergency need.

“We have about three hours of cash on hand,” he said, adding that as soon as LBJ gets money in, the chief financial officer has bills to pay, or it’s payroll time. “We have no reserves. That’s not a good place to be.”

(An independent audit of the FY 2011 budget for LBJ found, that during the fiscal year, the hospital “used all but $116,000 of the $2 million plus of cash reserves” due to ASG’s failure to pay $2.9 million in required subsidies.)

“So when you put all those things together — very uncertain federal funding that is likely to decrease, decreased purchasing power of our dollar, we need to have more equipment, modern equipment, and more well trained staff — the bottom line is we need to find other sources of cash,” said Gerstenberger.

“And having citizens take more responsibility, personally out of their pocket, we think that’s more important in that equation,” he added.