With funding that’s half of what it asked for in fiscal year 2025, the Guam Memorial Hospital Authority is anticipating hiring freezes, reduced nursing staff, and longer wait times in the emergency room, according to hospital officials. The budget passed by senators late last month will give GMH a subsidy of $37.7 million. That’s only about half of the $74.3 million that the hospital said it needs to keep up with the cost of keeping doors open in fiscal 2025. GMH doesn’t make enough money in any given year to keep up with costs, and needs tax revenue from GovGuam to help cover the gap. Already short in fiscal 2024, GMH leadership has projected a $40 million increase in expenses for fiscal 2025. Hospital Administrator Lilian Perez-Posadas said the hospital’s executive management council met last week to figure out how to increase funds and costs in light of the shortfall in funding from lawmakers. GMH Chief Financial Officer Yuka Hechanova said the only big cost cut that can be made is on personnel. Hospital supplies have seen steep price increases in the years since the COVID-19 pandemic, but “we need all the supplies,” Hechanova said, and there is no cut that can be made there. That leaves funding for staff positions that aren’t currently filled, which could save a significant amount of money if cut but will leave GMH unable to hire medical personnel. “Most of the people rolling in on our payroll are nurses and clinical staff…because they have a high turnover rate, we’re constantly hiring, they’re retiring, they’re leaving, they’re moving to the states,” Hechanova said. A hiring freeze is not in effect yet, though Perez-Posadas said it may have to come down the line. She said GMH management will have to work through that with the hospital board of trustees. Can’t afford travel nurses anymore Besides vacancies, the $8 million that GMH is paying for travel nurses is something that GMH can’t afford anymore, according to Hechanova. There are 31 travel nurses on staff at GMH, and that number could be reduced by around half as travel nurse numbers are scaled through October and November. Management now needs to make tough decisions, like leaving beds unstaffed as travel nurses are pushed off the payroll, Perez-Posadas said. “Patients in the emergency room, when they come in for a cardiac bed, telemetry bed, they may have to wait longer in the emergency room,” the administrator said. Keeping nurses on board has been a challenge for the hospital, and the 18% pay bump meant to boost retention has been so far successful, according to Perez-Posadas. Around 70 nurses quit GMH last year, with only around 40 hired. This year, the hiring of about 30 nurses has outpaced departures, Perez-Posadas said. But pay raises have also made it harder for GMH to keep up with costs, Hechanova noted. In the last three or four years, adjustments for all staff, including nurses and doctors have added $20 million to $25 million. “It’s a very expensive endeavor to keep the hospital open, because we need all our people here and like health care across the country, that’s been the biggest cost is labor. We’re paying our doctors more so that they don’t leave, and we have to pay our people more,” Hechanova said. Other costs to be weighed are outpatient specialty services and elective procedures, like gastroenterology and cardiology. Those services bring in cash for GMH, but they also require nurses who would otherwise be staffing acute care beds. “We really don’t want to,” Perez-Posadas said, but cutting back on those services may have to be weighed. After getting a $30 million bailout for GMH vendor payments early this year, the hospital is once again behind by about $17 million on vendor payments, Hechanova said. Improvements in collections and billing have brought GMH income up to around $13 million a month, she said, but it still takes around $16 million to cover costs. “That’s the deficit that we really need to (address)…from the Legislature for the extra money, just so we can get that we pay vendors so late. They really don’t like us, because we’re terrible customers,” Hechanova said. Billing, collection woes GMH has a collection rate of about 36%, but according to Hechanova, after adjusting for patients who can’t pay at all and caps on Medicare reimbursements, or “what we expect to collect,” the figure is closer to 85% or 90%. Perez-Posadas stressed that the hospital doesn’t turn any patients away. There is some help coming onboard to improve billings and collections, according to Perez-Posadas. The Guam Economic Development Authority put a contract for hospital finance consulting services out to bid, which Perez-Posadas said will help with improvements in billing and collection. Another $150,000 in grant funding will also help with information technology infrastructure assessment, which will further help with billings, she said. Funding comes from the $158 million in Broadband Equity, Access, and Deployment, BEAD, grant funds that GovGuam has received. In the short term, GMH is still hoping that senators will provide more money, when talks of a supplemental budget come around, Perez-Posadas said. Lawmakers are expected to sort out, around October, what to do with about $27 million in excess revenue GovGuam has collected this fiscal year. There are about $100 million worth of competing programs for the money, the Pacific Daily News has said. For patients, come Oct. 1, the start of the new fiscal year, “you will still be taken care of,” Perez Posadas said. Heart patients that need a spot in the telemetry unit, “you may have to wait a little bit longer,” she said.
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