University Hospital gets $14m daily subsidy, half of patient fees uncollected
The University Hos-pital of the West Indies (UHWI), a critically important and valuable regional organisation with 579 beds, earned in the year $1.7 billion from patient fees, excluding funds it gets from the Tony Thwaites wing.
Some $848 million of these patient fees go uncollected and are written off.
All figures are drawn from the latest accounts for July 13, 2013.
The University Hospital is not a financially viable entity. It lives off, often unreliable, government grants from regional governments.
The loss for the year was $711 million - after treating the government grants as income - a massive increase from $327 million the year before.
UHWI has had three consecutive years of losses and the accumulated deficit now exceeds $700 million, up from $57 million in 2012.
The government grants come from 16 Caribbean governments. The big contributors are Jamaica, Trinidad and Bahamas.
The hospital has written off about $42 million of committed government grants as they are deemed irrecoverable. This seems to suggest that Caribbean governments make commitments to the hospital they later renege on.
About $1 billion was due to the hospital from contributing governments, the Tony Thwaites wing and University of the West Indies. The hospital is being used as a funding source for these entities. This should not be.
In 2013, the University Hospital received government grants of $5 billion - down by almost $500 million - and earned patient fees of only one-third that amount. Staff costs amount to $4.8 billion - about the same as the total government grant.
The hospital charges patients. It also provides $20 million of subsidised services to staff and their relatives. And it provides $167 million of subsidies to external patients.
The hospital had no indemnity insurance at year end. Accordingly, it provided $130 million to settle possible legal claims.
We are grateful to CEO Dr Cecil White for sending us a copy of the July 2013 accounts. What is surprising about Dr White's reply is that he says the annual reports for the years 2011 to 2013 are "not yet available".
This is difficult to understand. If accounts are available, why not the annual reports?
The inability to pay creditors on a timely basis has resulted in the restriction of credit terms from some of the hospital's suppliers.
The management of UHWI is optimistic in holding the belief that "the Government of Jamaica views the hospital as a very critical institution in the country and will provide the necessary funding for it to remain in operation".
The financial treatment meted out to the hospital so far hardly reflects this view.
The University Hospital is in an impossible position. It is ordered by governments to refuse treatment to no one. And at the same time, politicians hold out for free medical treatment so patient charges are low and there is no way of enforcing collections.
Jamaica cannot afford to subsidise medical treatment, or education, to the level now practised. The staff and boards of every hospital in Jamaica are doing their best to keep facilities at the optimal level within the most harsh financial constraints.
There must come a breaking point in spite of these valiant efforts. The Caribbean governments now contribute $14 million per day to keep this hospital open.
Chairman Ryland Campbell and the other 15 ladies and gentlemen that comprise the board need to start speaking out to avoid the imminent collapse of this fine institution.
It must be apparent that the current strategy of low patient charges, declining government subsidies and the apparent misuse of hospital facilities for private work by university doctors is not sustainable.
It would be useful if the chairman/board brings a plan of action to save the hospital to public attention.
This column expects that similar grave issues exist and threaten the very continuance of other hospitals in Jamaica, whose finances we hope to review in due course.
The management of all these hospitals are placed in an impossible position. They are required to keep the hospitals open and functional without adequate grants - all against a background of politicians from both parties who are terrified of the political consequences of telling the country that free education and free medical attention is not possible on the current tax base.
When will our political leaders come clean with the public?
Alternatively, when will public opinion demand that logic is applied to public finances.
On a side note, UHWI maintains a valuable website. View it for valuable information on chikungunya and Ebola.
The Ministry of Tourism and Entertainment - run by Minister Wykeham McNeill and Permanent Secretary Jennifer A. Griffith - appears not to be concerned about accountability.
The ministry has the responsibility of promoting Jamaica but has a very bad record of getting its subsidiary companies to provide accounts. Here are some examples:
n Milk River Hotel and Spa - Chairman Dr Guyan Arscott: Last accounts 2002-03;
n Jamaica Vacations - Chairman Angella Bennett: Last accounts 2004-05;
n Bath Fountain and Spa - Chairman Don Wint: Last accounts 2006-07;
n Devon House - Chairman Doreen Frankson: Last accounts 2008-09;
n Jamaica Tourist Board - Chairman Dennis Morrison: Last accounts 2012;
n Tourism Enhancement Fund - Chairman Noel Sloley: Last accounts 2012-13.
This state of affairs is entirely unsatisfactory.
The ministry has supplied information, which indicates they are trying to correct matters. A number of the older accounts were submitted to Parliament at the end of September this year.
This column reviews the audited and in-house accounts and reports of companies and entities owned or influenced by Government.
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Minister: Dr Fenton Ferguson
Senior Executive Officer: Dr Cecil White
Chairman: Ryland Campbell
Other Directors: Bertram Anderson, Professor John Lindo, Dr Carl Bruce, Lyttleton Shirley, Desmond Munroe, Dr Winston De La Haye, Dr Blossom Anglin-Brown, Professor Horace Fletcher, Dr Kevin Harvey, Herman McDaniel, Owen McKnight, Dr Trevor McCartney, Professor Patsy Lewis, Professor Archibald McDonald, and Archibald Campbell.
Last available accounts: July 31, 2013.