Commonwealth Healthcare Corp. chief executive officer Juan N. Babauta stressed yesterday that the Commonwealth Health Center needs to make “very fundamental” changes, including letting go of the “culture of being subsidized.”
Speaking at the Rotary Club of Saipan membership meeting yesterday, Babauta pointed out that there is an “ingrained culture” of being at work but without productivity among staffers at the island’s lone hospital.
“Well, that’s the culture that has been ingrained in the last 30 years and that culture needs to change,” Babauta told Rotarians and guests at the meeting held at the Giovanni’s Restaurant of Hyatt Regency.
Babauta warned that if this culture is perpetuated, “we’re going to fail.”
“Under this new management, we must get rid of the status quo in order for us to be on the path of success,” added Babauta.
He disclosed that he has never been busier compared to his previous jobs, including that of being a governor, since assuming the CEO post of the newly established healthcare corporation in October.
“It’s dynamic, it’s ever-changing, there’s a lot of issues involved every day...I have to deal with them directly, I have to make things happen and, hopefully, we can improve the delivery of health services here in the CNMI,” he said.
Babauta noted the diversity of the corporation, with the various programs it is engaged in. One of its major components is the CHC, which he described as 24/7 operation that is “top-heavy,” meaning it spends more on salary expenses.
The hospital’s budget, said Babauta, has seen a “dramatic reduction” in its annual budget, previously receiving around $43 million five or six years ago to just $5 million this fiscal year.
A big bulk of its budget—between 80 to 85 percent—is allotted to fixed costs, which include personnel salaries and fringe benefits. The remaining 15 percent, said Babauta, goes to variable cost, which covers hospital supplies and other operational needs.
Babauta disclosed that they collect between $400,000 to $500,000 a month, which is smaller than the biweekly payroll of $800,000.
“You can see immediately that there is an imbalance,” he said.
Babauta vowed to implement changes and cost-cutting measures at the hospital such as promoting accountability in supplies and equipment. For example, he said, many discharged patients sometimes keep wheelchairs and other materials that should remain at the hospital after the patients check out.
He noted that doctors, who have the discretion to tell patients how long they can stay at the hospital, should also apply “due diligence” to avoid unnecessary longer stays.
“We have to be mindful of the expense and revenue side of things because we’re no longer connected to the umbilical cord of the government,” said Babauta, adding that all physicians, nurses, and the rest of the staff should be engaged in these “cost-containment” efforts.
Babauta also underscored the need to improve the hospital’s collections and billing, which he said could “make or break” it. He said about 50 percent of services delivered to patients are not being charged.
“There is a high percentage of services in the hospital that have not been charged ever since we built the hospital,” said Babauta.
He said the lack of data and statistics poses a “great challenge.”
“The public health data and statistics are very weak, indicators are weak,” he said, adding that availability of these figures can help the corporation increase its productivity level.