Bad Debts, Increased Operating Expenses in Guam Hospital

Lucas Gilmore, “Big 4″ observer
January 12, 2011 /

Only 24 cents for every dollar owed by Guam Memorial Hospital (GMH) patients in 2010 have been going to the coffers of GMH, with the number of uninsured patients having climbed 28 percent worsened by the 33 percent rise in operating expenses, according to an audit conducted by Deloitte which was released by Guam’s Office of Public Accountability.

Deloitte’s audit found that 2010 saw a 263 percent rise in the collectibles of GHM to $21 million compounded by the more than $15 million in medical services that remain unpaid until now. Debts in patient care have already amounted to $139 million. The audit added that about 76 percent of the total debts, or $139 million, are not likely to be recovered by GMH, which Deloitte considered as bad debts.

The increase in the operating expenses of GMH has been fueled by its drive to recruit more nurses to gain accreditation, Deloitte said citing the management of GMH.

Recruitment of nurses has skyrocketed to 50.6 million from 34.5 million, a 47 percent increase.

Approximately 64 percent of GMH’s total operating expenses of $105.8 million could be broken down to the number of employees. In 2009, the hospital employed 948 personnel, but the number went up almost 11 percent in 2010 to 1,063.

GMH spokesman Connor Murphy said the hospital’s finance from January 2009 to October 2010 has been shaken by the passage of the Public Law 29-132 that assimilated three sources of fund. Murphy said that in the years prior to the passage of the bill, GMH has been receiving funds from three sources, MIP adjudicated claims fee, Medicaid adjudicated claims fee, and the Pharmaceutical Fund. Upon the passage of the law, GMH’s fund was curtailed by $17 million, Murphy said.

In addition to the increase in operating expenses, Deloitte also found that patient receivables, pharmaceutical inventory and procurement have weakened the hospital’s Report on Compliance and Internal Control.

 

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