Financial management and planning at the Bermuda Hospitals Board leave much to be desired, according to the parliamentary committee looking into public accounts.

In its latest report tabled Friday in Parliament, the Public Accounts Committee noted that the BHB was owed some $11 million, did not have an effective costing and billing system and had sustained a loss of $250,000 because of poor planning when they purchased new laundry equipment which was never shipped to Bermuda and had to be sold in the US.

?The former executive director admitted that due to poor planning and coordination, the equipment had been purchased before the physical plant and other ancillaries needed for the installation and operation of the laundry were in place,? the report notes.

?The laundry equipment was kept in storage abroad, but unfortunately deteriorated, and eventually the BHB sold the equipment to a US buyer for about $100,000, thereby sustaining a $250,000 loss.?

The PAC also said that it was concerned about slow progress being made in reconciling patient treatment records with financial records ?to ensure that the Hospital is properly accounting and charging for the services it provides to patients?.

It said plans to implement a new costing and billing system had been in progress since 2002, but not yet realised.

?We were told that a new fee structure, which would more closely follow actual costs, was being developed. To accomplish this, the Ministry of Health set up a reimbursement task force in 2001...

?The executive director indicated that the task force was expected to report its findings by April 2003. She anticipated that health care fees would probably have to be raised as a result of the task force findings,? the report stated.

?More recently in January 2004, your committee was told by the new chief executive officer that the task force findings had been delayed and that in 2003 the BHB had hired Ernst and Young to conduct a review of the patient treatment costing and billing systems.

?She indicated that the BHB plans to install a new ?Charge Master? billing system and she hoped that by October 2004 the Hospital would at least be able to collect accurate data on patient treatment and prescription costs to provide the basis for a better billing system.?

The PAC noted that ICU costs run up to $5,000 a day but are charged out at the same rate as general ward fees ($768 a day).

?Your committee continues to be gravely concerned at the inordinate amount of time that the Ministry and BHB have taken to implement a more effective costing and billing system and the resulting impact this is having on the Hospital?s financial situation. Your committee recommends that the BHB and the Ministry work together to complete this process as quickly as possible.?

The report went on to note that debts due to the Hospital were not being paid off fast enough despite the fact that the BHB had a staff of 24 in its finance department and that some accounting staff had been exclusively assigned to debt collection duty.

?We were told that the BHB had adopted a more aggressive approach to the management of its receivables and that four outside debt collection agents had been employed to supplement the BHB?s own four internal debt collection clerks,? the report continued.

?The controller reported approximately $11 million in outstanding receivables as of the end of December 2003. He noted that about $1.1 million in outstanding receivables had been written off.?

Close to $3 million of the debt was owed by the uninsured and the indigent, third party insurance coverage accounted for $6 million of the receivables and Government insurance programmes owed the rest, the report noted.

?Your committee noted that the BHB is obligated to provide medical attention to anyone coming into the Hospital and that many patients, who would qualify for the Government subsidy for the indigent, do not apply for it.

?In addition the problem was exacerbated by a number of employers who are not providing insurance coverage for their employees as well as many elderly persons who could qualify for HIP but do not take advantage of it.?

It added that the BHB had not effectively addressed matters raised by the Canadian Council which gave the Hospital a conditional three-year accreditation.

?Your committee is concerned that the BHB did not respond within the time frame required by the Canadian Council, thus potentially jeopardising the Hospital?s accreditation status.

?The CEO indicated that, in future, more care would be taken to adequately monitor and address accreditation issues.?