Was Lamb Foggo UCC making a surplus or loss? Govt and PLP disagree
Both Government and the Bermuda Hospitals Board have dismissed Opposition claims that the Lamb Foggo Urgent Care Centre has been making a surplus in recent months.
And Health Minister Patricia Gordon-Pamplin also claimed that the Opposition neglected to fund the facility adequately after ordering it to be built — despite being advised by the BHB that top-up grants from Government were needed to make it financially sustainable.
At a press conference yesterday Shadow Health Minister Zane DeSilva refuted BHB claims that the facility had to close because it was draining funds.
Although the facility lost more than $700,000 in its first three years since opening in 2009, Mr DeSilva pointed out that the centre had a surplus of more than $100,000 in 2012/2013 and was in profit to the tune of $95,000 in the first four months of this year.
“That is correct — as we have said in the past, Lamb Foggo is operating at a profit,” Mr DeSilva said.
That view was maintained by Progressive Labour Party deputy leader Derrick Burgess, who last night said: “Lamb Foggo is operating at a surplus and there is no reason to close this facility.”
But Mrs Gordon-Pamplin pointed out that the figures for last year and this year were from unaudited accounts, and that, once additional centralised charges for the centre had been “appended”, its balance sheet would likely fall into the red.
The BHB last night supported that position.
“As was noted in the Executive Summary Business Case, which was released to the public on 31 October 2013, a small surplus of about $100,000 was made in 2013/14,” a BHB spokesman said.
“Unfortunately, as noted in the report, centralised costs of running the facility were expected to wipe this surplus out. Centralised costs include insurance and covering staff sick leave and vacation, and daily scheduling and management of the facility, and were not included. The small surplus seen year to date in this fiscal year would also be wiped out by these centralised costs.
“The average loss per year of $250,000 takes into accounts losses of over $300,000 in the two previous years. However, as none of these figures factored in the centralised costs, this is an underestimate. The final loss figure will be larger.”
Mrs Gordon-Pamplin also pointed out that, when the facility was first put forward by the PLP Government in 2007, a BHB business plan predicted the facility would need a cash injection of almost $1 million each year to break even.
“From the commencement of operation [in 2009], not a dime was put in, so when you come four years down the road, you find that there's no money to help the thing keep going,” she said.
“I can tell you that if the money had been put in according to the original business plan we would be having a different discussion now.”
According to Mrs Gordon-Pamplin, the BHB concluded that, unless the top up grant from Government was paid, “the facility was not financially sustainable and ought not to have been opened in the first place”.
“Those were the considering factors that the BHB put in place at the time,” she said.
“Notwithstanding that the decisions and the numbers didn't work, the government of the day chose to build it.”
Premier Craig Cannonier said that the initial operating plan “was never going to work”, adding that it would have been “prudent” if the former administration “had looked at these situations in prior times so that we aren't in the position that we find ourselves in today”.
A BHB spokesman confirmed that the former Government never provided any additional funding, and the decision to shut down the facility had been part of a wider campaign to drive down costs.
“A grant for the UCC was never provided, and BHB essentially absorbed the loss each year,” the spokesman said.
“However, it should be stressed that funding for the UCC is only one small piece of BHB funding and simply covering the shortfall for this one service, ignores the major financial and clinical issues BHB is addressing. We are absorbing the loss of about $14 million for our CCU service which is no longer funded by Government, revenue caps limit our ability to raise funds, we have had no fee rise this year, and lower than inflation in previous years, and not one percent contribution towards the hospital project this year.”
Mr DeSilva had earlier suggested a number of ways in which the facility could increase its revenue, adding: “I never denied that we didn't have financial challenges.”
But when asked why the former PLP administration had never introduced any of those plans when in office, he replied: “Had we won the election, those were some of the things that were on the agenda. Lamb Foggo was definitely on the agenda, as were many things at the hospital.”
Yesterday The Royal Gazette e-mailed the Progressive Labour Party asking why it never provided any top-up grants while the facility was making a loss. No response was received by press time last night.