Wish List: University Hospital CEO seeks top-flight CFO for turnaround miracle
Medium term, the government is aiming to significantly update this, the Caribbean's premium medical hospital and teaching school. At last report, the price tag on the project was $4.9 billion.
In the works are plans for a new 6-storey, 120,000 square feet medical facility, which will accommodate an additional 40 medical and surgical beds, improvements to outpatient or ambulatory surgery, lecture rooms, conference rooms, and upgrading of the cardiology hybrid interventional surgery room and the neonatal intensive care and administrative departments.
However, the institution is currently struggling to become solvent and move into profitability. Total current assets of the UHWI are valued at $ 8.8 billion as at November 2024. Non-current assets stood at $4.2 billion and total liabilities were $19.6 billion.
CEO Mitchell commented, “The current ratio recorded for the period is indicative of the Hospital’s insolvency. That is the inability to cover our current liabilities with our current assets.”
In the works are plans for a new 6-storey, 120,000 square feet medical facility, which will accommodate an additional 40 medical and surgical beds, improvements to outpatient or ambulatory surgery, lecture rooms, conference rooms, and upgrading of the cardiology hybrid interventional surgery room and the neonatal intensive care and administrative departments.
However, the institution is currently struggling to become solvent and move into profitability. Total current assets of the UHWI are valued at $ 8.8 billion as at November 2024. Non-current assets stood at $4.2 billion and total liabilities were $19.6 billion.
CEO Mitchell commented, “The current ratio recorded for the period is indicative of the Hospital’s insolvency. That is the inability to cover our current liabilities with our current assets.”
In June 2024 Fitzgerald Mitchell was appointed Chief Executive Officer of the University Hospital of the West Indies (UHWI) after 27 years with the institution, having served in various management positions. He was the acting CEO for the prior two years.
The UHWI is now a partially private entity, supported by fees billed to patients as well as government provisions. Patient collections have been improving month on month, but not enough.
Between January and November patient fee billing increased by 4.5 per cent above the similar period in 2023. Collections itself also climbed 7.5 per cent in the period.
A snapshot of is provided by results for November 2024 when operating income for the period stood at $1.5 billion, an increase from the previous month of $1.48 billion, a $13.6M or 0.9 per cent increase.
However, operating expenditure for November recorded a 0.7 per cent or $12.4 million reduction over the previous month. $1.7 billion was recorded for the month of November.
A net loss of $202.8 million was therefore recorded for the month. The running deficit aside, some $11 billion is owed as statutory payments for PAYE, NIS, Education Tax and NHT covering the period January 2014 to December 2024.
The Hospital has been paying down this debt, but it continues to multiply as time goes by. Mitchell, looking at what is needed for a turnaround going into 2025 observes that to address and achieve fiscal stability, a well-structured, multi-faceted approach is required.
Key strategies will begin with assessment and Immediate stabilization. Under this phase will be cash flow analysis: conducting a thorough review of all cash inflows and outflows to identify gaps and prioritize essential expenditures.
Immediate liquidity Injection is also required: securing equity infusions, or bridge financing to cover immediate obligations. “This will be difficult but not impossible,” Mitchell comments.
Phase one also involves debt restructuring: Negotiating with creditors to extend repayment terms, reduce interest rates, or write off portions of debt. Mitchell is hoping to get rid of some debt owed to the government by this means.
The Hospital is also considering debt-to-equity swaps if feasible. Mitchell states, “We have written the GOJ asking for write off of our statutory the ones that have impact on our staff.”
The finance team is also considering emergency cost cuts: halting non-essential spending and renegotiating supplier contracts to reduce costs. “This is being done every day, “the CEO outlined.
Also, the UHWI is considering revenue enhancement measures including revenue optimization: focusing on high-margin products or services and eliminating low-performing offerings.
The UHWI is also considering changes to its pricing strategy: reassessing pricing models to ensure competitiveness and profitability. Mitchell states that this is being done and has shown marginal increases since December 1, 2024.
The Institution is additionally looking at market expansion: exploring new customer segments or geographical markets for potential growth and also bringing in a business manager to drive revenue.
Restructuring
The UHWI is also considering operational restructuring: including process optimization, implementing lean management principles to eliminate waste and improve efficiency. “We have begun to do this,” the CEO says.
Restructuring will cover workforce management as well: reassessing staffing levels, restructuring roles, and considering voluntary separation packages.
Technology integration will also fall under restructuring: Adopting technology to streamline operations and reduce manual tasks.
For the UHWI, the fourth area of focus will be asset utilization, which will involve non-core asset sales, selling underutilized or non-essential assets to generate cash.
The Institution, meanwhile, aims to leverage existing assets: maximizing the use of existing assets to improve revenue streams (e.g., renting idle properties, repurposing equipment).
Mitchell says the long-term financial strategy will be backed by budget discipline: creating a realistic budget with strict adherence to reduce over-expenditure.
Long term also the hospital will seek new Investments: “Attracting new investors by demonstrating a credible turnaround plan” the CEO outlined.
Meanwhile new cost structures will be created for the UHWI, moving towards variable cost structures to ensure scalability with revenue fluctuations.
The UHWI will also pursue stakeholder engagement to keep creditors, investors, and employees informed about the turnaround plan and also gain government or institutional support.
Mitchell outlined that employee buy-in is important: engaging staff to align them with cost-cutting and productivity initiatives.
Photo Caption: CEO of the University Hospital of the West Indies Fitzgerald Mitchell.
The UHWI is now a partially private entity, supported by fees billed to patients as well as government provisions. Patient collections have been improving month on month, but not enough.
Between January and November patient fee billing increased by 4.5 per cent above the similar period in 2023. Collections itself also climbed 7.5 per cent in the period.
A snapshot of is provided by results for November 2024 when operating income for the period stood at $1.5 billion, an increase from the previous month of $1.48 billion, a $13.6M or 0.9 per cent increase.
However, operating expenditure for November recorded a 0.7 per cent or $12.4 million reduction over the previous month. $1.7 billion was recorded for the month of November.
A net loss of $202.8 million was therefore recorded for the month. The running deficit aside, some $11 billion is owed as statutory payments for PAYE, NIS, Education Tax and NHT covering the period January 2014 to December 2024.
The Hospital has been paying down this debt, but it continues to multiply as time goes by. Mitchell, looking at what is needed for a turnaround going into 2025 observes that to address and achieve fiscal stability, a well-structured, multi-faceted approach is required.
Key strategies will begin with assessment and Immediate stabilization. Under this phase will be cash flow analysis: conducting a thorough review of all cash inflows and outflows to identify gaps and prioritize essential expenditures.
Immediate liquidity Injection is also required: securing equity infusions, or bridge financing to cover immediate obligations. “This will be difficult but not impossible,” Mitchell comments.
Phase one also involves debt restructuring: Negotiating with creditors to extend repayment terms, reduce interest rates, or write off portions of debt. Mitchell is hoping to get rid of some debt owed to the government by this means.
The Hospital is also considering debt-to-equity swaps if feasible. Mitchell states, “We have written the GOJ asking for write off of our statutory the ones that have impact on our staff.”
The finance team is also considering emergency cost cuts: halting non-essential spending and renegotiating supplier contracts to reduce costs. “This is being done every day, “the CEO outlined.
Also, the UHWI is considering revenue enhancement measures including revenue optimization: focusing on high-margin products or services and eliminating low-performing offerings.
The UHWI is also considering changes to its pricing strategy: reassessing pricing models to ensure competitiveness and profitability. Mitchell states that this is being done and has shown marginal increases since December 1, 2024.
The Institution is additionally looking at market expansion: exploring new customer segments or geographical markets for potential growth and also bringing in a business manager to drive revenue.
Restructuring
The UHWI is also considering operational restructuring: including process optimization, implementing lean management principles to eliminate waste and improve efficiency. “We have begun to do this,” the CEO says.
Restructuring will cover workforce management as well: reassessing staffing levels, restructuring roles, and considering voluntary separation packages.
Technology integration will also fall under restructuring: Adopting technology to streamline operations and reduce manual tasks.
For the UHWI, the fourth area of focus will be asset utilization, which will involve non-core asset sales, selling underutilized or non-essential assets to generate cash.
The Institution, meanwhile, aims to leverage existing assets: maximizing the use of existing assets to improve revenue streams (e.g., renting idle properties, repurposing equipment).
Mitchell says the long-term financial strategy will be backed by budget discipline: creating a realistic budget with strict adherence to reduce over-expenditure.
Long term also the hospital will seek new Investments: “Attracting new investors by demonstrating a credible turnaround plan” the CEO outlined.
Meanwhile new cost structures will be created for the UHWI, moving towards variable cost structures to ensure scalability with revenue fluctuations.
The UHWI will also pursue stakeholder engagement to keep creditors, investors, and employees informed about the turnaround plan and also gain government or institutional support.
Mitchell outlined that employee buy-in is important: engaging staff to align them with cost-cutting and productivity initiatives.
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