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SCH facing budget shortfall

June 30, 2011

SOUTH KINGSTOWN – Although the state General Assembly provided an additional $500,000 to South County Hospital to help cover the costs of services for people who do not have insurance or are unable to pay, the hospital still faces a significant budget shortfall.

President and CEO of the hospital Louis Giancola stated that the hospital’s net payment for the next year will be $1.9 million or $940,000 more than the previous year.

During a nine hour session that stretched from the Friday night to about 2 a.m. Saturday morning, the House passed a $7.7 billion budget that added new items to the state sales tax like computer software, eliminated state work’s longevity increases and added a 2012 vote on whether to make Twin Rivers a full fledged casino.

As part of that budget, South County Hospital and Westerly Hospital were each funded $500,000. Before the budget was approved by the House, South County Hospital was expecting its net payment to increase from $950,000 to $2.4 million, a $1.4 million increase.

Net payments are what the hospitals pay in taxes.

Hoping to cut that number in half, Giancola said he communicated directly with the Speaker of the House, Gordon Fox, the Chair of the House Finance Committee Helio Melo, and the South County delegation.
“We fully understand that we need to contribute. We’ve done that for the last 10 years. We just simply feel that almost $2.4 million is an unreasonable burden to place on a hospital of our size. I don’t know how we’ll absorb that,” Giancola said.

Rep. Teresa Tanzi (D-Dist. 34) of Narragansett and South Kingstown said only by repeated attempts the South County caucus was able to relieve some of the pressure faced by South County Hospital by attaining $500,000 in funding for it.

“Look at the hospitals that are most profitable and the most able to sustain cuts to them, but South County and Westerly are the net payers,” Tanzi said Monday afternoon. “I think its the best they could do but its shows that those who are struggling are asked to dig deeper.

Giancola said the hospital has already made many significant reductions over the years, including increasing health care co-shares for employees, no pay increases, changing from a pension to a 403(b) retirement plan and asking upper management to take a pay cut.
“It’ll be difficult to find a way to save $2.4 million,” Giancola said.
At Monday night’s town council meeting, council members expressed the need to contact local legislators to acquire more funding for South County Hospital.

“It looks like the hospital received another devastating blow. They’re an incredible economic engine. We need to find out from the General Assembly members what has happened here. This is a terrible blow to one of our great economic engines in South Kingstown,” councilman Jim O’Neill said.

Although the House did provide $500,000 in funding to the hospital, Giacola said it is still not enough.

“We have a $940,000 problem instead of a $1.4 million problem. It’s better than $1.4 million shortfall, but it’s still a significant shortfall,” Giancola said.

For more information pick up a copy of The Narragansett Times.

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