(Hagatna, Guam) The Legislature accomplished Phase I of the plan to make GMH better: Fund GMH. The Governor now has his eyes set on the final two phases.
MAKE GMH BETTER – TRANSLATION: Expand and improve its medical services and facilities, make it self sustaining for the first time, and eliminate the problem of non-payers by establishing universal health coverage for private sector workers who can’t afford insurance.
Speaker Won Pat convened the Legislature Wednesday, when Sens. Respicio and Rodriguez led the bipartisan passage of a $45 million bond authorization. Senators, one by one, expressed their support for GMH. Only two senators voted against the authorization: Sens. San Nicolas and Underwood. The other Democrats and Republicans said they eager to consider the administration’s Phase 2 of its plan: Build It Up ($125M CIP, technology, and modernization investment). While senators ultimately did not include the $125 million authorization into the financing package, Governor Calvo understands why and has directed the GMH team to get senators the information they’re asking for. (More on this point in a separate news release)
The following is from Governor Calvo. He speaks directly here to senators, the GMH team, and to critics of the GMH plan:
Thank you, senators. I asked them to make a tough decision that is unpopular with people who are wondering whether we’re just throwing money at a problem that’s going to come back. They realized they face this backlash in an election year, but they made the right decision anyway. I can’t say enough how good that makes me feel, as a citizen, that these senators set aside politics for the good of GMH.
I got good feedback as well about our GMH team, and I thank them as well. Peter John Camacho, Dr. Larry Lizama, and Benita Manglona did a great job working with senators during the session, along with Lester Carlson and Tina Garcia. Thank you so much, team.
The people and reporters demanding GMH accountability — my former spokesman included — are right to be angry that we have to go to the bond market to pay for GMH’s bills to vendors and bills that are accruing. No one should dismiss these concerns. People get angry at the absence of reason and accountability. So, I’d like to reason with critics by using facts and information that explain our accountability for this funding:
- ALWAYS CONSIDER: Think about the high price of gas and power. That is nothing compared to medical care. The fastest-growing prices globally are in the medical industry, especially pharmaceuticals. It is very expensive for GMH to provide medical care, and the costs go up all the time.
- DO YOU BELIEVE IN GMH’S MANDATE?: The hospital has a mandate to serve every patient who comes through its doors, regardless if they can pay. That is one of the deepest sources of comfort for every human being on this island. My plan to improve GMH and provide universal access to health coverage relies on a moral imperative or me: that medical care is a right. If you don’t agree with this mandate (even though it’s a federal mandate), or you don’t agree with this moral imperative, then it’s useless to read the rest of my reasons. Stop here, and let’s agree to disagree. I will respect your dissent.
- GMH DOESN’T WASTE MONEY: I’m sure pockets of waste and abuse exist there, as it would in any large company or organization. But, by and large, GMH spends money the way you would expect it to spend money. Last year, GMH spent a little over $100 million to operate. For every $100 it spent:
- $51.60 paid for and supported nurses and doctors
- $26 paid for the medicine labs, x-rays and other ancillary services
- $12.50 was spent to keep the hospital clean, running and up to standard, and to feed its patients
- $8.40 to collect and pay the bills (this includes the unique and complicated medical coding and billing systems)
- $3.50 to manage operations
- THIS IS A LIFE OR DEATH TYPE OF THING: Unlike any other operation of the government, funding GMH means the difference between life or death for people. GMH can’t keep up with the rising cost of medical care. The impact is real, with the head of the Pharmacy Department reporting to senators that their inventory of medicine is incomplete, creating problems for patients.
- GMH HAS IMPROVED COLLECTIONS: Since the arrival of GMH Chief Financial Officer Benita Manglona, GMH has:
- Increased billings by $15 million
- Improved collections by $5 million. Collectors are far more aggressive, even reporting debts to credit rating agencies
- Improved medical coding to 99.8% accuracy
- Average number of days that charges are held as receivables is the lowest it has ever been. This largely means GMH is collecting money faster than ever before
- GMH HAS CUT MORE THAN ANY OTHER AGENCY: The hospital has done more than its fair share of cutting. Last year, the hospital:
- Eliminated 150 positions
- Cut another $3 million in expenses
- Reduced emergency room costs by absorbing patient load into the urgent care center
- THE LEGISLATURE HAS FUNDED RECORD SUBSIDIES BY CUTTING FROM OTHER AGENCIES: GMH is classified as a semi-autonomous agency. This basically means there’s an expectation that it should run with minimal subsidy from the tax base. But the cost of providing care is so expensive and rises so quickly that we can’t keep up, even though the Legislature dedicated a record $20 million to GMH. That money was taken from other agencies in order to prioritize medical care for patients.
- IT IS STUPID TO FIRE 600 PEOPLE TO FIX THE GMH ANNUAL STRUCTURAL DEFICIT: It is very easy to say that we should cut more from the rest of GovGuam and dedicate those savings to GMH. But the numbers don’t add up, and the impact will be devastating. GMH is running at an annual deficit of $30M and growing, along with the cost of medical services globally. If we were to do what the PDN recklessly promotes, it would cost 600 people their jobs. Not only would that throw the pension fund into insolvency, the tax base would take a large hit and welfare will go up right away. These 600 people and their dependents won’t have insurance anymore, so they’ll either have Medicaid or no insurance at all. That directly translates into additional loss for GMH. All that will happen is the problem will get worse for GMH, our dependence on the federal government will rise, and 600 more families will be struggling. That is hardly what I’d call a solution. The pen is mightier than the sword. But, sometimes, it’s red.
- THE FEDERAL GOVERNMENT, NOT THE POOR, IS THE BIGGEST NON-PAYER: There’s a big misconception that the poor caused GMH’s financial shortfall. The most prolific non-payer is the federal government. That’s because the federal government refuses to update the base rate for reimbursing Guam for the cost of providing medical care to patients with Medicare. That Medicare rate has a direct effect on the rates for Medicaid and for MIP. The $47 million of underpayment from these three programs alone doesn’t just overshadow the $19 million from patients who can’t pay. If the federal government made good on its obligations, GMH would be the most profitable GovGuam agency, with the best balance sheet in the medical industry.
- WE DO HAVE A WAY OF PREVENTING THIS PROBLEM: Phases 2 and 3 will solve both the deficit caused by federal underfunding, and the problem of those who don’t have insurance. Phase 2 will build new facilities and modernize the existing structure. The new GMH will offer outpatient services, which within a year of opening, will begin covering the shortfall from unfunded federal mandates. Phase 3 is the universal health coverage package. Providing universal coverage will eliminate the self-pay, non-payer category altogether. Please note here that Sen. Rodriguez also has a plan for universal coverage. We thank him for being a solutions provider. I’m sure we can work on either or both of our solutions.
- WE DID CONSIDER EVERYTHING: The solutions in our plan came after months of studying GMH’s problems in depth. Professionals in the medical, financial, and public administration fields created these solutions. Everything Sen. San Nicolas proposed? Discussed at length. They are neither viable nor real solutions. He would have known that if he either helped to prepare the solutions, or called a public hearing. Talk is cheap.