The Great Guam Health Care Debate

September 11, 2017 Juvy Dichoso

Health care accounts for about one-sixth of the U.S. economy, and reform of the costly system continues to be one of our most contentious national debates. Republicans and Democrats in Washington continue to spar over the issue and remain divided on how to fix the complicated problems.


Guam faces similar significant challenges, with rising health-care costs as the most prominent concern. It’s not uncommon, for example, for Guamanians struck by serious health issues to turn to social media to plead for financial help or hold other fund-raisers to meet the overwhelming costs of medical treatment.


The Governor, whose powers under the Organic Act give him broad responsibility over Guam’s health care, has launched a new offensive. In fact, both the administration and the legislature have recently proposed bold solutions to some of the most pressing concerns. Governor Eddie Calvo and Health Committee Chairman Senator Dennis Rodriguez have sponsored separate legislation to address different aspects of local health care. The two even held a joint news conference recently to outline their respective priorities.


Helping out the hospital

The Governor is focused on revitalizing the aged, chronically under-funded Guam Memorial Hospital. As the island’s only civilian public hospital, GMH cannot turn anyone away who seeks care. So for decades, it has been hamstrung by a very high percentage of patients that don’t pay or can’t pay for services.


“We have to play with the cards that are dealt to us. And I will continue to focus with the federal government on areas that have made this such a burden on our hospital, but in the meantime we’ve got to solve this issue,” the Governor stated during the news conference.


Calvo is seeking higher Medicaid reimbursements from Washington and more support for hospital services provided to immigrants from the Federated States of Micronesia.


He proposes floating a $125-million bond for new medical equipment, and to rebuild the hospital’s dormant Z-wing, hoping to turn it into a moneymaking, outpatient service center.


To pay for the modernization project and to augment GMH’s yearly multi-million-dollar operating shortfall, the Governor wanted to increase business privilege taxes from 4 percent to 4.75 percent. The administration says this will raise an additional $46 million annually in tax revenue that will be set aside specifically for bond debt service and hospital operations.


GMH officials are lobbying for the passage of the Governor’s legislation, because as GMH Medical Director Dr. Larry Lizama says, “The modernization plan addresses the challenges of the delivery of health care that, unfortunately over the years, has led to a growing disability of our community and, most importantly, loss of lives.”


He adds, “This is a disservice to patients that is no longer acceptable.”


The Governor cites statistics that indicate that only 3 out of 10 patients billed by GMH are able to pay in full. The rest pay only a fraction of their bills, and many pay nothing at all. Officials point to the lack of health insurance as one of the key reasons that patients have trouble paying for hospital services.


But the Governor says the hospital still has a moral obligation to treat all patients, regardless of their ability to pay. Calvo and GMH officials have been meeting publicly and privately with lawmakers, physicians groups, business organizations, and other stakeholders to drum up support for his proposals. “The hospital is so critical to our society. We cannot allow it to fail. In fact we can’t even allow mediocrity; it has to be the best,” Calvo said during a recent presentation.



Health care for all
This lack of insurance is an issue that Health Chairman Rodriguez wants to tackle. He has been working on a plan he calls “Health Care Para Todu” (Health Care for All) that he says would make more coverage readily available. Rodriguez projects that under his plan, as many as 16 thousand more people will become insured.


There are two provisions in particular in the bill that he introduced that he believes will make insurance more affordable to more people. Similar to former President Barack Obama’s Affordable Care Act, Rodriguez is proposing to make employee health insurance mandatory for all local businesses. In addition to the employer mandate, Rodriguez is also calling for a 4-percent increase in current health insurance premiums to further subsidize his program.


Rodriguez concedes that there will likely be push back from the business community because of the added costs of providing mandatory coverage to employees. But he says employers need to realize that they’re already paying for it. He argues that the entire community has been subsidizing the uninsured. “When the insurance companies raise their rates, when the hospital has to raise their rates, when the public health centers have to raise their rates. It’s all because there’s a population in our community that we service that doesn’t pay for the services that they receive.”


He continues, “We’re putting a pathway for them to be able to afford it with a combination of the employer, the employee, and the government sharing in the cost of funding that individual’s health insurance premium.”


Rodriguez says the costs to the new group of insured will be no more than 2 percent of their income. “It’s going to be something affordable. It’s going to give that person the dignity to know that they’ve also been able to contribute to their own health care,” he adds.


The Health Chairman believes that having coverage will encourage people to see doctors about their health issues sooner rather than later, when treatment is typically much less expensive. That in turn should further help to lower overall health care costs.


Frank Campillo, the administrator of Guam’s largest health insurer, Calvo’s SelectCare, believes the goals of “Health Care Para Todu” are good. “We support expansion of people being insured. That clearly will help the providers who have to serve individuals that are not insured or do not have insurance. That will help Guam Memorial Hospital. That could also possibly help the new hospital. So from the perspective of expanding the number of people that are insured, we support that very much,” he declares.


Rodriguez says the health insurance companies will have a direct hand in managing the program. “This expansion group we’re looking at, having that run through a managed care program, which would be done through any one or all four of the health insurance providers on island.”


He is also pushing for health saving accounts that will further drive down costs to the would-be insured. “With the establishment of an HSA, that amount is actually going to be way less than the 2 percent of their annual income.”


While he supports much of the plan’s concept, a sore point for Campillo is the 4-percent fee on premiums, which he maintains is unfair to current insurance plan members. “There are contributions from the employer and contributions from the employee, so we believe that taxing individuals that are paying for premiums is almost like penalizing the individuals that have been good in the community because whatever charges and taxes that are made to health insurance premiums, clearly these have to be passed on to the consumer,” he explains.


But Rodriguez says his plan includes safeguards to discourage insurers from raising premiums. “There’s a mechanism you put into place, rate reviews, medical loss ratio provisions that we’re looking at that we’re going to be able to institute when this 4 percent is assessed.”


In response, Campillo says, “We’re not opposed to medical loss ratios either. That was proposed in the Obamacare law. It depends on what the percentages of those medical loss ratios are. It all depends on what the amounts are, and one of the things that we would like to do is, clearly, we want to be participants of the process. And we are going to be dialoguing of course with the legislators in this process. The objective is to expand the pool—no question about it—but how we get there is the big question mark.” He is quick to add that Senator Rodriguez’s plan “starts an important dialogue on this social and ethical issue for our island’s residents. The challenge, of course, will be to find a financial mechanism that will make it fair, equitable, and sustainable to finance and subsidize the less fortunate of the society.”


Universal health care

Campillo is referring to universal healthcare, which has also been an over-arching issue in the national debate. “Spreading costs across a larger population has been a method to contain and reduce the health-care expenditures, as opposed to shifting them from one sector to another. Everyone must theoretically contribute to the system,” he says.


“Our island has for many years subsidized health care at the expense of the taxpayers and the government-administered civilian hospital that continues to be financially challenged due to the high number of non-paying or uninsured individuals,” Campillo adds.


According to his research, Hawaii implemented a near-universal health insurance program in 1974, and the State recently proposed legislation to offer universal long-term care for seniors that would address elderly care. He found that most developed nations today provide a form of universal coverage for their citizens, and a significant number of developing nations are reforming their health-care policies to expand coverage.


“Many of our neighbors such as Japan, Hong Kong, and Taiwan provide universal care, and even the Philippines implemented reforms to significantly expand health care to its people through the PhilHealth system. Improving health and providing access to affordable care has become both an ethical and social responsibility for developed economies and societies,” Campillo says.


“It is crucial to recognize that while the debate for funding of universal health care could become polarizing and heated, addressing the issue itself and providing care to everyone is clearly a goal that should be achieved in our island. Ignoring and pretending that we do not have a problem has only brought us a broken health-care system that may have compromised lives. I applaud Senator Rodriguez for bringing the debate to light, and I look forward to the day when having medical fundraisers will no longer be necessary for a family to provide the financial support for their health-care needs. Let us move the debate forward in 2017,” Campillo encourages.


That discussion is expected to take center stage at the Guam Congress building soon. Rodriguez’s bill to establish the “Health Care Para Todu” program and Calvo’s legislation to float a bond to modernize services and make the hospital more self-sufficient await legislative approval. The Governor believes his bill could be the answer to GMH’s long-standing problems, and the Senator likewise sees his plan as a big step forward in establishing a much more affordable and accessible health-care system here.


Rodriguez is hopeful that enough of his colleagues at the legislature will agree. “What we really have to do as a community is change our mindset. It’s going to be a win-win, I believe, for everyone. I’m just hoping they would take this, embrace it, and be a part of the solution moving forward.”

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