Despite Changes, Puerto Rico Healthcare System Faces Uphill Climb
Editor’s note: This report first appeared in the June 21-27 issue of Caribbean Business.
The issues that constantly arise about federal allocations for Puerto Rico’s healthcare system, combined with pressures from the Financial Oversight & Management Board to implement austerity measures, have led the commonwealth government to move forward with changes to the healthcare system.
Many changes to the government’s Mi Salud program are geared toward optimizing results, and not just by reducing the budget but by implementing methods that assist the government in tracking utilization and when funds could be used in a fraudulent manner. Other changes promote market competition, such as a reduction of regions competing for the Mi Salud healthcare contract.
However, some members of the healthcare industry worry the changes may not be implemented in a way that achieves desired results. Additionally, a more prevalent concern seems to be that regardless of the government’s changes, the healthcare system is not going to improve if Puerto Rico does not receive parity with U.S. states for Medicaid and Medicare funding.
Lemonade from lemons for too long
With a $3,500 per capita allocation, Puerto Rico’s Medicaid funding is about one-third of the $10,000 per capita allocation for each of the 50 states. The funding disparity for Medicaid and Medicare has been present since the beginning of the programs. However, in 2010, with the Affordable Care Act (ACA, known as Obamacare), Puerto Rico’s starting position appeared to be more favorable. Yet, as luck, court administrative decisions and congressional action would have it, Puerto Rico was not fully included in the ACA. Instead, the island received a block grant, which ran dry before its deadline.
A lifeline for Puerto Rico’s healthcare system came with a $4.8 billion allocation from the federal government as part of its Hurricane Maria recovery package included in the Bipartisan Budget Act.
For Jaime Plá Cortes, executive president of the Puerto Rico Hospital Association, the problem with the island’s healthcare funding—which Congress assigned under Obamacare, as well as in the hurricane’s aftermath—is not just parity. It is that the numbers seem arbitrary. “They [previously] gave us $5.6 billion. That number didn’t come about through logic; it came out of a determination [that Congress] made,” Plá said at the convention of the Asociación de Salud Primaria de P.R. Inc. (ASPPR, or the P.R. Primary Health Association). “We were angry that we couldn’t identify how [Congress] came up with that number. The $4.8 billion [figure] was not really identified, either. The numbers that [Congress] are giving us are not related to our reality.”
It is worth pointing out that Puerto Ricans pay the same payroll-tax rate, which goes toward funding Medicare, without receiving the same benefits as the individual 50 states. Furthermore, an industry expert explained that in the states, all four parts of Medicare are in an opt-out system; however, in Puerto Rico, Part B is an opt-in portion of the program, and members who want to participate must pay a fee for every year they did not choose this part. Such a fee is not existent in the 50 states because Medicare Part B, by default, is an opt-out system.
Plá, who has traveled to Washington, D.C., seeking equal healthcare treatment for the island, was emphatic when arguing for both the Hospital Association and the ASPPR to continue lobbying, “at an administrative and legislative” level, for improvements to Puerto Rico’s position within the Medicaid and Medicare systems.
The view of the Hospital Association executive president to continue having a presence in Washington is consistent with other ASPPR convention speakers. Roberto Pando, president of MCS Advantage and MCS Life Insurance Co., was also very emphatic about the level of disparity between Medicaid funding for the island and the U.S. states.
Pando explained that when addressing members of Congress or the Department of Health & Human Services (HHS), a common argument he receives is that because Puerto Rico has been able to work with the money that has been provided, it does not need additional funding.
The MCS Advantage president explained that one counterargument he presents is a study by the P.R. Statistics Institute that shows that while the island’s median income is lower than the U.S. average, the average cost of living in Puerto Rico is higher than the U.S. average.
Furthermore, U.S. Congress is aware that Puerto Rico is not at the same level as the States. In the 2016 report from the Congressional Research Service, “Puerto Rico & Healthcare Finance: Frequently Asked Questions,” Annie L. March states, “Three territories are supposed to abide by most of the same Medicaid requirements as the 50 states and the [District of Columbia]. However, it has been documented that these territories do not cover all federally mandated coverage groups or benefits.”
Puerto Rico, as one of the three territories, does not provide the required coverage and benefits. The report also explained that the poverty level for the island’s Medicaid program is lower than the federal poverty line.
For Pando, the importance of addressing the island’s public healthcare funding comes from a historical difference between the U.S. and Puerto Rico economies.
Pando argued that the changes and developments in the U.S. healthcare and insurance systems “emerge from a different private economy that operates in the United States, which influences the healthcare system. In Puerto Rico, it is totally different. In Puerto Rico, the public programs have been the ones that have spurred [the] changes.”
While the consensus from members of the healthcare sector is that Puerto Rico needs to implement drastic changes, many are worried that changes will not be properly made or won’t actually tackle the maladies that hinder patient services.
One feature of the new Mi Salud model is a switch from eight regions to one, which will cover Puerto Rico in its entirety, including the island-municipalities of Vieques and Culebra.
“Our beneficiaries are going to decide what entity is going to administer their benefits, recognizing that, at the end of the day, this selection is going to be circumscribed to the network of providers that each entity [insurance company] has the capacity to administer,” said Yolanda García at the ASPPR convention. García is the deputy executive secretary of the P.R. Health Insurance Administration.
To read the rest of this story, go to Caribbean Business ePaper.
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