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MCS CEO O’Drobinak: Puerto Rico must continue to tackle demographic changes, federal funding disparity

By on February 22, 2019

MCS CEO James O’Drobinak (CB/Jaime Rivera)

SAN JUAN – During the Puerto Rico Chamber of Commerce’s third annual conference Friday on the Puerto Rico Oversight, Management and Economic Stability Act (Promesa), there were several connecting topics throughout the various discussion panels, including the state of healthcare on the island.

One of the often-reiterated constants, from the morning keynote by James O’Drobinak, the CEO MCS, which offers health and life insurance and Medicare Advantage (MA) plans, to the speech delivered by economist José J. Villamil, of the Estudios Técnicos consulting firm, was the challenges involved in addressing the island’s recovery after the 2017 hurricane season in light of significant demographic changes.

The issue in Puerto Rico is not only that the population is shrinking, but also that it is becoming increasingly older, with the number of deaths surpassing births in 2017.

“Healthcare is a microcosm of Puerto Rico: The younger people are leaving; the older people are staying,” O’Drobinak said when explaining that the disproportional shift is affecting healthcare on the physicians’ side, as well as that of patients.

Last year’s hurricanes exacerbated outmigration, including that of younger doctors. The president of HMO plan provider MMM, Orlando González, said the majority of doctors on the island are more than 56 years old. González argued that this could mean that in only a few years, the lack of available doctors could worsen dramatically.

MMM President Orlando González (CB/Jaime Rivera)

As for the patients, the healthcare system is encountering a larger number who need more care.

The second uniting thread pertaining to the healthcare discussion at the third Promesa Conference was the lack of sufficient federal funding. At times in the past, stakeholders in the industry’s various areas have not seen eye-to-eye in their assessment of the issues.

However, MCS’s O’Drobinak suggested that it may no longer be the case. He found that dialog and consensus were reached because the industry has been able to agree on the facts, in large part because the situation is at a critical point.

“I see it as a function of Puerto Rico that everybody gets the opportunity to interact so often, and I think that Puerto Rico can get to a friendly dialog that the industry has sort off hatched it out,” O’Drobinak said. “The peak bad years were ’15, ’16 and ’17, and now the problem is such a pink elephant that you can’t deny it,” he assured. “Everybody’s been equally pained.”

The CEO has been vocal on the need for federal funds, especially for Medicare Advantage, given it helps services provided through Medicaid. MA reimburses only 57 percent of the average federal reimbursement rate in other states to pay for doctors and medical providers.

The U.S. Congress has delayed its consideration of H.R. 813, the “Puerto Rico Integrity in Medicare Advantage Act” (Prima), which was introduced by Resident Commissioner Jenniffer González Colón and has received bi-partisan support. It seeks to establish a 0.70 Average Geographic Adjustment floor for each county in the United States.

Defending Puerto Rico’s congresswoman in trying to address the disparity between the island and stateside jurisdictions with regard to healthcare funding, O’Drobinak lauded her energy but argued that “she doesn’t have capital to barter with” because Puerto Rico has no voting representation in Congress.

Under current law, MA plans must spend a minimum of 85 percent of payments received on provider payments or additional benefits. Beyond the current federal requirements, the bill requires MA plans to spend at least half of any incremental funding received on provider payments.

While the focus of O’Drobinak and the other healthcare panelists in the forum was on the need for more federal funding, it was also argued that the fiscal board should look at Puerto Rico’s healthcare system from a different perspective.

“There are still a lot of budget cuts built into the fiscal plan, and at some point in time, you can’t be told as a provider that you can be better, faster and cheaper. You just need to be told you’re going to win. So if they stick to the robotic, draconian numbers game, then as Orlando [González] said, you have to re-scope the benefits or put fewer people in the program because if the only way you’re looking at it coldly, about a number, then you can get there, but you have to be equally cold. I don’t know that that’s the right way to do it,” said O’Drobinak, who is a self-described fan of Promesa and the chairman of the fiscal board it established, José Carrión.

(CB/Jaime Rivera)

O’Drobinak was referring to remark made in the “Systematic Risk of Healthcare” panel, where MMM’s president said the next budget cut of $800 million projected in the fiscal plan would lead to either having to reduce coverage or decreasing the number of patients under Medicaid.

In the end, O’Drobinak maintained that Puerto Rico’s healthcare industry needs to continue its fight to obtain fairer federal funding.

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