Friday, April 19, 2019

Puerto Rico Healthcare System Still On Financial Tightrope

By on November 2, 2018

Editor’s note: The following originally appeared in the Nov. 1-7, 2018, issue of Caribbean Business.

Vital, the government of Puerto Rico’s new healthcare system for Mi Salud patients, government employees and Medicare Platino, is taking its first steps through a $4.8 billion allocation from the federal Bipartisan Budget Act. Ángela Ávila, executive director of the Health Insurance Administration (ASES by its Spanish acronym), warned that while the allocation funds 100 percent of the program, it is still a tight budget.

Ávila’s expressions were made during a presentation at the Puerto Rico Hospital Association Convention, during which local Secretary of State Luis Rivera Marín argued that the commonwealth government had fulfilled its end of the bargain by implementing the Medicare Fraud Control Unit (MFCU) and Medicaid Management Information System (MMIS). The next step, Rivera Marín said, is to achieve a “permanent solution” by having Congress approve parity for Medicaid and Medicare funding.

From the private sector, Pablo Almodóvar, a member of the Plan de Salud Menonita (PSM), argued there are still some questions about the economic impact on healthcare institutions and patients, including the future of Centro Médico in San Juan’s Río Piedras district.

“What is the definition of Centro Médico within Puerto Rico’s healthcare system? That institution, that we all know, and we all know of the challenges because it has to subsidize its operations,” Almodóvar said about the public hospital.

“I would like to urge ASES and Health Secretary [Rafael Rodríguez Mercado], whichever their roles are, from an investment point of view, about what is going to be done with Centro Médico, undoubtedly, it needs to be done jointly with the Puerto Rico Hospital Association because, anything that will be done there, if it’s really a strong financial investment, will have an impact in some ways on the hospitals in Puerto Rico,” he said. “We need to define the role of that institution, which is so important for this country, and what we really want from it, with the network of hospitals that exists in Puerto Rico. At the end of the day, what role do we want to give to Centro Médico?”

Almodóvar also highlighted that the ultimate impact of the risks for health insurance companies is still not fully defined and issues with insurers’ capitations create larger problems because they put hospitals and primary care centers at odds. The PSM executive argued that improving relationships between hospitals and primary care centers would require a new payment system in which primary care centers, also known as 330 Centers, would no longer be dependent on hospitals receiving a reduction in their allocations.

Stabilizing the system for now

“There is financing for 18 months and there is an opportunity. How far can we extend ourselves if we can stabilize the system?” the ASES executive director asked when explaining that Puerto Rico’s additional allocation for healthcare, received as part of the recovery package earlier in the year, would fund Vital up to September 2019 but only if the cost-control measures are maintained.

Ávila went on to argue that if people and institutions can successfully adapt to the changes—such as providing coverage under the government’s health insurance plan as one complete region, along with a per member, per month (PM/PM) fee that is not fixed but takes “levels of chronic [use] into account”—the Puerto Rico government could then stabilize the island’s healthcare system, which could be used as an argument to achieve Medicaid and Medicare parity.

“I would like to change the rate but that is not a reality. The reality is that a new fiscal plan was just approved,” Ávila said, arguing for the need to work with the fiscal control board.

On that topic, the secretary of State, administration of Gov. Ricardo Rosselló and fiscal control board are on the same page.

“Health is a topic the [fiscal control] board recognizes in the fiscal plan that needs to be reinforced. The frailty of the healthcare system, which we saw palpably manifested in the past year after Hurricane [Maria,] requires an investment,” Rivera Marín said. “We are aligned—the government of Puerto Rico, the private sector and the federal government—in that the island’s healthcare infrastructure needs attention.”

As part of improving local healthcare infrastructure, the local government implemented the MFCU and MMIS, which would gather information that could be used to prevent fraud, although Rivera Marín explained that the main purpose for implementing these systems was to improve the efficacy of services.

While these data systems are part of the Rosselló administration’s main tool to improve the system, Rivera Marín alluded to the fact that Puerto Rico’s per capita income is about half that of the U.S. states while the local cost of living is above the U.S. average. Another disparity, Rivera Marín mentioned, is that while Puerto Ricans pay $200 million toward the Health Insurance Tax (HIT), no portion of this tax is allocated to the island.


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