Guam Gov. Eddie Calvo and key officials of his administration visited the Commonwealth Health Center last Friday with Commonwealth Healthcare Corp. CEO Juan N. Babauta and chief operating officer Esther Muna giving them a tour of the facility.
Calvo, eager to know the condition and status of the CNMI's lone public hospital, received a formal briefing from Babauta and Muna in a two-hour meeting where the corporation disclosed that it has incurred a budget deficit of $7 million in fiscal year 2012.
Corporation COO Esther Muna revealed that the corporation expended approximately $25 million in operations last fiscal year, while total revenues and collection generated was approximately only $18 million resulting in an operating deficit of $7 million during the 12-month period.
The bulk of the revenues-about 60 percent-was generated from Medicare/Medicaid reimbursement, according to Muna.
Though the corporation has the unique situation of being a semi-autonomous agency, Calvo and Guam Memorial Hospital medical director Dr. Larry Lizama shared that GMH has also been incurring operating deficits which amounted to $12 million last fiscal year.
They shared that the Guam hospital has total revenue of $140 million of which 40 percent is from Medicare/Medicaid reimbursement and about 35 percent from insurance payments.
The Guam hospital, they said, was approved a $9-million budget. In terms of collection, Calvo and Lizama said GHM only collects 40 cents to a dollar it spends, which is almost the same level as the corporation's which is only able to collect 50 cents to a dollar. In the Guam hospital, Lizama also disclosed that about 65 percent of its paying clientele are those with insurance while about 25 percent are self-pay.
In inquiring about the immediate challenges of the corporation, Babauta informed the Guam governor's group the difficulty of not having a budget for the hospital's operations. Babauta said CHC's budget was reduced from $38 million in 2011 to only a seed money of $5 million in fiscal year 2012
Babauta described the operation and survival of the public hospital as a “miracle” at present as they merely depend on the corporation's revenues.
The CEO shared that due to financial constraints, the corporation eliminated certain agencies like Community Guidance Center and the hospital dental clinic, resulting in the laying off of more than 30 employees.
Babauta also explained the immediate jeopardy status slapped on the corporation by the Center for Medicare and Medicaid Services.
“We've been cited over the years for violations on our condition [of participation] since 2008 up to now. Finally, CMS came and said 'we have to do something.' Without Medicare help, we might shutdown this hospital. So to me, one of the best things that ever happened in this hospital is this immediate jeopardy status because we really need to meet certain standards and put in place policy and procedures,” said Babauta.
Meantime, GMH medical director Dr. Larry Lizama admitted Friday that the CNMI government owes the Guam hospital a significant amount of monies for its patient referrals. He expressed his desire to continue to “work together” with the CNMI in this aspect. He was made aware that off-island medical referral program is being taken cared of by the Governor's Office, and not by the corporation.