Its first year managing the Tinian and Rota health centers was such a financial disaster that the Commonwealth Health Corp. is now thinking of returning the facilities back to the control of their local governments.
Corporation CEO Juan N. Babauta and chief operating officer Esther Muña disclosed during their meeting with Guam Gov. Eddie Calvo Friday that operating the two satellite health centers has resulted in about a $3-million loss for the corporation.
Babauta disclosed that the two centers' expenses were in excess of $3 million in the last 12 months, while generating only a combined $300,000 last fiscal year.
Prior to the corporation's takeover in October 2011, both the management and operation of the Rota and Tinian health centers were handled by their own municipalities. This changed following the enactment of Public Law 16-51, which created the healthcare corporation, the body that now runs the two centers and the Commonwealth Health Center.
Muña said the two centers actually charge patients a “very low” rate but, whether the fees are increased on not, she said the corporation will be unable to break even if it continues to operate the two centers.
Because of the added burden these centers have on an already challenged corporation, Babauta bared the corporation's plan to turn over the two centers' operation to their respective mayor's office.
“CHC has to generate enough to cover that $3 million cost. We're underwriting Tinian and Rota centers, which makes it tougher for us [to survive]. Now we're looking at giving back management of the Tinian and Rota health centers to the government,” said Babauta.
In order to make this happen, however, the existing law that created the corporation must be amended.
Babauta also disclosed that the Rota and Tinian health centers were never included in the corporation's cost reports and are also not included in the Medicare reimbursement.
Last week, Babauta named William Cing permanent resident director for the Tinian Health Center. A permanent Rota resident director will also be named soon. Right now, Sydie Taisacan is doing the job in an acting capacity, replacing Edward Maratita.
Unlike the Rota Health Center, the Tinian Health Center has been operating without a permanent physician for several months now-considered the center's biggest challenge. To cover the center's needs, the corporation rotates CHC doctors to Tinian and signed a special contract with a locum.
Other measures that have also been identified to keep CHC open is a continued reduction-in-force to reduce “top heavy” personnel. The corporation is down to around 400 employees from about 600 in 2011.
Babauta said that overtime pay will also be reduced, while accelerating the billing and collection process for private insurance, self-pay, Medicare and Medicaid, and the adoption of a new fee schedule.