Senate to Fitial: No to delay in turning DPH into a corporation

Senate President Paul Manglona (Ind-Rota) told Gov. Benigno R. Fitial yesterday that the implementation of a law turning the Department of Public Health into a corporation cannot be delayed, and asked the governor to immediately appoint members of the corporation’s board of trustees.

The governor’s nomination of the new corporation’s board members needs the advice and consent of the Senate.

Fitial is expected to be back home today from Alaska where he spoke at a renewable energy fair.

Manglona’s letter to the governor came a few days after the House Ways and Means Committee said that extending by one-year the implementation of the law turning DPH into a corporation is one of the options being looked at to address DPH’s financial and operational issues.

Public Law 16-51 requires DPH to begin transitioning into the Healthcare Corp. on July 15, 2011 unless the date is extended by law.

However, July 15 came and went but the transition has not started and without an authorized extension of the transition date.

The Senate passed a bill moving the transition period to Oct. 1, 2011 to coincide with the start of fiscal year 2012.

But the House has yet to act on the Senate bill.

“The Senate supports the transition of DPH to the new Healthcare Corporation as mandated by Public Law 16-51,” Manglona said.

Four reasons not to delay

Manglona cited four reasons why the implementation of the transition cannot be delayed.

“First, current healthcare system under DPH is not effectively providing healthcare services as demanded by the people,” Manglona said, adding that DPH –which is under a state of emergency—needs autonomy and flexibility to develop and regulate a high quality, efficient, market-oriented public healthcare delivery system that is financially self-sufficient and independent from the CNMI government.

Second, the CNMI has to comply with the Obama Affordable Health Care Act, including the health insurance exchange by Jan. 1, 2014.

Third, DPH has uncontrollable expenses that cannot be cured with the present system.

Manglona said DPH continues to underwrite unfunded liabilities, including providing healthcare services to the indigent population that cannot afford to buy health insurance, overextending Medicaid services to residents, and providing end-stage renal disease treatment and services to Freely Associated States and other non-U.S. citizens.

He said non-U.S. citizen ESRD patients who are not qualified for Medicare and Medicaid cost the CNMI government some $1.2 million annually.

Fourth, DPH’s Commonwealth Health Center facility is nearly 30 years old and needs major repairs and renovation.

“As a public corporation, the Healthcare Corporation will be able to loan money, if necessary, to fund these upgrades and renovations in addition to many other necessities of DPH at this time,” Manglona told the governor.

Options

Rep. Ray Yumul (R-Saipan), who was one of the House members who met with DPH last week about the department’s budget and transitioning into a corporation, said there’s no final decision yet on extending the start of the transition period.

Ways and Means Committee chair Rep. Ray Basa (Cov-Saipan) said there are lots of things to consider, that’s why the panel is looking at amending the Senate bill to extend the conversion by one year, among other things.

House floor leader George Camacho (Ind-Saipan) said among the options being looked at to fund DPH is borrowing money from the Marianas Public Land Trust, seeking the assistance of the U.S. Department of the Interior, or applying for grants.

“Taking $20 million from the already reduced budget will be very difficult without having to go through drastic measures,” he said.

Basa’s Ways and Means Committee is concerned that DPH may not be ready to transition into a corporation.

The governor gave $5 million in seed money for DPH to transition into a corporation, but the committee said this amount is just not enough.

Moreover, the governor’s fiscal year 2012 budget submission of $102 million will have to be changed to still include DPH’s projected revenue collections and spending if DPH remains a full government agency. This also means that there will have to be further cuts to accommodate DPH’s operational and personnel expenses.

Health Secretary Joseph Kevin Villagomez, former governor Juan N. Babauta who is now one of the governor’s special advisors, and other health officials met with the House on Thursday.

Board member appointments

The Senate president also said the monumental task of transitioning DPH to a corporation requires times, expertise and money.

“However, the first step that must be taken, which does not cost much, is to appoint members of the Board of Trustees with the advice and consent of the Senate,” he said.

PL 16-51 requires the Board of Trustees to search and recommend a qualified person to the governor for appointment as the chief executive officer of the Healthcare Corp.

Manglona said the CEO selection may take some time so the sooner the Board of Trustees is constituted, the sooner they can begin the search for a CEO.

“The Senate stands ready to expedite the confirmation of the Healthcare Corporation Board of Trustees,” the Senate president added.