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Guam hospital patient numbers drop 29%; $106.3M uncollectible

HAGÅTÑA (The Guam Daily Post) — Government-run Guam Memorial Hospital’s patient numbers decreased by 29 percent since the opening of competitor Guam Regional Medical City in 2015, states an audit report released by the Guam Office of Public Accountability on Monday.

GMH’s total patient count decreased by 14,000 from 46,000 in the 2015 budget year to 32,000 in fiscal year 2018.

The reduced number of patients adds to the government hospital’s continuing financial challenges stemming from patients who couldn’t pay and health insurance companies that don’t fully pay for all of GMH’s billings. GMH is mandated to accept patients regardless of their ability to pay.

Health insurance companies were billed $44.9 million worth of services or 29 percent of the hospital’s total billings in fiscal 2018, but GMH collected only $32.3 million or 72 percent, the audit found. Independent auditors Deloitte & Touche LLP conducted the audit.

On average, GMH collected only 72 cents for every $1 billed to third-party payers.

Patients who were underinsured or lacked health insurance coverage racked up 18 percent or $28 million of the hospital’s total billings in fiscal 2018, but GMH collected only $7.3 million, according to the office of Public Auditor Benjamin Cruz. An average of the last five years indicates that GMHA collected only 39 cents for every $1 billed to self-pay patients.

The entrance to Guam Memorial Hospital in Tamuning is shown on March 26, 2019.  The Guam Daily Post file photoThe entrance to Guam Memorial Hospital in Tamuning is shown on March 26, 2019. The Guam Daily Post file photo

GMH does have an arrangement for the garnishment of tax refunds for patients who owe the government hospital payment for services, but it hasn’t been enough. GMHA collected $1.5 million in fiscal 2018 from tax refund garnishments.

In fiscal 2018, GMHA’s operating expenses exceeded its operating revenues by $33.3 million resulting in a negative cash flow of $19 million.

And $106.3 million of patient accounts receivable that had accumulated over the years has been determined uncollectible.

Over the past eight years, $26 million worth of services are provided to patients who don’t have health insurance or whose insurance doesn’t cover all of the services provided. In each of those years, an average of $16 million is written off as a “provision for bad debt” because patients have been unable to pay.

Although GMH has been increasing its rates by 5 percent every year since 2015, its rates are still outdated because most of them were established in the early 1990s, the OPA stated. Legislative approval is required for any fee increase that exceeds the 5 percent threshold.

GMH did decrease its operating expenses by $8.6 million, mainly because of decreases in the personnel costs of professional support and fiscal services; retiree health care costs and other pension benefits; and depreciation.