THE Commonwealth Healthcare Corp.’s ability to deliver quality medical services hinges on the CNMI’s economic condition, according to CHCC’s citizen-centric report.
CHCC said it had increased its revenue in fiscal years 2022 and 2023, but local economic and financial conditions still play a significant role in its ability to provide healthcare services.
According to the report, the CNMI government’s financial crisis “may lead to underfunding, low Medicaid reimbursement, lack of appropriations to CHCC and reduced capital availability.”
According to the CHCC report, the other economic factors affecting CNMI healthcare are:
1) The increasing costs of goods, services, transportation and tariffs, which could strain CHCC’s budget. Inflation might also discourage patients from seeking care, which will affect CHCC’s purchasing power.
2) Capped Medicaid adds to uncompensated care costs.
3) The high cost of living in the CNMI might hinder CHCC’s ability to offer attractive salaries.
4) Healthcare workforce shortages could lead to staff burnout, longer wait times, and increased cost.
5) Loss of Medicaid coverage for CNMI residents will strain CHCC’s cashflow and lead to poorer health outcomes.
According to its report, CHCC generated $116 million in gross revenue in 2023, including grants and contributions. CHCC earned $121.57 million in 2022, “the highest so far in the last four years.” CHCC earned $86 million in 2020, and $100.76 million 2021.
CHC said the net patient revenues make up 71% of total gross income for the year ended Sept. 30, 2023. Medicaid continues to be the major payor (37%) for health and medical services, as a significant portion of the islands’ population is covered by Medicaid. Medicare-paid made up 14% of the hospital revenue in 2023 while private payers or health insurance made up 19%, and self-pay, 2%.
CHCC said federal grants and contributions accounted for 19% of the corporation’s gross income; CNMI appropriations, 5%; and other services, 4%.
According to the report, the CNMI government’s appropriation included transfers for medical referral services or the Health Network Program, which amounted to $5.4 million, but the actual expenditures totaled $7 million.
In her presentation to the CHCC board last week, CHCC chief financial officer Perlita Santos noted that from 1999 to 2011, the then-Department of Public Health, which was under the executive branch, received an average of $39 million in annual appropriation from the government.
The department was re-organized into CHCC, an autonomous public corporation, which commenced operations in late 2011.
From 2012 to 2021, Santos said the allotments CHCC received from the government averaged $4.8 million. It dropped to $3.9 million in FY 2022 and then to $1.1 million in FY 2023. For FY 2024, the corporation requested $1.5 million but was appropriated $1.
During the CHCC board meeting, the chairman, Juan N. Babauta, said the one-dollar subsidy that the Legislature appropriated for CHCC is “utterly ridiculous, and totally nonsense.”
He said it would be unrealistic for legislators and members of the public to expect CHCC to deliver first-class services.
