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Our Hearts Go Out To The People of Puerto Rico

Our Hearts Go Out To The People Of Puerto Rico

For many in the United States, Puerto Rico is a sunny destination point to fly in and out of on vacation. But today, Puerto Rico is literally in crisis.

While many Americans do not know much about this Caribbean island, or even its status as a territory (or commonwealth) of the United States, we at MedHOK follow Puerto Rico every day. We have a number of great health plan clients there and we know its lovely people, its culture, and the beautiful island from the North in San Juan to the South in Ponce. This blogger and his family are enamored with the at-least-two-centuries’ old tradition of carving religious articles called “Santos” in the Ponce region. A number of Santos statues line the shelves of our house.

As a Caribbean island, Puerto Rico is used to being battered by storms. The strong Puerto Rican character has allowed them to weather storms over the years with strength and fortitude. But this year, Puerto Rico has been especially impacted by nature’s wrath. We at MedHOK traded texts with our Puerto Rican health plan friends as Irma hit there, and later in Florida, and we were thankful that the impact of Irma was not worse in either location. But Irma did cause major damage in Puerto Rico, as much as $1 billion worth. Hundreds of thousands lost power, including critical healthcare facilities. Thousands were still in shelters after the storm. Showing the beautiful hearts of Puerto Ricans, even with the Irma damage and chaos, they welcomed refugees from other Caribbean islands who lost their homes because the devastation was even worse in those places.

And then came Maria!

Maria was the most powerful hurricane to hit Puerto Rico in over 80 years. It was a direct hit with winds of as much as 155 miles per hour and 15 inches of rain. Hundreds of thousands had to evacuate to safer parts of the island. The entire island lost power. The grid has been devastated and it could be months before power is fully restored. Many areas are without running water and in short supply of food, bottled water and gasoline for generators. The winds tore apart homes, businesses, hospitals, roads and bridges. Thousands of homes flooded and at last 10 deaths were reported (which unfortunately will likely rise). Flash flooding is a continued risk due to continuing rains. As of this writing, the Guajataca Dam is in imminent danger of breaching and could flood up to 70,000 people and their homes. Additional evacuations have taken place, but communications are cut off and many who are in danger may not be aware of the risk (85% of cell towers and all of the internet were impacted). If you have not already done so, look at aerial views of the devastation online. Like Houston, it is heart-wrenching. The true scope of the devastation is not yet known, but the cost of recovery from Maria will be in the tens of billions of dollars.

Any devastation is terrible, but why does this impact Puerto Rico more than Florida or Texas? First, Texas and Florida are big states and can better serve the areas devastated by hurricanes. In the case of Puerto Rico, literally the entire island was impacted and its infrastructure compromised to the greatest extent. Second, Puerto Rico is in the midst of an economic crisis. Businesses that brought great prosperity to the island over the past few decades have left as economic incentives dried up. The gross domestic product and private economy have shrunk. These conditions led to a migration of middle class and wealthier Puerto Ricans to the mainland United States for better opportunities. The population has dwindled year after year and poverty on the island has increased. A glaring statistic: average income in Puerto Rico has stagnated at about 35percent of the U.S. average; Mississippi, the poorest of American states, has average income of about two-thirds of the national average.

All this created a fiscal crisis on the island. Due to imminent default on various governmental bond obligations that amounted to over $70 billion, a federal oversight board was established to restructure the debt and bring the budget in line. But the dwindling tax base and high demand for services means that the commonwealth’s budget will be facing a major structural imbalance and cash flow issues well into the future.

The economic and budgetary challenges have impacted the healthcare system in Puerto Rico profoundly. On one hand, we are very proud of our Puerto Rico-based health plan clients on the island. Two of our clients are Medicare Advantage (MA) plans that have become 4-Star rated plans. Just 50 percent of all Medicare plans nationally are 4-Star or greater and these Puerto Rico plans excelled despite the healthcare challenges on the island. Several of our clients also provide coverage to Medicaid and low-income populations, despite the fact that Medicaid in Puerto Rico is poorly funded and consistent payments are in doubt due to the fiscal crisis.

At the same time, the healthcare challenges in Puerto Rico are great. About 50 percent of the Puerto Rico population is eligible for Medicaid, compared with less than 20percent nationally. The population of Puerto Rico is also more than 20 percent older (aged 65 or more) compared with the national average. The population exodus has led to a shortage of healthcare professionals (including nurses, primary care physicians and specialists). Given the aging population and poverty level, the incidence of chronic conditions and special needs populations are very high. Literacy challenges are also an issue and, due to income constraints, there are medication adherence problems.

What needs to be done?

  • Given the imminent threat of a humanitarian crisis, Congress should immediately pass a separate disaster relief package for Puerto Rico.
  • The oversight board must prioritize economic development in addition to addressing the debt and budgetary crisis. This is the secret to the long-term economic viability of the island.
  • Congress should address the gross inequities in how Medicare, Medicaid and the Exchanges are funded in Puerto Rico. While Puerto Ricans do not pay a federal income tax, they pay almost every other federal tax and are clearly being discriminated against here. What helps keep our American healthcare system afloat is the “cost transfer” from Medicare and Medicaid to private insurance to make up for government payment shortfalls. Due to the small commercial insurance base in Puerto Rico, this transfer helps negligibly, if at all. Add the funding inequities and a crisis emerges. The impact from Irma and Maria makes reform even more important. Lives are depending on it.
    • Congress needs to look at the issues that impact both beneficiaries and health plans in Puerto Rico. Puerto Rican residents pay into Medicare, yet do not benefit from all parts of Medicare funding, for example the Low Income Subsidy or LIS funding.
    • Added Medicaid dollars must go to Puerto Rico. Temporary rescue funding came to the island and stabilized things a bit, but a permanent solution is needed. Without one, both plans and providers will lose faith in the program and participation will continue to dwindle. If Puerto Rico were a state, it would receive 83 cents on the dollar from the federal government to fund Medicaid. Today, they get about 23 cents on the dollar because the 55 percent federal financial participation (FFP) rate, which is already too low, is capped at an allotment.
    • In lieu of participation in the national Exchanges, the island receives a capped allotment to defray costs of the uninsured. It does not come close to recognizing the need as the generous premium and cost-sharing subsidies do nationally. Consequently, the Commonwealth must chip in more money.
  • Congressmen and Senators from both sides of the aisle must advocate for federal funding to help Puerto Rico recover and not short-change the island. As a territory of the United States, Puerto Rico does not have a strong voice in Congress. Territories have but one non-voting representative in the House of Representatives and no representation in the Senate. While huge needs in Texas, Louisiana and Florida exist, it is incumbent on Congress to also give attention to the immediate and long- term needs of Puerto Rico. With the loss of significant businesses over the last decade or more, Puerto Rico is heavily reliant on tourism for its livelihood. This makes the island even more vulnerable now due to Irma and Maria. Tourists will lose faith in Puerto Rico as a destination unless quick action ensues to rebuild.
  • Priority needs to be given to healthcare needs. Relief efforts are hampered by Puerto Rico’s location. Everything has to be flown in to a country that has seriously impacted communications and infrastructure right now. There are hospitals that are battered and in need of power and basic necessities to care for the sick. They are overwhelmed right now due to the hurricanes. There are residents with cancer in need of life-saving chemotherapy treatments. Delay risks lives. There are diabetics who need refrigerated insulin. There are those with multiple co-morbidities who are shut off from primary care and care managers. This healthcare crisis will need the concerted effort of the U.S. government, Puerto Rico’s government and even states in reasonable proximity of Puerto Rico to avert a humanitarian crisis. It is not far-fetched to say that those most in need may need to be temporarily relocated to Florida and other states to meet their health needs.
  • Increase public awareness of Maria’s impact on Puerto Rico. If you listen to public service announcements (PSAs) and non-profit requests for funding, with few exceptions it is limited to victims of Harvey and Irma within the continental U.S. Non-profits and other entities need to educate the public on the crying needs of Puerto Rico and to ramp up public and private giving there.
  • While the folks in Texas, Louisiana and Florida should not be forgotten, Puerto Rico is especially in need of prayers, physical help, and financial donations. Please keep them in your thoughts and financial donations in these coming weeks and months. Please give generously to these American citizens.

Marc Ryan

Marc S. Ryan serves as MedHOK’s Chief Strategy and Compliance Officer. During his career, Marc has served a number of health plans in executive-level regulatory, compliance, business development, and operations roles. He has launched and operated plans with Medicare, Medicaid, Commercial and Exchange lines of business. Marc was the Secretary of Policy and Management and State Budget Director of Connecticut, where he oversaw all aspects of state budgeting and management. In this role, Marc created the state’s Medicaid and SCHIP managed care programs and oversaw its state employee and retiree health plans. He also created the state’s long-term care continuum program. Marc was nominated by then HHS Secretary Tommy Thompson to serve on a panel of state program experts to advise CMS on aspects of Medicare Part D implementation. He also was nominated by Florida’s Medicaid Secretary to serve on the state’s Medicaid Reform advisory panel.

Marc graduated cum laude from the Edmund A. Walsh School of Foreign Service at Georgetown University with a Bachelor of Science in Foreign Service. He received a Master of Public Administration, specializing in local government management and managed healthcare, from the University of New Haven. He was inducted into Sigma Beta Delta, a national honor society for business, management, and administration.

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