As Puerto Rico’s fiscal crisis grows into a humanitarian one, health care looks like the first big casualty

By Michael A. Fletcher November 5

The Washington Post

The fiscal crisis gripping Puerto Rico is now threatening the island's health care system. (Photo by Joe Raedle/Getty Images)

The fiscal crisis gripping Puerto Rico is now threatening the island’s health care system. (Photo by Joe Raedle/Getty Images)

Until recently, Puerto Rico’s fiscal crisis has been like a slow-motion hurricane churning toward land, in that the damage was more potential than real. Yes, there have been minor bond defaults, government jobs have been cut, and public-employee pensions slashed. Meanwhile, the economy has been in a decade-long funk, keeping the unemployment rate in double figures, and prompting tens of thousands of Puerto Ricans to decamp for the U.S. mainland.

But now with the commonwealth on the verge of running out of cash, officials are warning that the disaster is picking up speed and threatening institutions crucial to maintaining Puerto Rico’s quality of life.

The island’s health care system is sagging, burdened by funding shortages, an inability to borrow money, and an increasing flow of doctors, nurses, and medical technicians to the mainland–where they can make more money and work under better conditions.

The result is packed emergency rooms in Puerto Rico, and months-long waits for some life-saving procedures, according to doctors there.

“We try to provide patients with the best treatments but because of a lack of funding we do not have an adequate number of health providers and resources for the demand,” said Dr. Jose Carlo-Izquierdo, a neurologist on the island.

The health care problems are a direct result of Puerto Rico’s staggering $73 billion debt, which coupled with the island’s stagnant economy, has left the government unable to pay its bills. Puerto Rico officials are calling on the Obama administration and Congress to help by increasing Medicare and Medicaid funding to the commonwealth, but so far their pleas have not been answered.

The Obama administration has asked Congress to treat Puerto Rico and other U.S. territories the same as states when it comes to Medicaid reimbursements. That would mean an increase in funds, but so far that request has gone unfulfilled.

Meanwhile, Puerto Rico is slated for a sharp reduction in its Medicare reimbursement rates next year even as those rates increase in the 50 states. Already, the commonwealth’s Medicare Advantage program is paid at just 60 percent the average rate of the states, while the broader Medicare reimbursement rates are 40 percent lower than those on the mainland.

Since nearly 70 percent of the commonwealth’s 3.5 million people rely on Medicare and Medicaid for their health care, the reduction is likely to hit hard. That would harm Puerto Rico’s health care system by draining much needed cash. It would also further cripple the broader economy, since health care accounts for about a fifth of the commonwealth’s economic output.

The growing health care crisis has prompted political and religious leaders in Puerto Ricoto call for a march on Thursday to press for congressional help. New York Gov. Mario Cuomo (D), as well as Bill de Blasio, the Democratic mayor of New York City–the city with the largest Puerto Rican population in the country–are among the mainland elected officials expected to take part. Organizers estimate that 25,000 will take part in the march.

“The collapse of the Puerto Rican healthcare system will be devastating to the island’s already weak economy–and will impact millions of Puerto Ricans living in the mainland, including 700,000 in New York City,” de Blasio said in a statement. “We have a moral obligation to stand with our fellow Americans as they call on the Federal Government to help the island’s economy.”

Dennis Rivera, chair of of Puerto Rico Healthcare Crisis Coalition, said there are plans to reduce the work week of public employees in Puerto Rico by two days, or 40 percent. Meanwhile, hospitals and other health care institutions are bracing for reduced funding and smaller reimbursements from the government.

“The crisis is going to get dramatically worse in the next few weeks as the government runs out of money,” he said.

If that plays out, it could spawn a cycle of decline that hurts the commonwealth’s health care system and its residents. “It would be a human catastrophe,” Rivera said.

Last month, the Obama administration unveiled a multi-pronged proposal aimed at helping Puerto Rico through its fiscal crisis and sparking economic growth going forward. But the plan’s central elements–a new kind of bankruptcy protection that would create an orderly procedure for Puerto Rico and other U.S. territories to reorganize debt, as well as health care funding increases and extension of certain tax credits to the commonwealth–have been met with skepticism from many Republicans in Congress.

Speaking at a Senate hearing late last month, Puerto Rico Gov. Alejandro Garcia Padilla said that with commonwealth on the verge of running out of money a humanitarian crisis is on the horizon. And given the painful choice between paying for essential services or paying back the commonwealth’s many creditors, he said he would choose paying for services.

Now with the island’s health care system teetering, he is calling on the federal government to act so he does not have to make that choice.

“One of the causes of the fiscal crisis we are living is the unfair treatment by the federal government on healthcare funding for Puerto Ricans,” Garcia Padilla said in a statement. “This march goes beyond party lines and is a collective effort to fight for our rights.”

Michael A. Fletcher is a national economics correspondent, writing about unemployment, state and municipal debt, the evolving job market and the auto industry.

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