An alarming look at health care spending | Featured Columnists

Last week we talked about prioritizing our highway funds to accomplish their intended purpose – to fix our roads. This week as we continue to talk about prioritizing government funds, let’s turn our attention to the health care dollars our government spends. According to the annual Medicaid Expenditure and Demographic Report by the Department of Public Health and Social Services, our government spent $107,064,413 on Medicaid and Medically Indigent Program (MIP) spending in 2016. If this figure was a government agency budget in and of itself, it would be the second largest agency budget in GovGuam, second only to the Guam Department of Education.

Troubling figures

When we delved into the numbers, especially the historic numbers on how much of these funds were going to Guam Memorial Hospital versus how much was going to non-GMH providers, we found some alarming figures. In 2010, GovGuam spent $9,431,124 in non-GMH Medicaid and MIP spending. By 2011 that number had nearly doubled, growing 89.4 percent to $17,866,229. In that same period our general fund spending on our public school system grew by only 3 percent.

In 2012 it increased another 36.7 percent to $24,424,660. By 2013 it more than doubled again, growing 103.4 percent to $49,691,904. All this while GMH’s appropriations stagnated, our non-GMH Medicaid and MIP spending grew leaps and bounds. As of 2016 the non-GMH Medicaid and MIP spending has grown to $73,519,049 according to the same report. That’s a 679.5 percent increase since 2010. No other area of government spending has grown so rapidly.

Advocates for this huge spending increase say it is good that Medicaid and MIP patients have more choice and can see private providers for ailments before needing to go to the emergency room at GMH, lowering costs to the hospital and patients. In this time however, GMH’s operational losses have continued to grow, from $21.1 million in 2010 to $29.2 million in 2016 and more importantly, it is the amount and rate of increase that our government expends on non-GMH Medicaid and MIP spending that is alarming.

What is troubling still is that there are now proposals to increase GRT taxes and borrow an additional $125 million in order to fix the financial situation at GMH. But when we have already increased our non-GMH Medicaid and MIP spending by $64 million and 679.5 percent from 2010 to 2016, it really begs the question to any objective observer – why can’t we prioritize our government’s health care spending to help GMH? If we had just reprogrammed 15 percent of that non-GMH Medicaid and MIP spending since 2010 back to GMH, we would not have needed to borrow $50 million in recent years to pay off severely past-due hospital vendors.

Prioritize existing spending

When you go to the emergency room there is triage, where the patients in most need of immediate medical care are given first priority. In government finances we must undoubtedly do the same thing and the patient in most need among our health care priorities is Guam Memorial Hospital. It is a matter of prioritizing our existing spending to fund the shortfalls at GMH, not raising taxes and more borrowing.


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