New Guam Private Hospital Could Benefit From Health Reform

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Matched funding could provide access to $250 million from Medicaid

By Arvin Temkar

HAGÅTÑA, Guam (Pacific Daily News, July 18, 2012) – Health care reform will benefit the island's new private hospital, a hospital official said yesterday.

An influx of Medicaid funding made possible by President Barack Obama's Affordable Care Act could benefit patients and health care providers, said Margaret Bengzon, chief executive officer of the Guam Regional Medical City, which is under construction.

"The pool is enlarged for health care dollars, and that's always an opportunity," she said.

The health care law gives Guam more than $250 million in Medicaid funding until 2019, according to Pacific Daily News files.

To access the additional Medicaid funding, Guam will have to expand its Medicaid coverage to people who are slightly above the poverty line. The government hasn't decided whether to expand the island's Medicaid coverage.

Government officials have said that even though Guam is eligible for more Medicaid funding, the island doesn't have the money to match the boost. GovGuam and the federal government share the costs of Medicaid, the local government providing 45 percent.

GovGuam needs to be more creative in coming up with the matching funds because this is an opportunity to provide health care that wasn't available before, Bengzon said.

Concerns raised

Though Bengzon was optimistic about the health care law, some politicians are worried about what it could cost the local government.

Discussions over the past few weeks have prompted Sen. Dennis Rodriguez, the chair of the legislature's health committee, to send several questions to the Attorney General of Guam to clarify the complicated Supreme Court ruling that upheld the reform law. Rodriguez is running for re-election.

One question was whether GovGuam can be held liable for shortcomings in funds to set up a health care exchange, which would give uninsured people easy access to health care.

The health care law mandates all individuals buy health insurance or face a penalty. Those who can't afford health care will receive subsidies. However, it's unclear how this part of the law applies to Guam.

Medical City

During a presentation at the Rotary Club of Guam Sunrise yesterday morning, Bengzon outlined plans for the Guam Regional Medical City, which is set to open in 2014.

The CEO highlighted the economic benefits the new private hospital will bring, saying $60 million a year is lost when people leave the island for health care.

She estimated investment into the hospital will have a 3 to 5 percent "multiplier effect," in which money spent will have more impact because it will circulate in the community.

The construction and the development of the hospital, which costs nearly $200 million, could mean an actual economic impact of $600 million, she said.

The multiplier effect could continue to produce $200 million annually due to regular operations, she said.

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