Este informe no está disponible en español.


The Fight For Equality In Medicare Topped Local Health Industry Concerns In ’04

Hospitals continue expanding and adding specialized services


December 30, 2004
Copyright © 2004 CARIBBEAN BUSINESS. All Rights Reserved.

During 2004, local hospitals continued sounding the alarm in their demand for Puerto Rico to be treated fairly regarding Medicare coverage and payments. At the same time, to remain competitive, they continued expanding by adding specialized services and improving their infrastructure.


Even though workers in Puerto Rico and their employers pay the same federal Medicare payroll tax as people on the U.S. mainland, and senior citizens in Puerto Rico pay the same deductibles and co-payments, hospitals in Puerto Rico are paid substantially less than hospitals in the States because the Medicare law requires payments to hospitals in Puerto Rico be made according to a different formula.

"[Hospitals in Puerto Rico] are losing $74 on every one of their elderly Medicare patients," said Alfredo Volckers, executive vice president of Pavia Health (Oct. 16, 2003). "That translates into a net loss annually by member hospitals of $10 million. This means it will be difficult to improve patient services, raise salaries, and improve equipment."

In December 2003, Congress finally decided to increase reimbursements to local hospitals, but not to the desired 100%. Reimbursements were boosted to 75% in October 2004, but the health industry has continued to push for the 100% reimbursement.

Volckers–also president-elect of the Puerto Rico Hospital Association–pointed out that if the 100% formula were applied to Puerto Rico, PRHA member institutions would be receiving approximately $316 for every Medicare patient [given the current 137,000 patients discharged every year], which would translate into approximately $43 million more annually for the hospitals to improve their financial situation.

Another Medicare issue that was debated locally was the possible integration of Puerto Rico into the Florida region for purposes of Medicare Advantage. The Centers for Medicare & Medicaid Services (CMS) considered integrating Puerto Rico into a region composed of some mainland states, which would have allowed stateside health insurers not familiar with the local market to compete with local participating insurers.

However, locals–among them former Resident Commissioner Anibal Acevedo Vila and Health Secretary Johnny Rullan–stressed the importance of making Puerto Rico a stand-alone region. CMS and the Health & Human Services (HHS) Department finally decided to go along with the recommendation of making Puerto Rico a stand-alone region.

Medicare Advantage, known until recently as Medicare Plus Choice, includes more preventive services, prescription benefits, and waivers on deductibles than traditional Medicare coverage.

A few local insurance companies jumped on the Medicare Advantage bandwagon in 2004. Triple-S launched Medicare Optimo, Medical Card System (MCS) launched Classicare, and Preferred Medicare Choice also launched an Advantage program. MMM Healthcare was the first local company to enter this segment about three years ago, when Medicare Advantage was still known as Medicare Plus Choice.

Hospital expansions

Pavia Health is currently in expansion mode, investing $65 million in new, state-of-the-art medical facilities.

Perea Hospital is getting 20 more beds in the acute-care division and another 20 beds in the psychiatry unit. It also will open four new operating rooms. San Jorge Children’s Hospital is adding an emergency room, a pediatric acute-care center with 17 beds, and a multilevel parking lot with 500 spaces.

Pavia Hospital in Santurce also will get a new emergency room and a 500-car parking facility. Finally, Pavia in Hato Rey is developing a cancer treatment center, adding 40 beds to the psychiatry unit, and building a new emergency room and a multilevel parking lot with 250 spaces.

Servicios de Salud Episcopales Inc. (SSE) President Guillermo J. Martin is in negotiations to purchase a hospital in the San Juan metro area. He also said he will renew discussions to manage the former Roosevelt Roads Naval Hospital and will turn Ponce’s Hospital Episcopal San Lucas into a nursing home, rehabilitation center, and center for Alzheimer’s patients.

Ivan Colon, administrator of Auxilio Mutuo Hospital in Hato Rey, told CARIBBEAN BUSINESS the hospital is investing about $8 million to expand its cardiovascular center and some $500,000 to add new equipment and a new chemotherapy unit to its cancer center.

Pedro L. Benetti, Hospital San Cristobal senior executive vice president, said the institution has installed a $1.2 million digital catheter unit, and is undergoing an expansion totaling $1 million and will later embark on a $2.5 million additional expansion that will add a parking tower and more hospital beds.

San Pablo Hospital in Bayamon will invest $16 million on two projects: an $8 million four-story building, on which construction will start in about three months, and an $8 million multistory parking structure with capacity for 500 vehicles, announced Executive Director Jorge Matta.

With these expansions, local hospitals aim to stay on top of new trends in medicine and to compete effectively with other hospitals. Meanwhile, the battle for Medicare equality continues.

This Caribbean Business article appears courtesy of Casiano Communications.
For further information, please contact:



Self-Determination Legislation | Puerto Rico Herald Home
Newsstand | Puerto Rico | U.S. Government | Archives
Search | Mailing List | Contact Us | Feedback