For many of Hawaii's hospitals, providing charity care to those with limited means has long been considered an integral part of their mission. But the soaring cost of offering free medical services to residents of neighboring Pacific islands is further straining the Aloha State's already troubled healthcare system.
According to the Healthcare Association of Hawaii, the state's hospitals are owed tens of millions of dollars for care they've provided to residents of Guam, Micronesia and many other island nations--care that can't be denied but is unlikely to be reimbursed.
With their unique immigration status as "habitual residents," these islanders can seek medical services in Hawaii or get referrals to Hawaii specialists from their local physicians.
As a result, Hawaii's hospitals are now calling for state and federal action before things get worse. They want to be compensated for future care they provide and reimbursed for the services they've ponied up so far.
"The lack of compensation from island nations to the west of us is having a severe impact on our hospital members," said Richard Meiers, the HAH's president and chief executive officer. "We've been working with our congressional delegation and others to try to get this problem fixed."
While it's tough to place a total dollar value on all the care Hawaii and its healthcare providers have given Pacific island migrants, figures from individual hospitals are telling.
Kapiolani Health, a 348-bed, two-hospital system in Honolulu, has been writing off about $2 million a year from its bottom line in uncompensated care for residents of neighboring nations.
And Queen's Health System, the state's largest healthcare system, estimated that during the past 12 to 18 months it has accumulated $16.5 million in debt in Pacific Basin charity care.
"We're seeing more patients and fewer payments from these (nations)," said Rix Maurer, Queen's chief financial officer. "And when they do pay, we tend to get 30 cents on the dollar."
The Honolulu-based, two-hospital system has been actively working with officials from several island nations to settle outstanding claims. While some regions such as Saipan are cooperating, others, such as the Micronesian island of Chuk, are not.
Compounding this problem is last month's bankruptcy of Guam Memorial Health Plan, which provided coverage for Guam residents seeking care in Hawaii. Because Guam has no state compensation fund to cover such events, Queen's will have to write off $2.8 million in claims left unpaid by the health plan, Rix said.
And things are poised only to get worse. The number of Pacific islanders seeking medical care in Hawaii has been climbing steadily, to more than 6,100 in fiscal 1998 from a few hundred in the late 1980s, according to Hawaii's Department of Health.
Part of the reason is that most of the Pacific islands haven't organized a fiscal structure to provide primary care or to finance outside referral care, said officials at 139-bed Straub Clinic and Hospital, which also has been struggling with delayed or reduced payments from Pacific nations.
"The U.S. was supposed to help (these nations) develop the necessary infrastructure, but because that hasn't happened, these people can't get adequate care at home," said Henry Preston, M.D., director of Straub's Pacific Island Medical Service, which treats migrants from Pacific nations. "The cost of referrals is phenomenal compared with local care."
To make matters worse, because habitual residents are considered visitors rather than legal immigrants by U.S. Immigration, they aren't recognized under federal Medicaid statutes, Preston said. That means the state Medicaid dollars that Hawaii is shelling out to cover these migrants isn't being matched by federal funds, as with other legal residents.
Some help could come in the form of revisions to the 1986 Compact of Free Association, which governs the relationship between the U.S., the Republic of the Marshall Islands, the Federated States of Micronesia and the Republic of Palau.
The compact allocates U.S. funds to these nations for economic development, healthcare and education in exchange for U.S. military interests in the Pacific. But because it doesn't specify where or how the money is to be spent, the nations have earmarked little for covering their residents' healthcare costs, particularly those racked up away from home.
The parts of the compact dealing with Micronesia and the Marshall Islands are set to expire in 2001 and are now up for renegotiation. Hawaii's hospitals are urging the U.S. State Department, which is in charge of the negotiations, to make several changes they believe would ease the repayment problem.
These changes include targeting U.S. funds for specific purposes, such as healthcare; assisting Pacific island nations in establishing good primary-care systems, which would curb expensive referrals and provide necessary preventive care; developing a telemedicine system to support local physicians; and creating a joint purchasing alliance among Pacific regions to cut the disproportionately high costs of drugs for these nations.
The State Department's Bureau of East Asian and Pacific Affairs held a meeting this month with all the federal agencies that have oversight of various issues relating to the compact.
"Our negotiators are aware of the problem (in Hawaii) and intend to address it under the new compact," said a State Department official.