The road to recovery: Prospect of federal funding could reshape Puerto Rico's health system

Steven Ross Johnson
Mennonite Hospital of Caguas was able to remain open during and after the hurricane. Its parent system's six sites on the island suffered about $40 million in damage.

HUMACAO, Puerto Rico—Recovery has been slow in Puerto Rico since Hurricane Maria struck the U.S. territory Sept. 20, particularly in the island's southeast region, where Ryder Memorial Hospital is located.

For Ryder Memorial, the area's largest healthcare provider, addressing patients' health needs has been a daunting task because of how severely the hospital was damaged. Only about half of Humacao's 50,000 residents have electricity, while in the neighboring town of Yabucoa, as many as 80% of residents remain without power. "Things are bad," said Jose R. Feliciano, executive director of Ryder Memorial. "We are probably the hospital that suffered the worst from the hurricane."
Video and photos, courtesy of Steven Ross Johnson; edited by Emily Olsen. As with the rest of the region, the effects of Hurricane Maria were both swift and long-lasting at Ryder. Three days of powerful winds followed by heavy rainfall caused extensive flooding to offices, floors with inpatient beds and laboratories. "Once the hurricane entered here it was a Category 5," said Jaime Plá Cortes, executive president of the Puerto Rico Hospital Association. "One notch (higher in storm category) is good enough to kill you." More than five months after the storm, four of Ryder's five floors remain closed. Feliciano said the hospital currently is operating at 25% of its normal capacity, with many of its health services limited to primary care and the emergency department. Almost all of the hospital's more specialized services, such as surgery, have had to be outsourced to other area providers. The hospital's intensive-care and telemetry units have been severely damaged, and key equipment such as the MRI machine and supplies for its catheterization laboratory have been completely lost.

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Steven Ross Johnson

"The most important need we have right now is the payment from the insurance coimpany."

Jose R. Feliciano

Executive director

Ryder Memorial Hospital

"We have capacity for 40 beds right now, and we are full," Feliciano said. Before the storm, Ryder had 165 inpatient beds. "My principal responsibility right now is to open beds."

The storm damage forced Ryder to close its doors for the first time in its 104-year history, with a one-month shutdown starting in October.

Feliciano estimated the cost of repairs at around $24 million, and that the work at its current pace could take years to complete. Plá Cortes said Ryder's impact on the community could not be overstated. Before the hurricane, Ryder averaged more than 300 surgeries a month, and the facility was one of the only providers in the area to offer comprehensive obstetric and gynecological services; those services are now limited.

"They are the premier hospital on this side of the island," Plá Cortes said. "So, with the hospital having difficulties, patients are having trouble getting access to services like they used to."

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Steven Ross Johnson

A makeshift sign at Ryder Memorial Hospital warns of mold. Much of the hospital remains closed as officials work to repair damage from the hurricane.

Plans are on track to re-open the hospital's second and third floors soon, Feliciano said, but he acknowledged progress has been slower than planned. Part of the problem has been delayed insurance payments that the hospital is expecting to cover property damage and disruptions in services. The hospital had received $2 million of its $30 million claim as of Feb. 18. Feliciano said the payment delay has kept the hospital from bringing back to work more than 200 employees who have been suspended since the closure.

"We do not know when to expect payments, as this has been a completely random process," Feliciano said. "The most important need we have right now is the payment from the insurance company."

Ryder's issues regarding reimbursement are indicative of the lack of needed support that other providers on the island say they have faced since the hurricane hit.

As the island braces for the next hurricane season in just a few months, some fear delays in support will hinder preparation efforts, and worsen a public health system that was arguably in crisis even before Hurricane Maria. "Folks are racing to prepare for the next hurricane season," said Maria Levis, CEO of San Juan-based healthcare consultancy Impactivo. "There is an issue of time and there is an issue of resources; they are not separate from one another."

On Feb. 26, Puerto Rico Gov. Ricardo Rosello sent a letter asking congressional leaders to help reverse the U.S. Treasury Department's decision to reduce a $4.7 billion disaster relief loan to $2 billion. Congress approved the loan in October. The Treasury has yet to allocate any portion of the loan. On Feb. 8, Congress approved $6.8 billion in disaster relief for Puerto Rico as part of a budget deal, including $4.9 billion to the island's Medicaid program.

Currently 61% of the island's population is insured by either Medicaid, the Children's Health Insurance Program, a Medicare Advantage plan or traditional Medicare, compared with 31% who are covered by a commercial insurer.

The rate at which Medicaid reimburses providers in Puerto Rico has historically been much lower than in the 50 states, averaging about 50% of health costs. The island also has a federal cap on total Medicaid funding because of its status as a U.S. territory. Coupled with the lower rate, that puts the actual rate at which federal funds cover costs at roughly 23%, according to a 2017 Urban Institute report. By contrast, states with the same poverty rate as Puerto Rico, 44%, would have 83% of their Medicaid costs matched by federal dollars.

"We are underpaid, and that makes it more difficult for us to perform the type of improvements that need to be done for the long term," Plá Cortes said.

As was the case when Hurricane Katrina hit New Orleans in 2005, the federal government will pay 100% of Medicaid health costs in Puerto Rico for the next two years thanks to the budget deal that passed. Plá Cortes said that will help providers begin making longer-term infrastructure improvements, but he argued a more permanent funding change is needed.

"In many cases, we need to look at how do we do better infrastructure for some of the hospitals to make sure that they can withstand any catastrophe," Plá Cortes said. "From that point of view, I think one of the issues we have is how do we get reimbursement from the government here, and how do we get a permanent source of reimbursement from the U.S. government."

Despite a blackout in San Juan last week, there has been some progress toward recovery. Around 84% of the island has electrical power, not taking into account the temporary blackout; 97% of residents have access to drinking water, and all 68 of the island's hospitals are open, according to figures posted on the Puerto Rican government's site.

Aside from Medicaid reimbursement parity, Levis said a crucial component to Puerto Rico's recovery will be if it gets the kind of investments New Orleans got after Katrina to strengthen its primary-care infrastructure. Federal support brought more than 50 neighborhood health clinics to areas of that city that were without primary-care access before the storm. Mental health services were among the new offerings, a big need in New Orleans as residents dealt with the stress of recovery.

As was seen in New Orleans, depression has become a growing problem among Puerto Rico residents. A recent report found the number of suicides there increased by 18% in 2017 compared with 2016.

"That kind of funding vehicle for transformation will be vital," Levis said.

Providers aiding providers

With the lack of federal support, hospitals in Puerto Rico have had to move forward in their recovery efforts either on their own or with help from other entities. "There's still a lot of need in the long term in the areas of energy, communications, specialty services and infrastructure," said Ryan Frazier, senior vice president of member relations for the American Hospital Association.

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Steven Ross Johnson

An administrative office located on the fifth floor of Ryder Memorial Hospital in Humacao, Puerto Rico that suffered extensive damage as a result of Hurricane Maria. Four of the hospital's five floors have been closed since last September.

In mid-February, Frazier took his third trip to the island since Hurricane Maria as part of the organization's effort to identify Puerto Rican hospitals' long-term needs. He said the goal is to help coordinate with mainland providers to offer resources and technical assistance.

"One thing that has to happen is for the system to be able to stand up by itself," Levis said. "More than people coming to provide direct support, I think that providing technical support that will help enable our transformation is more important."

One of the places Frazier visited during his last trip was Mennonite Hospital of Caguas, a 400-bed acute-care facility and one of six sites for the Mennonite Health System, one of Puerto Rico's largest networks. The Caguas hospital sustained less damage during Hurricane Maria than Ryder and was able to stay open throughout the storm and the days that followed, according to Eric Grafals Medina, the hospital's administrator.

"We are more or less self-sustained," Grafals Medina said. "We got very limited response from FEMA or any other federal agency."

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Steven Ross Johnson

Ashford Presbyterian Community Hospital, San Juan, suffered less severe damage than many other island hospitals and has remained open, despite initial concerns about staffing vital tertiary-care departments, such as its busy neonatal intensive-care and OB-GYN units.

Grafals Medina acknowledged a part of the hospital's long-term recovery will depend somewhat on receiving reimbursement from its insurance carrier for the damage it sustained, estimated at around $40 million for the entire system, as well as from the federal government in the form of rate increases for Medicare and Medicaid.

But he felt the hospital was well-positioned to recover. Over the past few months the system has brought in experts from the mainland to provide expertise on strengthening areas of weakness that were found during the storm to better prepare for the next emergency.

The way forward

Levis acknowledged there was a need for more aid to address the island's more immediate health needs, but said recent conversations among stakeholders have focused on how the health system's recovery should look for the long term.

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Steven Ross Johnson

Pedro Gonzalez, executive director at San Juan-based, Ashford Presbyterian Community Hospital, looks out of a patient's room toward the nearby beach. The hospital was one of the few facilities that was able to remain open throughout Hurricane Maria last September.

She said what has been discussed is whether the recovery effort should focus more on rebuilding existing healthcare facilities, or whether the opportunity should be taken to redesign the health system to better address prevention and chronic disease management.

Compared to 18% of mainland adults, 34% of adults in Puerto Rico in 2016 reported being in fair to poor health, according to a report by the Kaiser Family Foundation. Puerto Rico also had higher rates of diabetes, heart disease, HIV and infant mortality than the 50 states.

Signs seem to indicate that the island's leaders are leaning toward redesigning the system to focus more on population health. Two weeks ago, the Puerto Rican government launched a request for proposals for its Medicaid managed-care program from contractors who focus on prevention and chronic disease management. That program covers 1.3 million Puerto Rican residents.

"It should not just be about rebuilding, it should be about redesigning," Levis said. "And there's still a lot to do."

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