Schneider Regional Medical Center (photo submitted)
In 2005, Dr. Luis Amaro returned to St. Thomas to put his share in the soil in which he was born. That was a year after community activists and the hospital he now runs opposed the proposal to have a private outpatient surgery center on the island.
Recently, Amaro, who was appointed Interim Chief Executive Officer of Schneider Regional Medical Center in early 2020, said, “We have many of them now.”
In his estimation, far more than necessary. This proliferation has and will continue to exacerbate the struggles of local hospitals at a time when COVID-19, gun violence, and general community health challenges are draining the resources of what Amaro calls “flagship institutions” in the US Virgin Islands.
“The hospitals have to exist,” he said, “so that others exist.”
Yet at no point in the past 16 years, while these private medical facilities had expanded, had hospital officials been invited to participate in discussions about “how health care is considered” by the needs and tax certification agencies Advantages for these private providers.
Bernard Wheatley, who was Schneider’s CEO from March 2013 to December 2019,
confirmed with no small frustration that, despite his best intentions and efforts, senior government officials failed to understand that the Territory could not live without hospitals. One official, Wheatley said, thought the private facilities could replace the need for a hospital.
“This attitude overlooks critical care, emergency services, or inpatient procedures,” he said. “That just doesn’t make sense.”
He also repeated Amaro’s experience of not being included in the conversation as that
Medical staff of the Regional Medical Center Schneider on duty (photo submitted)
the first two outpatient surgical centers – which also offer other services that rival the hospitals – were recognized for services under the government of Gov. Kenneth Mapp approved.
“Mapp has neutralized all objections,” he said, referring to the addition of two competing private medical institutions that were approved for services in 2018 when Mapp left office.
Fights of a public hospital
The Schneider region’s deficit prior to COVID’s visit was $ 6 million. Amaro said it more than doubled in the year following the pandemic outbreak.
Amaro said the hospital offset the $ 14 million deficit in the hospital’s $ 85 million annual budget by creating new services and cost savings.
The hospital will be reimbursed for inpatient services from Medicare at a daily rate of $ 1,800, no matter how complicated the procedure, he said.
“We get $ 1,800 for everything from mole removal that requires an overnight stay to gunshot wounds in the other extreme,” he said.
Employees of the Schneider Regional Medical Center in the operating room (photo submitted)
Between July 1, 2019 and May 21, 2021, the hospital treated 87 people for gunshot wounds for a total of $ 1.86 million. That’s an average of $ 21,386.98 per patient, most of it uncompensated.
Outpatient services that the private outpatient clinic withdraws from the hospital are reimbursed by Medicare at 40 percent of the costs – a significantly higher return. And that does not affect the amounts that private insurance companies pay to the private health centers.
Amaro was unaware of the Paragon Surgical Center’s recent attempt to gain tax breaks through the Economic Development Authority’s program.
In general, these benefits would include:
– Reduce corporate tax by 90 percent;
– Income tax cut by 90 percent;
– 100 percent exemption from gross income tax;
– 100 percent exemption from property tax;
– 100% exemption from excise tax payments; and
– Reduction of the tariff rate from the usual 6 percent to 1 percent.
He was aware of the other two outpatient surgical centers that had approved tax breaks in recent years during Wheatley’s tenure without the need for public countermeasures or hospital contributions. These are Plessen Healthcare, an outpatient surgery center on St. Croix that provides the infrastructure for comprehensive outpatient surgical services, internal medicine and medical tourism services, as well as back office services, and Liberty Medical Development Healthcare, a subsidiary of Comprehensive Orthopedic Global, was originally based on St. Thomas by Dr. Brian Bacot founded.
According to the website of the Economic Development Authority, Liberty offers medical tourism and services that include outpatient surgery in the fields of orthopedics, podiatry, ophthalmology, ear, nose and throat medicine, pain management, urology, general surgery, gastroenterology and reconstructive surgery.
According to Amaro, the hospital’s income is volume-dependent. It also relies on financial support from TEFRA, a category of federal medical aid approved by the Tax Equity and Fiscal Responsibility Act of 1982. The complicated relationships, payments, and paperwork that reimburses US Virgin Islands public hospitals for a portion of the free care they provide, coupled with caps for Medicaid in the Territory, are designed to put pressure on the systems.
Add to this the additional burden of wealthier, privately insured patients who choose facilities that have little or no responsibility for the care of walking or acute patients and thus drastically reduce the hospital’s more reliable revenue base on a slippery slope.
This is not the first time
When Dr. Jeffrey Chase and his then partners raised the idea of building an outpatient surgical center on St. Thomas in 2004 and 2005, it was legal backtracking by the hospitals and the community that thwarted the effort. Those who saw the obvious pitfalls used a report from the American Medical Association to back up their position.
A quote from the article discusses what could potentially stall the march to local healthcare privatization: “As doctors expand into activities in which they compete directly with local hospitals, hospitals are investigating whether and under what circumstances they can May restrict privileges of doctors who compete in with them. One type of restriction prohibits medical personnel from having certain enumerated financial conflicts of interest, such as investing in competing hospitals or outpatient surgical centers. “
Both Chase and Dr. Raymond Cintron are on the hospital’s payroll at about $ 100,000 a year, as is Bacot.
Another point highlighted in 2004 by Carole E. Thompson, a medical professional and the only member of the ad hoc committee formed at the time to review a needs certificate for a proposed outpatient surgical center, was against the The committee’s recommendation agreed to approve the certificate. The outpatient operations center group is necessary, ”said they would take in some needy people. The hospital must take in all those in need. “
Schneider Regional Chief of Surgery Frank Odlum recently said he understood the need for a private outpatient surgical center no more than it did about 16 years ago when the idea first emerged. At that time the hospital had four operating theaters. Then as now, they were more than enough to meet the needs of a small community.
“In my opinion there is no need as long as you have empty ORs,” said Odlum. “When the hospital is working at full capacity, we can increase staff”, that is to say support a “central group of anesthetists”.
He said that over the years the volume of operations performed in the hospital decreased, it could no longer support the same number of staff.
In all of the years, which he estimated to be around 24 years old since he took up the post he still holds, Odlum said, “We never used all of the operating rooms, so he said then and now, that there was never a need ”, although the Ministry of Health has since issued certificates of need that allowed these private companies to emerge.
Despite the unnerving challenges of competition and the lack of input from hospital officials on the matter, neither Odlum nor Amaro expressed any hostility towards the doctors they have worked with and worked with for years – they even consider them friends. In addition, “private companies contribute to the tax base,” said Odlum.
But Odlum pointed out the downside of this equation.
“If they also get tax breaks, it will be paid for in one way or another by the central government,” and VI taxpayers, he said. The central government’s coffers are then doubly exhausted in that they have to bear the deficit created by private competitors.
In the time since the idea of an outpatient surgical center was circulated in the territory, healthcare has become increasingly lucrative as a business and a draw for venture capitalists, as noted in a 2018 Marketwatch article. “Your doctor has become big business. And patient advocates say you should be concerned, ”said Emma Court in the article. “Even if the waiting room, staff and the doctor look exactly the same as before, practices of all kinds are increasingly being bought up by larger corporations, hospital systems and even health insurance companies.”
That has already happened on two occasions on St. Thomas, but there could now be many more practices Court wrote that belong to non-healthcare buyers.
“These people have no medical permits to lose; they did not take Hippocratic oaths, ”said Marni Jameson Carey, executive director of the Association of Independent Doctors, a nonprofit trade association that represents more than 1,000 doctors in 33 states. “You are there for profit reasons. And Americans will pay for it, either with their health or their finances or both. “
There is even more profit locally for these private medical facilities. Liberty’s Economic Development Authority certificate, valid until December 31, 2038, provides 100 percent tax relief for income and gross receipts and 90 percent for excise duties. The income tax exclusion does not include the doctor’s personal income. Click here for an edited copy of the 2019 Certificate: Liberty Medical Tax Relief Certificate
Plessen’s services (Plessen Healthcare tax certificate) are the same as those of Liberty, but valid for 30 years until December 31, 2048.
Two critical, but often overlooked, problems are worth noting:
– The 90 percent tax exemption also applies to dividends received by the company’s shareholders.
– The services can be transferred upon request for transfer in the event of a company sale.
A precedent has been set, Amaro said. “The horse is already out of the stable.”
Odlum, who has also been relegated to the hospital’s payroll with another doctor who is receiving tax breaks for the competition with Schneider Regional, uses the metaphor: “The cat is already out of the bag.”
Reference to the Hippocratic Oath – the earliest medical code of ethics in the western world.
Amaro said, “No harm, it comes to mind.”
