Governor Says Long Term Solution Needed to End Cycle of Hospital Bail Out


GMH and the Hospital Advisory Management Team have been meeting twice a week to try and solve the hospital’s growing debt. 

Guam – The hospital is in debt by about $26 million most of it owed to various vendors and as of last week Friday, $4.5 million of it was owed to the Retirement Fund.


We spoke to Governor Eddie Calvo about the hospital and what he thinks the answer is to all their problems. We asked him how much of an impact the $50,000 to $80,000 a month savings they announced would have in comparison to a $26 million debt.

“Actually that’s what we’re, with these discussions, we have to take a look at the realities. Let’s say we save a million dollars cumulatively over a year for using one system in place or best management practices in regards to billing, where we don’t put the 8 percent discounts, 75 percent have to be paid up front–this will improve the cash flow and it’ll improve the cash flow. Heck, if we could get $5 million to $7 million in improved cash flow annually, that helps,” he notes. “But it does not negate the situation we’re in right now–is that we have $25 to $26 million in payables due and outstanding now.”

The governor says GMH is losing money from self-pay patients who don’t pay or simply don’t have the money to pay. GMH is also not getting reimbursed fully for Medicare because Medicare is still reimbursing the hospital based on an old fee schedule.

“We’re gonna bill for it but knowing full well that we’re not gonna get it, based on this inequity and some of it’s placed in the back as a result of the federal government and unfairness to the Territory of Guam, that we’re not gonna be paid for the full amount of those costs,” says Governor Calvo.

Governor Calvo says ultimately it’s the people of Guam who will have to foot the bill.

“That’s why we need to look at a long term sustainable plan and that means subsidization by the government of Guam, or by the people of Guam to make up for that shortfall. That doesn’t mean we’re not gonna continue to fight. We’re gonna put the pressure on the federal government on their obligations,” he says.

Although GMH has borrowed money in the past, the governor says borrowing money again is not the ultimate answer to the hospital’s debt.

“We need to look now not only as we solve the current issues of what their obligations are, but finding a real solution so we won’t have to go on this process every three, four, five years where we have to dig them out of this hole,” he adds.

Governor Calvo also recently spoke to leaders from the Freely Associated States and asked them to back him as he puts pressure on the federal government to make good on their commitments to fund the impacts of the Compacts of Free Association.