GMH, GRMC and Guam politics

Lessons from Everyday Life By Theodore Lewis

Bridgman, MI—Recently, I read an article from Guam about the 10th anniversary of the opening of Guam Regional Medical City, which opened in 2015. Before GRMC opened, the only civilian hospital on Guam was the government-owned Guam Memorial Hospital. The Naval Hospital Guam only serves the military personnel and is not open to the general public.

I had just joined GMH as interim CEO when GRMC opened its doors in July 2015. I remember the opening ceremony as if it were yesterday.

On the one hand, I was thankful that the people of Guam would have an additional healthcare resource in a community known for its shortages of healthcare providers and services. On the other hand, I was concerned that GMH would lose a significant amount of market share to the new hospital, potentially threatening its viability.

Those whose ideas and resources were summoned to open GRMC had the right idea. For decades, the lack of industry expertise and political meddling by the governor’s office—the real controllers of GMH—had resulted in the hospital’s underperformance. GMH is an aging facility with a significant number of patients who lack adequate insurance coverage.  

Over time, the long-term ineptness of GMH had resulted in a significant number of Guam residents with health insurance coverage choosing to go off-island for their serious health care needs.

In 2015, when the annual number of inpatients being admitted to GMH had been consistently running about 12,000 per year, I estimated that there was a minimum of 4,000 hospital admissions from Guam residents occurring in the Philippines, Hawaii and California. I based that estimate on the average of 104 hospital admissions per 1,000 population that occurred in the U.S. annually and subtracting the total military population on Guam that seek treatment at the Naval Hospital. To the extent that GRMC could capture many of these admissions going off island, everyone on Guam would benefit.

Margaret Bengzon was the GRMC’s first CEO. She was part of The Medical City, based in Manila, Philippines. 

Even though I had been at GMH for only a few months when GRMC opened, I tried to ensure that we retained as many of our physicians at the government hospital as possible. 

In the hospital business, those who hold the physicians hold the hospital's success. I realized later that my concern about losing most of the primary community-based physicians from GMH to GRMC was unfounded.

A significant factor with providers deciding not to leave GMH for GRMC was that GRMC required a physician applying for privileges to carry a certain level of malpractice insurance, which is standard procedure in most U.S. hospitals. It turns out that a large number of private physicians on Guam didn't—and still don't even now—carry malpractice insurance. This is mainly because GMH doesn't require it for privileges to join the staff (an almost unheard-of practice for hospitals in the U.S.)

Therefore, the GRMC requirement to carry malpractice insurance of private providers resulted in GMH holding on to a level of market share it would have otherwise lost, in my opinion. The malpractice insurance requirement is a reasonable and responsible policy. No investor or owner would entertain the idea of risking a large amount of asset investment by allowing private physicians practicing at the facility to "go bare.”

The ramp-up and first few years of GRMC history were certainly not uneventful.

By 2018, after significant recruitment of specialist providers and ramp up of services, GRMC had acquired a market share of about 40 percent of the Guam in-patient admissions (5,285 in 2018 vs 7,608 at GMH).

Then, in the last quarter of 2018, all hell broke loose at GRMC with two bombshells. First, in October, GRMC announced it was discontinuing its Maternal Child programs due to a "redundancy with GMH.” 

The closing of Maternal Child services at GRMC had a devastating effect on GRMC inpatient admissions in 2019, dropping from 5,285 in 2018 to 3,532 in 2019.  Of course, GMH had a corresponding increase in inpatient admissions, going from 7,608 in 2018 to 9,561 in 2019.

The second bombshell dropped in November 2018, as a coup developed and a takeover by a large health care provider in the Philippines, Singapore and Dubai removed Margaret Bengzon as CEO and board chair. Dr. Michael Cruz, a long-standing surgeon and Guam’s former lt. governor, was appointed CEO.

In 2021, there was another ownership change with the assets and operations being acquired by Blue Continent Healthcare Guam Medical City, a non-profit corporation.

It has taken some time, but the GRMC inpatient admission market share has climbed back up from 27 percent in 2019 to 36.8 percent in 2023.

What does the future hold for Guam's hospitals?

Anyone living on Guam is all too familiar with the deteriorating situation at GMH. The physical facility continues to crumble, leading to numerous safety issues and, ultimately, the loss of the hospital’s Joint Commission accreditation.

The incumbent governor has proposed a plan to build a new hospital, but in a location that the vast majority of medical providers vehemently object to.

There is constant fighting among Adelup, the legislature and the medical community over the GMH issue. 

Lilian Perez-Posadas, the CEO of GMH since 2019, has done a remarkable job considering her lack of hospital management background and the political dysfunction that has existed. She recently retired.

As I think back 10 years ago to the inappropriate power and intimidation Adelup's finance and budget managers exercised on GMH, when I was there to render the hospital's board and CEO impotent, I have great respect for the tenure Perez-Posadas accumulated.

Adelup control without responsibility has been the real culprit, destroying what few real leaders GMH has had.

Recently, there have been editorials and also a resurrected bill floated at the legislature proposing a "public/private partnership" as the answer for GMH, which would turn the management of GMH over to a private contractor.

In an environment where the GMH operation has so miserably failed, almost any change sounds good.

However, I'm skeptical. This complex Adelup bureaucracy, with its HR, procurement and financial systems, has emasculated the oversight of GMH, resulting in a board and executives spinning their wheels and being unable to accomplish needed tasks.

No matter who runs GMH, authority and responsibility must go hand and hand; otherwise, it will be more of the same.

Theodore Lewis is the former CEO of Guam Memorial Hospital and has a healthcare consulting business in Bridgman, MI. He is collecting stories about lessons learned in life and can be reached at theodorelewis@yahoo.com.