Colonia, Yap-- Gov. Henry Falan has rolled back health care fee increases implemented by his predecessor three years ago, following a community group's protest over a lack of public consultation on rate changes.
In an executive order issued Feb. 15, Falan noted that “a proposal for [a] schedule of health services fee increase needs extensive and exhaustive discussion within the government, and between the government and the public.”
The cost of medical care is heavily subsidized in the four states of the Federated States of Micronesia. But with costs rising, key personnel in various divisions within the Yap government conducted a review of the island’s fee schedule for the Department of Health Services in 2016 “with a view to see what services, tests, and medicines were still offered and being used, and what were not.”
The team addressed “actual costing on current services, then applying a discount to ensure medicines and services [were] still affordable to residents.”
The 2016 review was the first attempt by the state’s DHS to conduct a thorough assessment of costs and prices since it had been set in place in 1989. There had been updates over the years, but none were made official and charges for medical procedures, prescriptions and general hospital services were often inconsistent.
It was time to develop and adopt a formally structured fee schedule using actuarial studies of cost components to generate more realistic, consistent hospital charges albeit at a heavily subsidized rate.
The review team’s final recommendation sent to then Gov. Tony Ganngiyan included changes to the cost of medical and dental procedures and drugs to bring them in line with the actual cost of medical supplies and procedures rendered by DHS.
But, it stated, although the proposed fees took into account actual costs that were continuing to rise every year, DHS was mindful of affordability so they had placed the “pricing lower than cost as a subsidy for the people.”
After a 30-day public comment period, Ganngiyan issued an executive order on Feb. 22, 2018 stating the need to revise the old fee schedule to be “more reflective of the actual cost of services available in the state.”
Nearly three years to the day, Falan issued an executive order revoking the revised, approved fee schedule that resulted from that review.
Falan’s order noted that “there has been public outcry that demands an urgent need for a proper consultation to be conducted” and that the public consultation exercised during the fee increase “was not sufficiently conducted as appropriate and consistent with applicable laws.”
The protest was initiated by the Concerned Citizens Group, a local nonprofit dedicated to “encouraging transparency and integrity in government operations, and to protect the people’s rights under the Yap State Constitution, Yap State laws and the Traditions and Cultures of Wa’ab.”
After meeting with executive and legislative officials in early 2020, CCG circulated a petition formally requesting Falan to amend the regulations and policies on hospital fees and reduce costs to patients.
It focused on removing the increased after-hours, weekend and holiday fee that had gone from $2 to $10 in 2018. The user fee for services during normal business hours had remained at $2.
CCG was concerned that patients might forego emergency treatment during off-hours and instead wait to go to the hospital until the next business day.
The petition, which was sent to Falan on Aug. 6, 2020, had 2,000 signatures.
Cited in the adoption of the 2018 fee schedule, Healthcare Financing is one of six priority areas laid out in the FSM’s Framework for Sustainable Health Development Plan for 2014 – 2024, the goal of which is to “increase financial sustainability and ensure universal access to essential healthcare services.”
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In addition, under the Compact of Free Association’s Health Sector funding, all health departments in FSM were “encouraged to strengthen the revenue enhancement efforts to augment sustainable funding for health services and programs given the Compact funding’s end in 2023.”
In revoking the 2018 fee schedule, Falan stated in his executive order, “It is the policy of the executive to respect and value the rights and integrity of families seeking to access government services, including our Health Services.”
“During all efforts to sustainably develop the state, the executive is guided by the supremacy of the general welfare of the people at all times [to] ensure that children and families have easy access to government services.”
Reversing the 2018 policy, the governor said, is also aimed at alleviating the residents' financial challenges at "this difficult financial time" as Yap experienced loss of jobs and revenue declined due to the state’s border closing during the pandemic.
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