P.R. healthcare system is one of the most expensive in the world

Puerto Rico has one of the most expensive per capita healthcare systems in the world, following more than 10 years of healthcare costs outpacing overall inflation and economic growth.

In 2006—the most recent year for which data are available—healthcare spending on the island was almost $12.5 billion, or 22% of Puerto Rico’s gross domestic product. Spending is widely expected to increase even further in coming years.

Since 1996, the island’s health-related expenditures have increased an average of 8% per year, compared with average annual economic growth of roughly 2% during the same period.

To the 35% of Puerto Rico’s four million-plus population who are ages 45 and older, healthcare not only is a dominant topic but an integral part of the island’s economic-development engine. In fact, more than 45,000 people are employed in the industry, about 6% of the total workforce, making healthcare one of the largest industries by employment on the island.

More than 35% of all of Puerto Ricans have the benefit of being insured under the Health Reform—better known as La Reforma—enacted in the late 1990s. Another 40-plus percent of the population (depending on the study) is insured under private health-insurance plans, leaving 4% to 7% of the population uninsured. Approximately 85% of the government’s program is financed by local revenue with the federal government contributing a small amount through Medicaid and the State Children’s Health Insurance Program. The program is loosely based on traditional managed-care programs with patients going to primary physicians who then send them to specialists, laboratories and hospitals. Coverage for enrollees includes doctors’ services, medical tests, surgery and medicines.

The creation of Medicare Advantage has resulted in a huge phenomenon on the island. Medicare Advantage was created in 2003 to replace Medicare Plus Choice and provides additional benefits on top of the traditional Medicare plans, allowing private insurance companies to manage the benefits. Most Medicare enrollees are in a Medicare Advantage Prescription Drug Plan (MAPD). According to Medicare information, Puerto Rico has 618,516 Medicare beneficiaries of which 438,812, or 71%, are enrolled in some kind of prescription-drug plan. Approximately 54% of beneficiaries are enrolled in an MAPD plan.

Health-insurance companies have gone through major changes this past year. Numerous healthcare executives have been replaced at every major company; after a year or so of rumors, Triple-S Management has agreed to purchase La Cruz Azul de Puerto Rico, hopefully before the end of 2009; Humana lost La Reforma's Metro

Norte contract—which was awarded to Triple-S; Medicare claims are to be processed by a Florida company; and HIMA-San Pablo’s $800 million investment remains on schedule despite financing challenges.

The other reality of Puerto Rico’s healthcare system is that the general health of people living on the island isn’t the best, even though numerous preventive-medicine campaigns have surfaced. The government’s health plan accounts for the central government’s largest deficit—amounting to approximately $500 million, which makes industry experts wonder if it is a disease reform or health reform.

Puerto Ricans are almost twice as likely as their mainland U.S. counterparts to be diagnosed with diabetes. The island also has a higher rate of heavy drinkers than the average for all 50 states.

Many more people in Puerto Rico (8.4%), according to a 2005 Centers for Disease Control & Prevention poll, said they had health problems that required the use of special equipment compared with the rest of the mainland U.S. Furthermore, 39.1% of Puerto Ricans who have had their blood pressure checked were told it was high compared with 35.6% in the rest of the U.S. Even though people are acquiring some kind of health conscience, Puerto Ricans are more likely than the rest of the U.S. to have diabetes and asthma and less likely to eat the recommended five servings of fruits and vegetables on a daily basis.