Health News

Healthcare privatization row in Saipan comes out in the open (2)

By Lori Lyn Lirio

Kagman Community Health Center Board Chairman Velma Palacios. Image ©

KAGMAN Community Health Center board chairperson Velma Palacios reiterated the health center is not under the Commonwealth Healthcare Corporation as stated in the co-applicant agreement.

This after the CHCC said it is not obligated to transfer assets purchased for Kagman Community Health Center, which beginning May 1 has run as a private non-profit entity.

“KCHC and CHCC are partners and we are not under the CHCC. For the grant purposes, we are co-applicant,” Palacios said in a phone interview.

In 2013, the Kagman Health Center initiated its operations through “Co-Applicant” agreement between the CHCC and KCHC.

“Through the Co-Applicant agreement, the CHCC provides coordination, administrative oversight, technical support, and other services. This lessens the need for these expenses to be paid for separately by the small community health center,” CHCC Chief Executive Officer Esther Muña said in a statement.

She explained that the co-applicant agreement was entered between both parties to aid KCHC in achieving Federally Qualified Health Center (FQHC) status as it could not, at that time, independently meet the federal requirements set forth by the Health Resources and Services Administration (HRSA).

“Though KCHC has the authority to apply for FQHC funding independently, by reusing the Co-applicant Agreement as part of its justification, the new application misrepresented the KCHC’s relationship with the CHCC. The HRSA has given the KCHC a three-year extension for the grant which gives the health center more than US$1 million funds annually for its operation.”

However, Palacios said any non-profit entity may apply for this grant and does not necessarily require a co-applicant.

“One of the requirements is you have to have a community board. KCHC has community board that runs and make policy for the community health center,” she said.

Muña stressed there were no discussions with the CHCC on how the Kagman CHC would interact with the CHCC after the split.

“Only the original arrangement was listed in the application, which does not represent the new arrangements that will need to be made. The CHCC is currently in discussion with the Department of Health and Human Services (DHHS) Region IX on this matter.”

According to Palacios the KCHC board still wants to work with the CHCC board, especially in its plan to transition to independent from the corporation.

“We will continue to respect the memorandum of agreement with the CHCC,” she said, adding they still have to partner and deal with the CHCC.

“We have clients who will be needing CHCC services like in emergency situation,” she said.
Palacios said the KCHC was co-applicant with CHCC for five years and the community board felt that it could run on its own as a non-profit organization.

“This time, we apply on our own. We did not apply with CHCC. We got the grant,” she said.

Under the co-applicant agreement between KCHC and CHCC, Palacios said CHCC had been managing the finances and the human resources.

But on May 1, she added, under the new administration system CHCC will no longer handling KCHC’s finances or the Human Resources aspect.

Commonwealth Healthcare Corporation Chief Executive Officer Esther Muña

For Muña, it will be the KCHC’s, as non-profit and no- government organization, responsibility to ensure that it performs well and manages its financial resources “with transparency and fiduciary responsibility to the community as there will be no further oversight by external entities such as CHCC or the Office of the Public Auditor to ensure conflicts of interest are avoided.”

In explaining her decision to fire KCHC executive director Vince Castro, Muña said under the co- applicant agreement it establishes that all employees of KCHC – including the executive director – are employees of CHCC.

In the same statement, she said all employees of the KCHC are subjected to CHCC’s Personnel Policies and Procedures, including termination of one’s contract with CHCC.

“The CHCC employee termination lies with the corporation itself. The Board of Directors of the CHCC has been involved in the discussions on the actions to terminate the employment of Vince Castro,” she said.

Moreover, she said the executive director of KCHC, as an employee of CHCC, is responsible for communicating actions and decisions regarding the health center to the CEO who reports activities to the CHCC Board of Trustees.

“Although CHCC supports KCHC’s desire to be independent, CHCC should have been a part of the decision making and a transitional plan should have been established far in advance to reconcile assets. shared by CHCC to KCHC and make clear arrangements for the relationship with the CHCC, including services provided by the hospital, moving forward.”

Palacios, on the other hand, believed that it is the KCHC’s authority to select, dismissed and evaluate the executive director for the health center and not the CHCC. Without elaborating, she added part of the reason why they decided to go independent because of policy differences between the CHCC and KCHC.

“We both have governing boards. We have different policy. The KCHC board may want this but the CHCC doesn’t agree.

All finances go to CHCC. Even though we approved our budget, everything goes to CHCC to process payment and others,” Palacios said.

It has always been KCHC’s plan and long-term goal to run the health center independently, according to Palacios.

“We mentioned this with CHCC and it was the right time now to do this application. We feel ready to go on our own. We have been operating for five years,” she said.

One of their goal in deciding to operate independently is to have better opportunities to expand the healthcare services, she said.

“The main mission is serve our community and to provide healthcare services. We are trying to follow the program in the grant requirement by providing affordable care to everybody. That is the main reason. It is always been our long-term goal,” she said, adding “our main goal is to transition smoothly, continue services, focused on the plan.”

KCHC’s also plans to open up satellite clinics in Tinian and Rota.

Palacios said they have sent letter to the CHCC board of trustees to discuss about the smooth transition.

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Lori Lyn Lirio
Lori Lyn C. Lirio is a veteran newshen having worked for the People's Journal Tonight for more than 10 years. She has a Bachelor of Arts in Mass Communications degree from the Lyceum of the Philippines University. She currently writes for the Marianas Variety, Saipan's number one community paper. .

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