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Op-Ed: Moving Forward, Part 7

The public hearing on the LBJ fee increase held two Fridays ago (June 8) was poorly attended, but the discussion was hardly a waste of time or uneventful as the low turnout might suggest otherwise.

Most if not all of the non LBJ staff attendees expressed serious opinions on the fee increase or offered solutions. Some of the solutions offered are outside the scope of LBJ authority but well within the lobbying influence of the board. 

This was the profile of the LBJ CEO’s audience — although limited in quantity, it was a quality-sufficient cross section of the community for purposes of the hearing (if my opinion counts):

The non LBJ staff attendees included two lt. governor candidates, one Fono representative standing for reelection, a lawyer, at least two business women, at least one current or former educator, a recently retired army command sergeant major with background or interest in health care, a village farmer, a businessman and political activist, two or three other community members, and myself.   

Aside from eight to ten LBJ staff (doctor, nurses, and administrators), two board members including the chairman of the hospital board attended the hearing.

The first public hearing on LBJ fee increase held last year was better attended as the emotionally charged consumers of health care showed up in force to contend the proposed 400-500% increase in resident and non-resident fees.

By contrast, the current proposed facility fee schedule appears reasonable for residents but “penalizes” non-residents by charging them full cost of service. This explains the low turnout in the hearing held last Friday by residents.

And by maintaining the price of drugs at $10 per prescription, LBJ shows sensitivity to the dependency of both residents and non-residents on their drugs. 

It must be pointed out that there was scarce participation (if any) by non-residents via attendance or expression of opinion on the subject matter in either hearing. 

This non participation implies the lack of confidence among non-residents, due to their non-voting status, in their ability to influence the decision on LBJ fee increases.

Thus, they leave their predicament in the hands of residents and policymakers; unless they can somehow muster the guts to stage a revolution a la “occupy LBJ” denouncing “taxation” without representation, as suggested by the aforementioned businessman and political activist in the hearing. 

Like the first hearing, only one Fono member attended. Unlike it, the chairman of the board entertained canceling the hearing as the number of community attendees didn’t meet the necessary quorum of 25 participants (according to the chairman). It was a wise decision on his part to hold the hearing, as I didn’t think the small crowd would have dispersed quietly without being heard. With an opinionated village farmer and a vocal political activist in the house, I can assure you there would have been a revolution at LBJ that Friday if the hearing didn’t take place!

Given below are some key points deducted from the CEO’s presentation and ensuing discussion worthy of further meaningful consideration by all concerned; especially current policymakers, candidates standing for public office in the 2012 election or selection (Senate), and the voting public and village and county councils.


The CEO’s presentation accentuated three needs:

To raise fees, citing the differential between the national health expenditure per capita (NHE) of the US ($7700) and AS ($461);

To improve facilities and services given Medicare and Medicaid requirements; and,

The pressure at the national level to cut federal spending, which would impact AS harshly and immediately.

He went on to cite several health care statistics which compares LBJ health care favorably against stateside hospitals (with the exception of one area).

This remarkable achievement supports international evidence where the US health and health care outcomes pale in comparison to its industrialized peers despite outspending them by far (median top 30 industrialized countries NHE of $3100 vs. US NHE of $7700, with Japan posting one of the lowest at $2800).

With this fact in mind — high health care expenditures do not necessarily equate to better health outcomes — LBJ should determine what minimum NHE is needed to meet Medicare and Medicaid standards; project a bare bone budget based on realistic and relevant factors, and adjust fees accordingly (assuming the proposed budget is approved and LBJ subsidy is paid in full and timely).


The $5.8 million loss of revenues in 2011 (because ASG didn’t pay the subsidy) left LBJ with bills to pay from last year and zero in the tank (reserve fund account).

Thus the increase in fees is understandable; what isn’t understandable is the contention by the administration that current year revenues cannot be used to pay previous year expenditures.

In other words the administration cannot not pay the LBJ subsidy it didn’t pay last year or the compounding loss (including Medicaid loss) of $5.8 million.

This event (which appears to be an annual occurrence) exposes the weakness of the territory’s free medical attention mandate and renders the law meaningless, because LBJ liabilities from last year don’t just disappear into thin air. They need to be paid or there will be severe shortages of services, drugs, and supplies at LBJ. 

As I’ve suggested before, the last legislative session 2012 (next month) or the next Fono needs to review this law and make necessary amendments to guarantee that the LBJ subsidy is paid in full and on time, and changing the wording from “free” to “affordable” medical attention, to correctly reflect the subsidized nature of health care in the territory. The word free is misleading let alone annoying; because free care as it exists in the territory entails human suffering.


A community member asked why LBJ doesn’t sell health insurance like some hospitals in the states; while a business woman suggested a self-insurance plan to help non-residents pay the high cost of health care at LBJ. 

Insurance is a very useful financing tool that’s being used in least developed countries (LCDs or third world countries), developing countries, and OECD countries. It’s an efficient way for consumers to pay for their health care and hospitals to receive the cost of or part thereof providing health care. 

Basically there are two types of plans — private plans where profit and administration costs determine the premium, and public plans where the key objective is the efficiency of making and receiving payments between the consumer and provider. 

The private insurance industry plays a major role in financing health care in the US which helps explain the high US NHE. On the other hand, the prevalence of public plans or regulated private plans in most OECD countries, including Japan is a key explanation of the much lower NHEs experienced in these countries.

The one we (CAAS Project- Coverage for All in American Samoa) proposed for the territory is a public plan, which was originally proposed in the 1970s and subsequent years by the local Department of Health based on federally funded studies done in those years. But the political will wasn’t and still isn’t there unfortunately; and that is mainly due to the “free” medical care our forefathers gifted us in 1900 in the Deed of Cession.

The willingness of local residents and nonresidents to buy into an insurance plan is amply demonstrated by their participation in limited benefit hospital and accident insurance that’s available locally. Thus instituting a public plan for the territory would mobilize resources people of all income levels are willing to pay for their health care — where participants receive care and LBJ recoups its costs.

It’s incumbent on the LBJ board to review the law that established the hospital authority and see if the LBJ can set up a pre-pay self-insurance plan for its customers, if the next Fono and administration fail to set one up through legislation for the territory. In the event the LBJ board is a subscriber to the “free medical care-forefathers-deed of cession” philosophy, then let’s be patient and consider the next option.

(Part 8 of Moving Forward will continue to discuss the issues presented at the June 8, 2012 LBJ hearing by the hospital administration in support of the proposed fee hikes.)