The heart of the matter

THE Office of the Public Auditor’s recent audit of the Medical Referral Services Office mentioned several (and usual) concerns regarding a critical government program. OPA also recommended the implementation of “standard operating procedures” and the establishment of “internal controls,” etc. “to  ensure an affordable, effective, and equitable program.”

Most of OPA’s key findings and recommendations are beyond dispute, but they are comparable to a description of an entire iceberg based on its tip. Still, it is an audit report after all and not a comprehensive study of the medical referral program. Hence, OPA did not mention that the medical referral program has been in existence since the U.S. administered the islands through the Trust Territory government. (From Variety’s Jan. 1974 issue: “The Trust Territory referred some 600 patients to hospitals outside the territory during the past year; most of them went to either Guam Naval Hospital or to Tripler [in Hawaii]. Although the number of actual referrals is not very great, the expense is high since most of these patients require special, and therefore expensive, treatment…. The billings are made to the TT Government, and payment is made from the health services budget. In most cases [TT] patients pay nothing for the medical care they receive….”)

OPA, moreover, didn’t look into the periodic controversies regarding the program’s funding issues since the Commonwealth government was inaugurated in 1978. (In his first State of the Commonwealth Address, the then-governor said, “Let us not fool ourselves. Let each one be fully apprised of the fact that U.S. standards of care will be accompanied by U.S. costs of care which are staggering.”)

We also note that on page 5 of its audit report, OPA stated that the “large variance between the appropriated amount and the reported expenditures” by the medical referral program “suggests that [it] has either been (1) unfunded through the Budget Appropriations Act…and/or (2) overspending its allocation.”  Yet on page 26 of the same report, OPA concluded that it was “the lack of effective internal controls [that] has led the [program]” to overspend.

According to the program director, however, “We incur a deficit in the first month of the fiscal year. Normally, about 22%  of our requested budget is appropriated. For example, if we requested $15 million, they will give us $2 million. So we are into deficit right away.” In FY 2020, he said they asked for $18 million, but only $2.2 million was appropriated. In 2019, he added, the program referred 1,997 patients to off-island hospitals for a total cost of about $15 million.

 “Standard operating procedures” and  “internal controls” may reduce the costs of the medical referral program, but it will still be a costly program.  As OPA has noted, the program involves extended medical care outside the CNMI as well as transportation, lodging and subsistence allowance for patients and escorts.

Government-funded medical referral is also considered a right by most of the voters who elect officials who ultimately make the key funding decisions for the government. As a long-time government official reminded lawmakers recently, “No matter where you put the medical referral program, it will always be a political issue because the patients will always reach out to their elected leaders.”

Some say that upgrading and expanding CHCC’s operations, staff and services should reduce medical referral costs. True. But it also means that the government will have to provide CHCC with more funding.

OPA, in any case, has provided the CNMI government with a sensible to-do list that should address some of the concerns regarding the program’s finances. But at the end of the day — to quote the administration’s favorite phrase — the CNMI’s elected officials will always have to find more ways to fund medical referrals and/or public health because the other options — drastic cost-cutting measures, new and/or higher “sin” taxes, banning “unhealthy” food items and drinks, “mandating” healthy lifestyles — are politically unfeasible. Of course, there will be politicians who may want to prove us wrong. Please feel free to do so.


Zaldy Dandan is the recipient of the Best Editorial Writer Award of the Society of Professional Journalists, and the CNMI Humanities Award for Outstanding Contributions to Journalism. His three books are available on

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