PDP lawmaker calls for gov’t to buy Grupo HIMA’s hospitals
By The Star Staff
Popular Democratic Party Rep. Ángel Matos García is urging Gov. Pedro Pierluisi Urrutia to seriously consider acquiring the Grupo HIMA Hospital system, which filed for bankruptcy in August to restructure well over $400 million in debt.
The hospital has already informed the court that it is selling its Fajardo and Bayamón facilities.
Grupo HIMA San Pablo, one of Puerto Rico’s largest hospital systems, filed for Chapter 11 and is seeking a sale process for its assets. The hospital system was forced to declare bankruptcy after it was unable to renegotiate its debts.
Grupo HIMA consists of several entities such as Grupo HIMA San Pablo Inc., Centro Medico del Turabo Inc., HIMA San Pablo Properties Inc., Portal de Caguas Inc., Jocar Enterprises Corp., Jerusalem Home Ambulance Inc., Host Security Services Inc., CMT Development LLC and IA Developers Corp., which all filed for bankruptcy. However, according to a statement from HIMA President and CEO Armando Rodríguez, there are additional related companies, subsidiaries and nonprofit organizations supported or promoted by Grupo HIMA.
The last available appraisal reports for the five operating units were completed in 2019 and provided aggregate real property values of $242.3 million for the real estate components of the businesses, Rodríguez said.
Matos García noted that “Puerto Rico faces a health crisis, and our privatization model has collapsed.”
“We should explore the alternative of a universal health model, so we could start by acquiring these hospitals so that the government can directly offer health services to citizens,” the lawmaker said.
The bankruptcy of the Grupo HIMA represents one of the largest on the island in the past three decades, with a total debt of $472.27 million, 18% more than initially estimated. The debt is divided into $274 million of secured debt, $156.39 million of unsecured debt, and $41.88 million of senior debt, Matos García said.
The government creditors include the State Insurance Fund, the Puerto Rico Electric Power Authority, the Puerto Rico Aqueduct and Sewer Authority, the Municipal Revenue Collections Center, and several private creditors. The HIMA San Pablo Group is the second-largest hospital system in Puerto Rico.
The genesis of Grupo HIMA’s recent bankruptcy filing, analysts have said, can be attributed to a history of disparate statutory treatment for Medicare and Medicaid programs and payments to Puerto Rico compared to the mainland states, the effects of the 2017 hurricanes, the COVID-19 pandemic, and the loss of revenues caused by the closing of health insurers and lawsuits.
Puerto Rico is also facing a fiscal crisis that resulted in the government and other public corporations filing for bankruptcy in 2017 to restructure close to $70 billion in debt.
Matos García pointed out that a government acquisition would be in line with Joint Resolution 50-2023, authored by Sen. Juan Zaragoza Gómez, which urges the Department of Health to carry out a funded study to evaluate organizational models in the provision of health services, including a universal health program, and a search for adequate financing to provide health insurance to currently unprotected citizens.
The study would also analyze budgetary and fiscal costs, total health expenditures, participation in health insurance, federal provisions, comparisons with other jurisdictions, necessary legal changes, interaction with federal health programs such as Medicaid and Medicare, and alternatives to universal health systems, including nongovernmental payers.