We Need to Pay Attention to What Is Going on in Puerto Rico

I’ve been doing a lot of reading about Puerto Rico since I agreed to go down there to help in the Zika outbreak. According to most media reports, the situation in Puerto Rico is quite dire from a financial and demographic standpoint. Crime is high, yes, but it’s not any higher than Baltimore, where murder is an almost daily thing. I’ve said before that Puerto Rico might as well be our 51st State, but we sure treat it like a foreign country.

From the Wall Street Journal:

“A decadelong recession has left one in nine residents out of work and roughly half dependent on the cash-strapped government for health care. Net migration to the U.S., where Puerto Ricans can move with no restrictions, was 250,000 so far this decade. The island’s labor force shrank 20% in the past 10 years, compared with 5% growth in the U.S.

Puerto Rico’s population slide is the worst since the Census Bureau began its first tally in 1920. Mario Marazzi, who runs the Puerto Rico Institute of Statistics, says the continuing decline might be rivaled only by the extinction of the indigenous Taíno people after the arrival of Spanish settlers in the 16th century.

…

As more people leave, the government faces greater pressure to cut jobs. The number of students in public schools is 40% lower than it was a decade ago, while the number of teachers has grown. Puerto Rico operates as many correctional facilities as it did in 2004, despite a 26% drop in inmates.

Puerto Rico ended up in its current situation because of a string of haphazard policies by federal officials going back decades. On top of that, local leaders have struggled to cut spending and boost tax collections. Instead, they borrowed to make up for recurring revenue shortfalls.

Federal tax credits long cultivated a robust manufacturing sector, steering the island away from agriculture after World War II and into a major hub for pharmaceutical and medical-device makers. Then Congress ended those incentives. When the last expired in 2006, many high-paying drug makers packed up for Singapore and Ireland.”

So, like with almost every big financial crisis, the current crisis in Puerto Rico could have been avoided, or at the very least prevented. Of course, the 2008 “Great Recession” didn’t help things. If you think you had it bad in the “Rust Belt,” then magnify it by a lot on the island.

In terms of healthcare, things are also bad. From the New York Times:

“The first visible sign that the health care system in Puerto Rico was seriously in trouble was when a steady stream of doctors — more than 3,000 in five years — began to leave the island for more lucrative, less stressful jobs on the mainland.

Now, as Puerto Rico faces another hefty cut to a popular Medicare program and grapples with an alarming shortage of Medicaid funds, its health care system is headed for an all-out crisis, which could further undermine the island’s gutted economy.

On an island where more than 60 percent of residents receive Medicare or Medicaid — an indicator of Puerto Rico’s poverty and rapidly aging population — the dwindling funds have set off outpourings of concern among patients and doctors, protest rallies and intense lobbying in Washington.

And while the crisis is playing out most vividly today, its cause dates back decades and stems, in large part, from a vast disparity in federal funding for health care on the island compared with the 50 states. This disparity is partly responsible for $25 billion of Puerto Rico’s $73 billion debt, as its government was forced to borrow over time to keep the Medicaid program afloat, according to economists.”

People in Puerto Rico pay the exam same rate in taxes (though not Federal Income Tax) than people on the mainland, but the Medicare/Medicaid reimbursement level is less than that of any of the States or the District of Columbia. That whole tax thing may in itself be something that needs to be looked at, but you go tell people who are seeing their economy in the dumps that they have to pay more taxes. Go ahead. Get back to me on how well it went.

The strain on the healthcare system is one of the reasons why the request has gone out for help with Zika. Puerto Rico is in the “goldilocks” zone for Zika, and this has translated to a ton of cases in a relatively short time. (There have also been outbreaks of Dengue and Chikungunya, so you know the mosquitoes are there and they’re biting a lot of people. Couple that with a failing health infrastructure, and it’s all a recipe for disaster.

There are still many uncertainties about Zika, and there are uncertainties about how the government in Puerto Rico will deal with the budget shortfall, the exodus of residents (and physicians) to the mainland, and the issues of unemployment and social decline that come with a declining economy. It’s going to take a lot of time and a lot of work to get to a place that is, well, better. I just hope that we on the mainland don’t forget about our 51st State.