By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Insurance Association's (BIA) chairman says the $10 million to create the NHI Authority is "quite excessive", and suggested more money should be directed to front-line healthcare services.

Emmanuel Komolafe, while questioning how the new government will make the 71.5 per cent cut in NHI funding work, said proposed changes to the scheme could encourage insurance industry innovation and enable it to cover more Bahamians.

He compared the $40 million allocated to NHI in the 2017-2018 Budget with the $100 million that was assigned by the former Christie administration for primary care alone, together with a further $24-$30 million for catastrophic care.

"The implications of the change in Budget allocation for NHI is worth considering," Mr Komolafe told Tribune Business. "One hundred million dollars was originally projected for the primary care phase, and $24-$30 million estimated for selective catastrophic care. The question arises as to how the existing programme, with ongoing enrolment, will be impacted seeing that the allocation for NHI in the 2017-2018 Budget is $40 million."

Dr Duane Sands, minister of health, previously told Tribune Business that the former government never properly identified or sequestered a source of funding for NHI, meaning that the scheme's launch had to be funded from the Government's Consolidated Fund.

He added that the Minnis administration was now left with the challenge to fund NHI.

"According to the Minister of Health's contribution to the Budget debate, $10 million will be spent on the establishment of the NHI Authority; a new government agency, and an amount which is quite significant), $15 million on primary care and $15 million on catastrophic care," Mr Komolafe said.

"This represents an 85 per cent, or $85 million reduction, in the allocation for primary care, and 62.5 per cent or 50 per cent ($9 million or $15 million) reduction in the allocation for catastrophic care.

"The projected cost for the establishment of NHI Authority had not been disclosed publicly before now. However, an expenditure of $10 million on the forming of a new government agency - and hiring new persons in the public sector - seems quite excessive,and one would have expected that more of that sum will be allocated to the delivery of actual healthcare to individuals rather than on staffing an additional government agency."

Still, Mr Komolafe added: "In my opinion, with proper reform and realignment of duties within the existing agencies or departments within the Ministry of Health and the Insurance Commission of the Bahamas, the objectives of the NHI Act can be achieved without the additional costs or layers of bureaucracy.

"This is an important conversation that ought to be had, and a project worth undertaking, when we consider that $429 million has been allocated to state-owned enterprises in the 2017-2018 budget."

"The fundamental question is what our national fiscal dilemma, and the reduced allocations for NHI mean, for the NHI programme going forward. What adjustments will be made to fit the established budget, and implement an affordable as well as sustainable programme?"

Mr Komolafe said the BIA was informed at a meeting with Dr Sands and senior NHI officials that the number of consultants working on the scheme has been reduced to just two persons from the KPMG accounting firm.

The NHI public relations campaign has also been revised in line with the new government's objectives, and Mr Komolafe said reforms to the scheme's model could prove beneficial if implemented by the Minnis administration.

The BIA chief, in his interview with Tribune Business, said the adjustments could help to keep healthcare spending in the Bahamas through the creation of a new product that allowed individuals and businesses to purchase - and choose - insurance they can afford.

"Our meeting with the Minister of Health focused not just on challenges posed by the NHI scheme, but also on opportunities for collaboration between the Government and the insurance industry," Mr Komolafe said. "One of the items discussed is the feasibility of developing an insurance product branded as Bahamian, with a primary focus on the provision of healthcare locally.

"This product will ideally be developed in conjunction with other stakeholders and as part of the NHI programme. A stated goal in embarking on such a venture will also be the building of local capacity in the healthcare sector, which could benefit the Bahamian economy in the medium to long-term."

He explained: "The majority of private health insurance companies already have processes in place to encourage their clients to obtain healthcare in the Bahamas, with the need for proper referrals as well as reimbursement provisions. However, this new product will potentially be an addition to the existing suite of products within the market, but with an incentive to keep the healthcare dollars at home.

"The details will have to be worked out with local providers, fees will have to be negotiated and tax incentives - such as the removal of the over 10.5 per cent tax on health insurance premiums - provided by the Government to make the premiums for such a product affordable."

Mr Komolafe continued: "We will also have to ensure that individuals continue to maintain the flexibility - and availability - of local and overseas choice by having a wide product range to suit their needs. A revamped NHI product, with buy-in and cooperation of all stakeholders, provides us as a nation with a unique opportunity to increase access to health insurance across our archipelago of islands. However, this can only work if all stakeholders make sacrifices and the Government maintains its traditional role as legislator, regulator and enforcer of rules without getting into a business."