Wednesday, October 11, 2017
By NEIL HARTNELL
Tribune Business Editor
THE Minister of Health yesterday pledged the Government will “not sink the economy” by implementing a National Health Insurance (NHI) model that could cost $1.26 billion at full roll-out.
Dr Duane Sands told Tribune Business that the Minnis administration will not allow the scheme to become “a runaway entitlement or expenditure programme”, after the IMF estimated that its predecessor’s plan could cost between 6.5-10.5 per cent of GDP with “expanded coverage”.
Backing the Government’s plan to ‘cap’ NHI spending at $40 million in the 2017-2018 Budget, the Fund’s full Article IV report reiterated: “Expanding coverage under the National Health Insurance (NHI) programme is not affordable without new revenues to fund it.
“NHI began providing free primary care to all legal citizens in May 2017, with the plan of expanding to full coverage within five years. The current administration capped the allocation to NHI in the fiscal year 2018 budget to $40 million (about 0.4 per cent of GDP). Expanding coverage could lead to annual fiscal costs in the range of 6.5 and 10.5 per cent of GDP.”
Based on the $8.4 billion GDP figure employed by the Department of Statistics prior to the recent 28 per cent upward revision, the IMF’s figures imply that the Christie government’s NHI model would have cost the Bahamas between $546 million to $1.26 billion per annum at full roll-out.
These sums would have been financially unsustainable for the cash-strapped Public Treasury and struggling Bahamian economy, something that has been recognised by the Minnis administration in its response to the IMF.
“The authorities concurred with staff’s assessment that expanding coverage under NHI is not affordable without first identifying new revenues to fund it,” the Article IV report added. “For this reason, they have capped the allocation in the current budget to $40 million.”
Reinforcing this position, Dr Sands told Tribune Business: “Let’s be very clear: We are not going to have this be a run away entitlement or expenditure programme.
“Whatever we are able to do within the confines of the Budget allocation, and even that’s going to be adjusted according to revenue performance, that’s as much as we’re going to do.
“As the economy improves, and we identify inefficiencies in the healthcare system and are able to free up additional funds, and feel it appropriate or justifiable to levy charges on the public for the services, then we can allow it [NHI funding] to increase.”
The Minister, though, reiterated: “In the absence of a clear-cut funding mechanism, there’s no way we’re going to allow this thing to come in and reach such a point.
“I understand the insatiable appetite for healthcare services, but to sink the economy on the basis of that insatiable demand is irresponsible.”
Dr Sands said Bahamians spent more per capita on healthcare than most other countries, and needed to gain more ‘value for money’ to justify its status as “one of the top spenders”.
“We have to determine how to get more value for expenditure, rather than throwing more money at the problem. We will have to spend more money, but until we eliminate the waste it makes no sense to increase expenditure until we close the holes,” he told Tribune Business.
“Nor does it make sense to go to the public and ask them to bear another tax when many people are finding it impossible to meet their daily living requirements, whether that’s rent, mortgage or children.
“It’s [NHI] a wonderful concept, but we have a tremendous amount of work to do to improve efficiency in healthcare, get services up to speed, and make sure there’s intrinsic value in the healthcare system. We can make it even better, but that has to be tied inextricably to efficiency and improvement in the product.”
Dr Sands, meanwhile, said it was impossible to justify retaining all 39 NHI customer service representatives whose contracts recently expired when scheme enrollment had dropped from a monthly peak of 13,842 in May to just 74 in October.
He explained: “When you look at the numbers, even if we took 2,000 enrollees for the month of September, and it’s considerably less than that; to have 39 people working full-time and enrolling 2,000 people over the course of that month, that’s not a whole lot of registrations per customer service representative.
“It ends up being less than two persons per customer service representative per day. It’s an awfully inefficient system.”
Data seen by Tribune Business shows that NHI enrollment dropped off significantly compared to before the May 10 general election, when 7,307 persons registered in April and 13,482 in May.
Registrations dropped to 4,282 in June and 2,397 in July, as the Government’s plans to restructure NHI became known. Enrollment fell further in August and September to 1,983 and 1,503, respectively, before hitting a low of 74 in October.
As a result, the Government is only re-hiring 18 of the 39 customer service representatives whose six-month contracts have expired.