Re-hired NHI consultant's fee 'not in $8.3m ball park'

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Minister of Health Dr Duane Sands. Photo: Shawn Hanna/Tribune Staff

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

KPMG, whose previous $8.3m National Health Insurance (NHI) fee was heavily criticised by the Government, has been re-hired for a sum "nowhere near that ball park".

Dr Duane Sands, minister of health, defended the accounting firm's new NHI consultancy on the basis that it was needed to perform "critical analysis" that neither the Government nor any of its agencies were able to perform themselves.

No figures were provided for KPMG's new fees, but Dr Sands said they were well below what the former Christie administration had committed to pay over the 15 months through to June 2017.

"The NHI Authority would have hired KPMG to do some of the critical analysis that could not be done in-house," the minister told this newspaper. "There was a requirement for technical expertise that did not exist in the NHI Authority.

"They had to get the work done, mindful of the excesses of the past, and I think it has helped quite a bit without the spend and burn rate seen previously."

When asked how KPMG's compared to those agreed under the Christie administration, Dr Sands replied: "They're not even in the same ball park."

Tribune Business raised the issue of KPMG's renewed NHI involvement after being informed that the accounting firm's executives had accompanied the NHI Authority's chairman, Dr Robin Roberts, and managing director, Graham Whitmarsh, in recent meetings with private sector groups such as The Bahamas Chamber of Commerce and Bahamas Insurance Association (BIA).

The move comes around one year after Dr Sands criticised the near-$14m in fees lavished on NHI consultants by the former Christie administration, more than half of which went to KPMG based on his 2017-2018 Budget presentation.

Pointing out then that these "huge sums" could have been better spent upgrading the Bahamian public health system's crumbling infrastructure, and eliminating personnel shortages, Dr Sands said KPMG had earned $8.383m between April 2016 to June 2017 through its work on NHI.

But, given its extensive NHI knowledge and a health practice with a global reach, KPMG's new engagement by the Government makes sense. However, some doctors have already privately voiced misgivings to Tribune Business about its new role given the mistrust over the NHI scheme that developed under the former Christie administration.

Meanwhile, Emmanuel Komolafe, the Bahamas Insurance Association (BIA)'s chairman, told Tribune Business that the industry had agreed to "go back and price" NHI's Standard Health Benefit (SHB) with the NHI Authority's consent.

The agreement comes after the BIA, in its NHI position paper last week, warned that the $1,000 annual premium for the SHB, NHI's basic package, may "grossly underestimate" the true cost of the scheme's benefits.

Calling on the Government to produce data and empirical studies that showed how it had determined the scheme's costs and employer/employee contributions, the BIA in particular questioned how it could set a $1,000 annual premium when the NHI Authority had yet to agree the fees that doctors and other healthcare providers will charge.

Mr Komolafe, though, disclosed that the NHI Authority had agreed to provide the BIA with the necessary information for the insurance industry to perform a proper actuarial study when the two sides met over the scheme.

"What we are going to do, and the NHI Authority has agreed with this, is to go back and price the Standard Health Benefit (SHB)," he told Tribune Business. "We will price it and provide them with that figure.

"They indicated they want to know what it will cost, they will provide the information, and we will cost it, price it based on the existing network of providers, with a new network of providers possibly emerging based on the fee schedule.

"We will price it based on the existing cost, fee schedule that exists in The Bahamas, and network that exists, upon receipt of information from the NHI Authority. They really want to know that number; it may be larger than their's, but it's a positive development."

Mr Komolafe added that the NHI Authority were also "open" to pre-approving existing comprehensive health insurance policies that contain most, if not all, the benefits proposed in the SHB package.

The BIA chairman said this would prevent both individuals and their employers, and their health insurance underwriters/brokers, from having to tear up existing coverage to fit in NHI's SHB package.

"They were open to the idea of pre-approving comprehensive health insurance policies that exist and have pretty much the same benefits as the SHB," he said. "If you look at it and it pretty much covers the SHB, we put on the table that you could pre-approve those plans rather than unbundle them. They were open to the idea and didn't oppose it."

The NHI Authority, in a statement on the issue, backed the BIA chairman's take, saying: "Bahamians do not have to give up their existing health insurance under the new NHI programme that the NHI Authority has proposed. If you already have private health insurance coverage, your coverage likely already includes the benefits required under Standard Health Benefit.

"For some, your coverage might change. If you are employed by an organisation that falls under the Employer Mandate with 100 employees or more, your benefits may be strengthened through the NHI Standard Health Benefit - and you would be sharing the cost of the premium with your employer based on your income."

Expressing optimism following the BIA's meeting with the NHI Authority, Mr Komolafe added: "If we work together we could come up with something that works well. I think there is a shared vision and all the points were taken on board, and they will leverage the expertise of professionals.

"This could be a plan that works. We may have to tweak the benefits package and make some adjustments there; we will see. There's still a lot of work to be done and details worked out. The high level information in the policy paper is good, but when it comes to how NHI works, there is still a lot to be done."