The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government’s main National Health Insurance (NHI) advisers have described as “non-existent” fears that the scheme’s implementation will negatively impact the Bahamian economy, arguing that the current system was “more damaging”.

James Cercone, Sanigest Internacional’s president, told Tribune Business that the “extremely dysfunctional health insurance market” that exists currently - where Bahamians were paying “high premiums” in return for relatively minimal benefits _ was “more damaging to the economy” than NHI will ever be.

While NHI was still years away from requiring contributory financing, Mr Cercone suggested this would likely take the form of a payroll tax, with the 3 per cent rate split equally between employer and employee.

Given the existing National Insurance Board (NIB) ceiling, Mr Cercone suggested that the “maximum contribution” to NHI would effectively capped at around $1,200 per year.

With the 50/50 split between employer and employee, he said this would translate into a $600 contribution for each.

“Most of those people would already be paying at least $6,000 a year for private health insurance,” Mr Cercone told Tribune Business. “I don’t see how you can make the argument that it [NHI] will have an impact on the economy.

“For me, it’s non-existent. It’s such a reasonable contribution rate for that [NHI] package at that point in time. It’s clear it’s a very small contribution to cover the beneficiary pool.”

Mr Cercone was backed by Sanigest Internacional consultant, Etoile Pinder, who said: “The economic argument for me fails completely.”

Their comments will likely be disputed by many in the Bahamian insurance industry and private sector, who have harboured decade-long concerns that NHI’s implementation will impose further costs on business, thereby retarding economic growth at a time when the Bahamas can least afford it.

However, Mr Cercone and Ms Pinder added that NHI should also “improve the labour market in the country”.

They suggested that the scheme’s universal coverage would enable small and medium-sized companies to better compete with large firms for skilled employees, as the latter would no longer have the advantage of solely being able to offer health insurance benefits.

Ms Pinder said the Christie administration “really did listen” to the private sector’s concerns that NHI would be ‘too much, too soon’ after Value-Added Tax’s (VAT) implementation.

In response to this, the Government decided that NHI would be rolled-out in phases, and that the scheme would be non-contributory for several years.

The initial stages will be financed from the Government’s Consolidated Fund (the Bahamian taxpayer), a move Ms Pinder said had been backed by the Pan-American Health Organisation (PAHO).

“The PAHO representative said primary care was the real first step, and that there’s definitely enough remaining fiscal space for primary care,” Ms Pinder said. “There’s no need to start with contributions. Let’s transition.”

Mr Cercone confirmed that the decision to go with a non-contributory scheme in the initial stages was “based on what people, businesses were saying”.

He added that it would work in NHI’s favour, as Bahamians would not expect to receive all benefits and services from day one without contributions.

“From our perspective it’s mostly about shifting existing [government] funds into areas where we will get more value for money,” the Sanigest president said of NHI’s initial financing method.

“We’re not saying we need additional money, but if we spend existing money more efficiently we will get better results.”

Mr Cercone said Sanigest’s analysis of the Bahamas’ health indicators and financing showed that while this nation had one of the world’s highest per capita healthcare spends, at around $2,200 per person annually, treatment ‘outcomes’ frequently lagged most other nations.

This, he suggested, showed the Bahamas was not receiving ‘value for money’ in terms of quality treatment outcomes in relation to what it was spending on healthcare per person.

Mr Cercone said that while the Bahamas was spending a sum equivalent to 9.7 per cent of GDP on healthcare annually, the likes of the UK and Canada were spending much less and getting better patient outcomes.

Mr Cercone identified access and equity as further issues, adding: “The more you drill down, it’s lack of access because of finances.”

While just 15 per cent of the poorest quintile (20 per cent) of Bahamians were covered by private health insurance, he added that this figure rose to 70 per cent for the wealthiest 20 per cent of the population.

Mr Cercone explained that NHI’s universal coverage would expand the insured Bahamian population, improving access to healthcare. In turn, Sanigest believes that the increased number of patients able to access primary and high-end treatments will enable healthcare providers to reduce their prices/margins will still maintaining profits. The latter will be driven by volume under NHI, not price.