The Tribune

Richard Coulson says the government is completely unprepared to implement a National Health Insurance scheme next month

During a recent trip to George Town, Exuma, pictured, I drove past the new government clinic - or rather the pink wall and gates behind which sits the handsome clinic edifice, still unopened and unusable.

The contractor, a venerable firm from Grand Bahama, told me he had been retained in April 2012 and after many change orders completed his task in April 2014, delivering a 30,000 square feet structure comprising a mini-hospital, with accident and emergency facility, operating theatre, delivery room, X-ray space, dentistry, lab, even a morgue - everything the people of the Exuma islands need for healthcare - at a cost of $16 million.

But the Public Hospitals Authority (PHA) has never installed the furniture and equipment or assigned the trained staff essential for operation. The landscaping is gorgeous, but the parking lot is empty and the front door remains shut with a security guard who cannot give an opening date. Exumians still catch a flight elsewhere with a sprain or a toothache.

By contrast, on my return to Nassau, I found in my computer an illustrated website brochure (www.health242.com) entitled “National Health Insurance Bahamas” bearing no author or address but apparently prepared by government with the help of its advisory firm, Sanigest Internacional. Its smoothly-written publicity is clearly designed to make Bahamians feel good about the pending “universal health coverage” and it does indeed include undeniable statistics about the rising cost of present health treatments and the plight of alleged 200,000 uninsured citizens.

But nowhere do its vague generalities inspire confidence that the government plan for National Health Insurance (NHI), which Perry Christie has mounted as his own pony, can effectively solve our present deficiencies, particularly as it is scheduled to enjoy some form of miraculous kick-off this coming January. It mentions a four-phase implementation schedule:

1 “Strengthening the

health system”

We are told that this “has already begun”. For evidence of this efficient beginning, I observe the Exuma Clinic, a facility left sitting empty with no revenue and incurring maintenance costs some 17 months after completion.

2 “Registration of beneficiaries

into a newly created NHI

system … this will begin

in January 2016”

Now in mid-December not a single piece of legislation has been tabled to create the “NHI system” in which to register; not a single registration form or beneficiary membership card has been prepared; not single bit of explanation about registration has been released. When Value Added Tax (VAT) came into effect a year ago, all similar details had been completed during months of careful planning, permitting a crisp launch on January 1. NHI is fated for a January birth as nothing more than shapeless statement of intent.

3 “Provision of primary care

services for the entire population

… without any co-payments”

This is the crux of the NHI concept. No date is given (although April has been hinted), but clearly nothing can be done until “primary care services”, a widely elastic term, are defined. Only such a definition will determine the cost the services and the key issue of how they are to be financed. The insurance and medical associations report that government has not yet come close to creating a workable definition and assigning true costs.

4 “Provision of certain

financially catastrophic services

which most impact the burden

of disease”

Although not so stated, this can be handled as virtually a separate programme, just as private insurance companies offer different policies for catastrophe care than for primary care. But, again, “catastrophe” will need to be defined.

As a public relations exercise, the brochure naturally glosses over any discussion of costs, implying that primary care will be a miraculous goody with no cost to anyone - the standard socialist sales pitch about “free” government services. Answering the question “How will I access my doctor and pay for services?” the cheery answer is given “Your card will be swiped … there will be NO payment and you will receive your care free of charge … Instead, the claim will be sent directly to your chosen insurer.”

It’s not stated how this insurer (either a private company or, heaven help us, “the newly created (when?) public insurer” will recoup its cost of paying the claim. It is inconceivable that government can simply pay these costs by finding a new line item in the present budget, since it is already paying an annual subvention of over $200 million to the PHA to cover its continuing deficits - an accumulated $73 million in 2013 according to the recent PHA $25 million note-offering prospectus.

A new source of revenue simply must be found to finance NHI, in the form of a tax or charge on all beneficiaries. This is coyly admitted with the statement “There will be no contributions initially” with no indication of what happens after this free initial period.

Of course, it is impossible to predict at this point what the charge will be, since the consultant accountants PriceWaterhouse Coopers (PwC) have been unable to produce any figures in the lack of any clear definition of “primary care services”. But again the brochure repeats the myth that NHI will be “an added benefit at no cost to you”. That’s given as the reason participation will be compulsory - “NHI will require all legal residents to enroll”.

That goes even further than the US Affordable Care Act (“ObamaCare”), which allows Americans to opt out by paying a reasonable penalty. We are told that “there will be very little change to the private health insurance industry’’ - except, of course, they will be required to pay for “primary care services” defined strictly by NHI fiat rather than by their own experienced judgment.

As for regulation of NHI, no less than three tiers are set: first, an Ombudsman (unnamed), to hear and resolve complaints, surely requiring substantial staffing; second, the National Health Insurance Commission (members unnamed) with “oversight of quality, patient safety and access issues”; and third, the Ministry of Health, with “strengthened oversight to ensure access to appropriate technology and that value-for-money is being obtained by NHI.”

No estimate is given for the cost of this administrative machinery, but a large part must fall within the PHA since its Princess Margaret Hospital will be at the sharp end of actually treating thousands of new patients making NHI service demands. Not only that, the PHA will have to abandon its annual block-payment government subvention and get paid from the more complex service-based fees.

The record raises doubt that the PHA is up to the job. Not only has it failed to open the elaborate George Town mini-hospital, its prospectus shows that it can only produce financial statements two years out of date, and even those unsigned and stamped “Draft - Subject to Changes.”

Should a prospectus so qualified have been allowed for a public bond issue?

The brochure suggests that NHI should be regarded confidently, just as we accept the National Insurance Board (NIB). But their functions are quite different. The NIB does a good job of taking in cash and then paying out cash, while NHI will be taking in cash and then paying for medical services, a far more demanding task facing the ever-changing technical and emotional variables of heathcare.

A recent, non-political, article about ‘ObamaCare’ tells how that vast health insurance scheme is suffering the withdrawal of major US insurance companies because of unsustainable losses. The costs of the medical benefits they are obligated to reimburse (example: in vitro fertilisation for 50-year-old women) are simply not matched by the premiums they are permitted to charge, a salutary lesson for any mandated universal coverage scheme.

I do not doubt that a feasible scheme can and should be created for The Bahamas. But the brochure I have read - to date the only effort at public information - is incomplete and indeed misleading, and reveals government’s total unreadiness to face the hard questions about NHI. Mr Christie will have to get far better advice from his experts, and from private health insurers, before he can ride his pony to the starting gate.

• Richard Coulson is a retired lawyer and investment banker born in Nassau and from a long line of Bahamians. He is a financial consultant and author of A Corkscrew Life - adventures of a travelling financier. Comments on this column are welcome at rcapmashy@gmail.com