Private Sector Seeks ‘Five-Year’ Financing Proposal For Nhi


Tribune Business Editor


The Bahamian private sector wants to see a ‘five-year Plan’ for how National Health Insurance (NHI) will be funded, after Prime Minister Perry Christie ensured “catastrophe” was avoided.

Edison Sumner, the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) chief executive, said that while the Government’s ‘phased’ approach to NHI was welcome, the business community wanted to know how the scheme will be financed in the medium to long-term so it can make advance preparations.

Prime Minister Perry Christie, at least for the moment, eased private sector fears when he announced in the Budget communication that NHI would be implemented in a manner that was “practical and affordable”.

Pledging that no new or increased taxes would be needed to finance the scheme in the short-term, Mr Christie also promised that NHI would be introduced via a ‘phased’ approach that matched new healthcare services would the country’s ability to afford them.

“We’re glad the Government has decided to do it as a phased-in approach, because if they out this in completely from day one, it would have been a catastrophe,” Mr Sumner told Tribune Business.

He also backed the Prime Minister’s pledge to work with private health insurers, and physicians and healthcare professionals, on the design and implementation of NHI as “a good thing and a step in the right direction”.

Mr Sumner added, though, that despite the positives stemming from the Prime Minister’s remarks, there remained several NHI-related questions that needed answering.

“Despite the fact it’s going to be phased in, we still need to look at what phase one entails, and if they’re re-purposing funds they are currently using that are now earmarked for NHI,” he told Tribune Business.

“We’d like to be fairly involved in the process, and know how the phasing works. We’d like to know over a five-year period how NHI will ultimately be funded so that the private sector and employers can prepare for any eventuality.”

The 2015-2016 Budget indicates that the Government is initially financing NHI via an extra $60 million allocation, plus the regular $200 million-plus it grants to the Public Hospitals Authority (PHA).

The Budget ‘line item’ for NHI shows $274 million for 2015-2016. The extra $60 million allocation is projected to be repeated over the next two Budget cycles, implying that the Government is spending $180 million over a three-year period to strengthen the existing public sector health system and its infrastructure in readiness for NHI.

Mr Sumner expressed hope that the Government may realise cost savings and efficiencies “if they can consolidate the three to four health systems in the country, and be able to use resources to strengthen and improve the current infrastructure, which has to be done before NHI is implemented”.

The Prime Minister had previously dropped several hints that the Government was unlikely to go with a full-blown NHI plan from its January 1, 2016, implementation day due to the impact this was likely to have on an economy still grappling with Value-Added Tax (VAT).

The Government’s Costa Rican-based consultants, Sanigest Internacional, had given the Christie administration three NHI options, ranging in price from $362 million to $505 million and $633 million, depending on the breadth of the benefits package to be offered.

But the Bahamas Insurance Association (BIA) warned that based on claims and membership data submitted by five of its health insurer members, the figures provided by Sanigest were likely a gross underestimate of NHI’s ultimate cost, and the burden it will impose on working Bahamians and their employers.

Even excluding illegal immigrants, the BIA said: “The health industry believes that Sanigest’s NHI cost estimates may be as much as a third below the actual cost - a significant difference of some $300 million.

“Based on our analysis of insurance industry data and administrative costs for the National Insurance Board (NIB) in 2011 and 2012, we have estimated that the Government’s proposal will cost between $895 million and $965 million to implement, with the higher number being the cost to cover the entire population.”

The BIA pointed out that total Bahamian healthcare spending in 2013 was $810 million or 9.7 per cent of gross domestic product (GDP), and added that the Sanigest financial estimates were “too low” even if provider fees were controlled.


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