The Medical Bill: Paying For National Health Care

The issues surrounding the introduction and implementation of a National Health Insurance scheme in The Bahamas – scheduled for January 2016 – are complex and emotive. In the third of a series of articles this week Dr Robin Roberts looks at the challenges in generating the revenue to meet the exorbitant costs of the plan.

So here is our challenge: how do we generate revenue to cover the costs of providing health care services for our Bahamian people? And one that measures up to the quality of care we have come to expect as our neighbours to the north.

First World medicine – only the best will do! There are certain realities we must acknowledge:

  1. We must not lose sight of the fact that the Bahamian people are already paying megabucks for health care services – currently $250m, 15 per cent of the government budget, we pay already through our taxes. It’s not that the government is giving us something for free that we now have to pay for; we have paid for it already.

  2. New monies for health projects to more taxes. Our indirect taxation is already a major burden; the corporate community and the middle and upper class income earners feel the brunt of it. Concerns of additional taxation leading to diminishing returns and economic stagnation are real. Consider the additional expenses and increase over the past five years to do business in The Bahamas:

• Business licence fees

• Facility licence fees

• Professional registration and licence fees

• National Insurance Board (NIB) social insurance payments, add-ons

• Unemployment

• Pharmacy

• Solvency prevention

• BEC utility costs

• And now Value Added Tax (VAT).

An inflationary economy looms in the midst of a population where 20 per cent of home mortgages are in arrears. The cost of doing business in The Bahamas is high; we are losing our competitive edge on the region.

Now we are about to add health insurance – an additional business expense if we are to introduce the social insurance scheme, or just increase current NIB contributions, both of which the employer pays 50 per cent.

  1. Bahamians are major consumers of everything, including health care. The system must build in cost containment from the onset. We will be riding the waves of the American exponential growth of health care costs without the benefits of a healthier population to show. In the developed countries, many have better health outcomes at half the costs.

  2. The great waste in our health care system. It is estimated by the Institute of Medicine (IOM) that over $700 billion is wasted in health care delivery in the United States. In The Bahamas, our health care system can be defined by all the elements of wastage outlined by the IOM in the US: lack of care co-ordination, lack of effective prevention and health promotion programmes, high absenteeism and inefficiencies. Many would question whether we need any new revenue at all – we just need to get rid of the waste.

We need to get value for money. This would be a great argument, if only it was so simple. It costs money to get rid of inefficiency and waste too.

  1. The value of public-private partnerships: much capital is required if we are to establish health care services in the realm of modern medicine. Medicine does not come cheap. Medical care is expensive and quality medical care is damned expensive. The new imaging technologies are multimillion ticket items and new drugs such as life-saving cancer pharmaceuticals are extremely expensive.

So, too, is the cost of the new health providers: physician specialists, nurses, the allied health professionals, health care managers and administrators. Vocational and health education expenses are costly and many health care providers face significant student loans long before graduation. Our current government revenue already accounts for over 80 per cent personal emoluments. Where will we get the revenue to pay for all the new staff required?

This is where public-private partnerships have great merit. When we travel to Miami to shop and we need transport for a few days, we don’t lease or buy a car; we rent one. The money allocated for travel is consumed purely to acquire the services of transportation, not its ownership. Could we not consider health care services the same way? Rather than the burden and expense of owning, operating and maintaining an MRI, the government may see wisdom in purchasing only the services.

This can provide major savings. It is imperative though that in its outsourcing of select services, the government must be a prudent negotiator and with the best interest of the Bahamian public. When the deal is done, the government can’t pay more to rent than to own. Incentives, performance measures, accountability and transparency must be the order of the day.

Outsourcing, the promise of economies of scale and tax incentives could project for significant reduction in costs, rendering defined health services provided more efficiently and effectively in the private sector, in a public-private partnership. The people can get real value for money: getting more and better care for less.

  1. The need for institutional strengthening and infrastructural advancement prior to implementation. The people need more than a promise if they are to spend more for what they get now, especially noting the realities that as taxpayers, they have paid already for services they are receiving. There is a lot more that needs to be done before implementation.

There is a new Critical Care Block – it needs to be functional and to demonstrate its effectiveness and efficiency. The Princess Margaret Hospital and the Rand Memorial Hospital need to be upgraded for inpatient care; the open Florence Nightingale wards are outdated. Medical records and the modes of documenting, retrieving, storage and access to patient information must be upgraded. There will be no improvement in co-ordination and integration of care without better medical records.

It is untenable for any modern health care system not to have an electronic medical record system. We need to inculcate a culture to eliminate medical errors and improve patient safety. We need to advance modern scheduling programmes to decrease waiting times for clinic appointments, hospital admissions and surgical procedures.

The challenge facing The Bahamas

Designing a health care system for The Bahamas is a major challenge. We have no income tax and seek to extract more from a population with a culture of evading taxes and who perceive they are overtaxed already. Significantly more funds are needed to pay for advanced technologies and pharmaceuticals, upgrade of services and the physical plant, and the increasing costs of more skilled and specialised physicians, nurses and allied health providers. These are the fixed costs; the variable ones – higher expected utilisation and the impact of consumerism in our choice of medical care services are yet to be added to the equation.

There is a possible windfall in savings if we could eliminate the waste in the delivery of our services, better co-ordinate and integrate our chronic disease care and foster health prevention and promotion as the foundation of our delivery system. These, however, are not insignificant costs and need capital infusion as well.

What is evident to me is that none of the four health care models outlined earlier in the series are applicable to The Bahamas, not by even a stretch of variability. We are seeking to emulate and design a health care system but we are at a starting point, which far supersedes that of any existing health care system when they were created. While we recognise the need to improve our health and our delivery systems, there is an elephant in the room – why do we need a new national health insurance system? We have one now: it just needs to be reviewed, revised and reinvented.

The introduction of national health insurance programmes is driven historically in countries due to lack of accessibility, availability and affordability of health care. In the US, while the poor, unemployed and elderly are covered by the Medicare and Medicaid systems, over 40 million people have no health care insurance coverage – primarily employed individuals who cannot afford the insurance premiums. (The Affordable Care Act seeks to reduce this uninsured population and the initial results are showing much promise).

The introduction of national health insurance in Germany in 1883 emerged from the great need for affordable health care for the exploited “lumpen proletariat” created in the industrial revolution. In Great Britain, the National Health Service was the answer to the health care woes after World War Two; Canada with its vast land mass, indigenous peoples and need for affordable access and availability of care for all, entrenched these desired principles in its Canada Health Act in 1973.

The rationale for introducing a national health insurance scheme in The Bahamas is one of equity and affordability. People when in need cannot get the care they need when they need it, due either to (i) the shortcomings in the public health care system – shortages of supplies, lack of equipment availability or just overwhelmed and underfunded services; or (ii) because they lack monies to pay for care directly out-of-pocket, or for private insurance coverage or can’t afford to pay the extra charges.

With everyone mandated to contribute, National Health Insurance will spread the risk and thus reduce the costs of health care premiums and improve access for everyone. There will be more monies available for funding to purchase required equipment, supplies, and to finance the desired institutional improvements that will lend to more efficient health care delivery, and thus patient outcomes.

Will national health insurance improve access and equity in health care in The Bahamas? Are our health care woes a matter of more funding? How much funding is needed and will we ever have enough? Herein lies the proverbial question of any national health insurance scheme. We must acknowledge that health care in 2015 is no longer a simple matter of an essential need and having the resources to meet that need, it’s about choosing a desired health care option.

Health care has been transformed to a commodity; as such, it conforms to all the characteristics of a market product. It’s a paradigm shift and sets the stage for the final part of this series.

Dr Robin Roberts is a consultant urologist and Director and Senior Lecturer at the University of West Indies School of Clinical Medicine and Research in The Bahamas

ON FRIDAY: The buyers and the sellers –

the economics of

providing health care for developing countries.


ohdrap4 4 years, 1 month ago

this is a good series, but at the end of the day, people will be upset if they get payroll tax to pay for the care of illegals and civil servants., i do not mind paying but i do not wish to be excluded, till age 65, as i am now, because i may not live to be 65.


karrie 2 years, 10 months ago

An unbalanced system will automatically lead to problems. When taxation on health care is too high the effects will show in other various parts of the economy. Nobody has anything to gain from it. Since a good health care system is crucial, people need access to treatments, medicines and services, the best we can do is work on building up a flawless system. How easy is for somebody to get a cancer treatment or simply a http://tonalin.com/science/">conjugated linoleic acid dosage for instance. These are simple questions that can give clues on where things need to be improved.


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