The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Insurance Association’s (BIA) $895-$965 million National Health Insurance (NHI) cost estimates may be a “conservative” 20 per cent under-estimate, its chairman has revealed to Tribune Business.

Emmanuel Komolafe told Tribune Business that the BIA figures did not include co-payments by insured patients to doctors and hospitals, which could account for one-fifth of Bahamian healthcare spending.

He emphasised that the $262-$332 million disparity between the BIA’s figures and those supplied by the Government’s NHI consultants, Sanigest Internacional, “warrants independent investigation” - as the Christie administration has agreed to do.

The BIA chairman also reiterated that it did “not want to fight” the Government on healthcare reform, but was merely seeking to ensure the Bahamas was “not in awkward position post=-implementation.

“That is the issue from the wider economic perspective,” Mr Komolafe told Tribune Business of NHI’s costs. “The Prime Minister has acknowledged there’s a huge disparity between the costs Sanigest gave him, and what we said was the cost.

“Ours may be a little conservative as it does not factor in co-payments. That may be 20 per cent of the price. Because the disparity, it warrants an independent investigation.”

While the Government has recalled the PricewaterhouseCoopers (PwC) accounting firm to conduct such an analysis and study, its work has yet to properly start.

This is because the BIA wants to ensure it receives, and has access to, PwC’s final report - especially since it will be providing half the necessary data. And the insurance industry is also baulking at the Government’s bid to ‘gag’ all parties and cloak the process in complete secrecy, so that no information is released to the public.

If the 20 per cent ‘under-estimate’ is correct, the BIA’s NHI cost projections would thus increase to between $1.074 billion and $1.158 billion. Those figures are similar to estimates from one doctor, who has argued that to match Canada’s $1.55 billion per capita healthcare spend, the Bahamas should spend $1.55 billion per year.

In contrast to the BIA’s estimates, Sanigest has placed a $400 million price tag on the Vital Benefits Package - the basic level of health insurance to be offered under NHI. It also placed a $633 million cost on NHI’s expanded benefits package - a figure well below the BIA’s.

Differences over how much NHI will initially cost exploded into the open earlier this year, after the BIA used the Ministry of Health’s own example of Aruba to estimate a $947.3 million price tag - a figure squarely in the range of its initial estimates.

This produced s sharp riposte from Sanigest president, James Cercone, who accused the BIA of “comparing apples with oranges” because it had based its estimates on Aruba’s Expanded Benefits Package - not the smaller, less costly Vital Benefits Package that NHI will initially employ.

The Government expects to finance the Vital Benefits Package from existing tax revenues in its Consolidated Fund and the ‘re-purposing’ of existing spending.

Mr Cercone previously told Tribune Business that the $400 million would come from the $260 million allocated to the Public Hospitals Authority (PHA) in the 2015-2016 Budget; the $30-$40 million received by the Department of Public Health; and the $60-$70 million currently spent by the Government on insurance premiums for civil servants and public sector workers.

Yet this does little to reassure Bahamian companies about having to fund NHI via increased taxation over the medium to long-term, especially given that Sanigest recommended that a payroll tax of up to 5 per cent be employed to finance the scheme’s $633 million expanded benefits package.

Mr Komolafe, in an interview with Tribune Business this week, said the BIA was only seeking to educate and contribute to constructive debate.

“Let’s think this thing through before we embark on any initiative so that we do not find ourselves in an awkward position afterwards,” he told this newspaper.

“From an economic perspective, we’re talking about costs. And the model we adopt for universal healthcare will drive the cost.

“Cost is an issue, because if our estimates are wrong, somebody has to pay. It potentially eliminates any involvement by the private sector, because companies cannot run on losses.”

Mr Komolafe said that should the Bahamas opt for an ObamaCare-type system, where health insurance was subsidised for those who could not afford it, the cost would be different to that for the proposed NHI system.

“It’s just putting the facts out there. It is what it is,” Mr Komolafe said of the role played by the BIA and other private sector stakeholders in the NHI discussions.

“We don’t want to get into any fight with the Government. We just want to help develop something that works for the Bahamas. We hope to move the dialogue forward and get the stakeholders working together.”