The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The outcome of the Government’s National Health Insurance (NHI) fee negotiations with doctors will likely “narrow the remuneration gap” between the public and private sectors, the Bahamas Insurance Association’s (BIA) chairman is predicting.

Emmanuel Komolafe told Tribune Business that private health insurers were watching the talks on NHI compensation “with keen interest”, given that this would have a knock-on impact on the doctors’ fees they paid on behalf of their clients.

He said the Government’s effective ‘takeover’ of much of the Bahamian healthcare industry would result in the NHI fee schedule, which is currently being hammered out with private physicians, setting a new ‘base’ or model for the wider market.

Mr Komolafe explained that whatever was agreed would impose pressure on private health insurers to reduce the compensation they paid to doctors, narrowing the gap between the remuneration the latter received from the public and private sectors.

The BIA chairman added that this process would be aided by the way NHI is structured, as the law underpinning the scheme requires persons with private insurance to “exhaust benefits” under those plans before they can access care via the Government’s proposed new scheme.

As a result, NHI and private insurance would operate as two parallel schemes with two different payment rates - a situation that was unlikely to last very long due to the inevitable competitive pressures.

“The introduction of NHI will place the Government in a more significant position to control, shape and move the healthcare industry in the Bahamas,” Mr Komolafe told Tribune Business.

“Additionally, the private health insurance industry is watching negotiations between the Government and healthcare professionals with keen interest.”

He explained that “the Government’s role as a dominant player” would have “significant impact” on the amount and nature of fees paid to doctors and other NHI service providers, with this effect not limited to the scheme alone.

“The remuneration for services in both the public and private healthcare sectors will be impacted by such an environment,” Mr Komolafe explained.

“Insurers are expected to consider the NHI fee schedule in determining the reasonable and customary charges that determine payments to healthcare providers. The market will eventually adjust to the rates agreed with by the Government, and there will be pressure on the healthcare system to deliver acceptable service using that fee schedule.

“At a minimum, a narrowing of the gap between payment rates adopted by private payers, including private health insurance companies, and the Government, including public patients, can be expected. It is just the way established economic concepts work in reality. Pressure will come to bear on the provider payment rates as the Government’s payment schedule could emerge as the new model in this regard.”

Private physician resistance to the Government’s preferred NHI payment method, capitation, has resulted in the latter offering a choice between this mechanism, the current ‘fee for services’ system and a hybrid of the two.

However, some doctors have complained that the rates being offered by NHI represent up to a 70 per cent cut on what they currently receive.

Mr Komolafe said NHI’s introduction would also impact the coverage and benefits packages offered by private Bahamian health insurers, which in turn would impact premium prices and employer packages.

He warned that “some insurance and financial risks” would likely be shifted from the private health insurers to doctors under NHI, and pointed out that premiums were determined by overall healthcare costs.

Mr Komolafe, meanwhile, said comparisons between NHI and the US’s Affordable Care Act, or ObamaCare, were inappropriate given that the schemes were structured differently.

He explained that in the US, given that government healthcare programmes, such as Medicare and Medicaid, typically paid less than the actual costs incurred by doctors, these physicians compensated by charging private patients higher rates.

“Statistics show that the gap between private and public reimbursement rates has been widening in the aftermath of the introduction of the Affordable Care Act (ACA) in the US,” Mr Komolafe said, before quickly pointing out that the same thing could not happen in the Bahamas under NHI.

“We will have a different scenario within the proposed model in the Bahamas,” the BIA chairman explained. “Under the Bahamas’ model, there is no mandate that requires all Bahamians and residents to register for NHI, as is the case under the ACA, and there are no proposed subsidies for private health insurance plans.

“Additionally, Section 21 of the NHI Act requires privately insured persons to exhaust the benefits under their insurance plans before they are able to access care under the NHI scheme.

“The resulting effect is that you have two parallel systems with two different payment systems or rates. Such a system is likely not be sustainable for very long.”