The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

National Health Insurance’s (NHI) near-$500 million impact on Bahamian GDP in 2040 was yesterday branded “peanuts” by the Democratic National Alliance’s (DNA) leader, who described the projections as “pure speculation”.

Branville McCartney, responding to the KPMG accounting firm’s projections on the economic impact from implementing NHI’s $100 million primary care phase now, said much would need to go right for the forecast to become reality.

“$500 million in 2040 will be no money; it will be peanuts. It will be like $20 million today,” Mr McCartney told Tribune Business. “In order to get there, there are so many things that have to go right.

“If they’re saying NHI will make the economy $500 million bigger, I would hope the economy is much better than that [by 2040]. That seems to be very vague and very long-term.”

The DNA chief said the KPMG study itself conceded that any NHI economic benefits would “take a generation” to fully materialise, and would not be realised - especially by Bahamians currently aged 50 or over - in the short-term.

He expressed doubts that the Christie administration had the ability to properly execute NHI’s primary care phase, something that was essential to realising KPMG’s projections.

And Mr McCartney said that despite initially conceiving NHI in 2002, at the start of its first term in office, the Christie administration was still unable to answer key questions regarding the scheme some 15 years later.

He listed these as how NHI will operate, how much it will cost, and who will pay for it.

“For them to say something like that, it plays into this PLP election campaign propaganda,” Mr McCartney told Tribune Business of the KPMG study. “And this is if we get it right. With this PLP government, we’re not going to get it right.

“We don’t know how much it’s going to cost, as so many different figures have been thrown out there. It’s going to take hundreds of millions of dollars to get the [public healthcare] facilities alone up to standard.

“Ensuring that we have supplies of the necessary drugs and equipment is further hundreds of millions of dollars, and determining how that is paid for is still a question the Government cannot tell us or answer.”

The Government and KPMG, its latest consultants/advisers on NHI, have repeatedly stated that the NHI primary care phase is equipped with a $100 million budget.

Tribune Business understands that the Government is targeting late April/early May 2017 for the NHI launch, helpfully coinciding with when the general election is likely to be called.

This newspaper was also told last week, when it met with KPMG representatives and officials from the NHI Secretariat, that the accounting firm has a much narrower Terms of Reference (TOR) than the scheme’s original consultants, Sanigest Internacional.

KPMG has only been charged with developing the primary care phase, and Tribune Business was given the impression that the Government will move more slowly on a full NHI roll-out than when Sanigest was involved, only adding services and benefits when the healthcare system and economy could bear it.

The Government has also ruled out new and/or increased taxes to pay for the primary care phase, with the KPMG report stating that $40 million of the primary care phase funding would come from reallocating existing spending at the Department of Public Health and Bahamas National Prescription Drug Plan.

KPMG admitted that the remaining $60 million would be “new government expenditure”, but Mr McCartney said yesterday it was impossible to definitively say whether that sum was drawn from the Government’s Value-Added Tax (VAT) revenues.

Although answers have been provided to his questions, the DNA leader continued: “How is it going to be paid for? NHI has been floating around since 2002, and Christie still can’t give us a final answer on how it will work.

“This government spoke about NHI in 2002, and in 2017 it cannot tell us how it’s going to operate, they can’t tell us how much it’s going to cost, and who’s going to pay for it.

“The only thing they can do is get this accounting firm to say $500 million. I find it amazing that they could even come out with those financial projections. The estimates are pure speculation.”

Dr Duane Sands, the FNM candidate for Elizabeth in the upcoming general election, said it was “significant” that KPMG acknowledged the $500 million ‘bigger economy’ return from the primary care investment would take a “generation” to materialise.

He added that there were “many caveats and disclaimers” in the study, and accused the Government of “cherry-picking” the parts that best support its case.

The KPMG study is predicting that implementing NHI’s primary care phase now will make the Bahamian economy almost $500 million bigger in 2040, with the larger GDP output coming from a healthier, more productive workforce that contained more workers.

The report said NHI’s primary care phase would drive an extra 5.1 per cent increase in household consumption by 2040, due to the larger economy and improved productivity.

And it forecast that Bahamas-based companies would experience a 1 per cent productivity increase by 2024, along with a reduction in insurance premiums and improvement in worker mobility.

The KPMG study added that NHI primary care implementation would in 2030 make the Bahamian economy $248 million, or 2.7 per cent, larger than it would otherwise be if the scheme was not implemented.

And it estimated that NHI would make Bahamian GDP, or economic output, some $358 million or 3.7 per cent greater in 2035 than if the scheme was not executed. These figures rose to $485 million, or 4.8 per cent, by 2040.

Finally, it also estimated that based on current taxation rates, NHI’s primary care introduction would generate $110 million in extra per annum taxes for the Government by 2035 as a result of the greater GDP growth

Mr McCartney and his party are among those backing the concept of universal health coverage (UHC) for the Bahamas, but not the Government’s implementation method or the NHI financing mechanism.

“We believe persons should have access to the best medical care possible, not just the rich but the poor and the middle class,” he added.