The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government "wholeheartedly agrees" with the IMF's National Health Insurance (NHI) warning, a Cabinet minister saying: "We can't spend money we don't have."

Dr Duane Sands, minister of health, told Tribune Business that the Bahamas would "absolutely" suffer a further credit rating downgrade had NHI continued without any specific funding identified for it.

He said the Minnis administration's strategy was to extract the significant savings it believes lie within the existing public healthcare system before looking at new taxes to finance NHI, adding that the 'value for money' currently enjoyed by Bahamian taxpayers "leaves a lot to be desired."

Dr Sands was speaking after the International Monetary Fund (IMF) warned that any expansion of the NHI scheme launched by the Christie administration was unaffordable without new tax revenues to finance it.

"We agree wholeheartedly with that position," he told Tribune Business of the IMF. "The decision to cut the Budget for NHI reflected a degree of fiscal conservatism or prudence in that we could not see the wisdom of extending benefits that we don't have the financial headroom to pay for.

"We have a very elaborate scheme that lacked one minor component, which was how to pay for it. The decision we have made is that every decision we make as an administration, as wonderful and progressive as they may be, has to reflect a level of financial responsibility."

K P Turnquest, deputy prime minister and minister of finance, added that the IMF was merely the latest in a long line of Bahamian and international observers to point out that the NHI scheme left by the Christie administration was "unsustainable".

"It was introduced by the last government with no plan as to how it would be funded," he told Tribune Business. "It's safe to say that the IMF has commented, as well as Moody's and others, that the plan brought forward by the previous government was unsustainable in the current design, and needs to be re-engineered if it is to go forward."

Pointing to the Government's targeted 10 per cent recurrent spending cut across the entire 2017-2018 Budget, meanwhile, Dr Sands said it was vital that all initiatives "eliminate the shortfall between expenditure and revenue".

"There's no way we're going to pursue a $100 million, $200 million, $400 million programme; a 'whatever' programme that does not have a palatable means of financing," he added.

"Everyone could use an extra $1 million there, an extra $2 million here or $5 million for somewhere else. If we continue to walk down that road, a downgrade is not only likely, but is absolutely going to happen and the consequences of that are too harmful to consider."

Dr Sands indicated that the Government is planning to take action many in the medical industry have called for, namely to strengthen and improve the existing public healthcare system before it looks to implement NHI and ways to finance the scheme.

"There are so many things that have to be corrected in healthcare," he told Tribune Business, "that I have made a public statement that before we go to the public and ask them to bear another tax, our product as to be even better, and improve efficiency, service and the public perception of value."

Dr Sands said there was "a tremendous amount of internal introspection" currently going on within the public healthcare system. As an example, he disclosed that Princess Margaret Hospital (PMH) was "critically" assessing its pharmaceutical procurement and administrative processes.

"We realise we need to make some fundamental changes in the way we procure medicines," he added, making sure that the process delivered value for patients and taxpayers, and eliminated waste.

Dr Sands said the assessments went beyond just medicine procurement, and added: "Built into the healthcare system already is a significant amount of savings that can impact NHI before we ask the Bahamian people to bear an additional tax. I don't think the public needs to be concerned that this administration is planning to implement a tax to pay for NHI."

Pointing out that the $2,500 per person, per year that Bahamians spent on healthcare was more than for most countries, the Minister said: "What we get from that leaves a lot to be desired.

"This is not about spending more money. This system has evolved to what it is. It is pretty good, but it can be better."