By NEIL HARTNELL
Tribune Business Editor
The public health sector’s financial deficit has been cut to $18m-$25m, a Cabinet minister said yesterday, with National Health Insurance’s (NHI) expansion “a matter of timing”.
Dr Duane Sands, pictured, minister of health, told Tribune Business that the increased 2019-2020 budget allocations to the Public Hospitals Authority (PHA) had seemingly narrowed the typical $40m funding gap it faced on an annual basis.
The PHA’s subsidy has increased from $216m to $223.456m, accounting for the total rise in the Ministry of Health’s budget allocation from $293.915m to $301.973m. Dr Sands revealed that software necessary for the PHA to properly codify treatments, and bill patients and insurance companies accordingly, had been included in the 2019-2020 budget.
With state-owned enterprises (SOEs) now required to cover their costs, and become more self-sufficient, Dr Sands said the PHA and its healthcare facilities - the Princess Margaret Hospital (PMH), Rand Memorial and Sandilands Rehabilitation Centre - had no choice but to collect the fees they are legally mandated to by law from patients that can afford to pay.
“You would have seen by the Budget communication that all of the quasi-government corporations now have to become more self-sufficient,” he told Tribune Business. “That kind of signals that we are going to have to head in a different direction in order to have expenditure and revenue, and expenditure and funding, provided for.
“It is going to have serious implications in terms of the Public Hospitals Authority (PHA) going after charges and fees.... There’s still going to be a deficit, and since we have the legal authority - as a matter of fact, there’s a legal mandate - to collect gazzetted fees and we have not done a good job, but we have to do a much better job going forward.”
Dr Sands said the PHA’s deficit “looks more like $18-$25m” as opposed to the traditional $40m, but he added: “We have to revise our strategy based on the new final version of the Budget. I suspect there will be some upgrades from the current position as we dissect the Budget line by line with even more focus.
“Each ministry will have to go back and look at their Budget in terms of the Ministry of Finance’s determinations and adjudications, and we’ll have to reprioritise and determine what implications it has.”
The NHI Authority’s budget allocation has not changed beyond the $20m provided for last year, even though its revised proposal called for the expanded scheme to be launched in July 2020 - taking it into the following fiscal year.
Dr Sands, who revealed that the NHI Authority did not spend its full $20m allocation in the current 2018-2019 fiscal year, suggested that the upcoming period’s funding needed to be viewed in the context of the Government’s desire to impose no new or increased taxes on Bahamian companies and individuals given that this will likely be more than the economy can bear.
“The minister of finance, in the introductory line of his budget presentation, would have said no increase in VAT and no new taxes of any kind,” he told Tribune Business. “I think we have to be guided by that statement.
“The Budget presentation spoke for itself. The overarching theme is to control expenditure. NHI certainly remains. Whether we escalate the services a month from now, six months from now, depends on the outcome of discussions with my colleagues. We have made a commitment it will happen; it’s just a matter of timing. All these things are subject to Cabinet approval and agreement.”
The initial NHI policy document called for a January 2020 launch of contributions for companies with 100 employees or more. That was to be followed by an expanded roll-out to include all businesses with an annual turnover of $100,000 a year or more in January 2021.
However, this was changed to one, single launch for all on July 1, 2020, as the mandatory roll-out for all businesses with over $250,000 in annual revenues. The $1,000 Standard Health Benefit (SHB), the NHI basic care package, is supposed to be funded by a payroll tax mostly split between employer and employee.
The NHI scheme’s progress, though, was halted earlier this year after the Cabinet demanded more verification of its financial figures and estimates to ensure there will be no funding shortfalls and that the plan does not over-burden Bahamians.