Nhi: ‘We’Re Going Where No Man Has Gone Before’


Jeffrey Beckles


Tribune Business Editor


The Chamber of Commerce’s top executive yesterday said it was “critical” to get National Health Insurance (NHI) right first time, adding: “We’re going where no man’s gone before.”

Jeffrey Beckles, backing the Minnis Cabinet’s decision to send NHI’s financial model back for further study, told Tribune Business that such “fine tuning” was vital given that the “credibility” of all parties involved - the government, NHI Authority, the private sector - “is on the line with this project”.

The NHI Authority, which will oversee the proposed universal health coverage (UHC) financing mechanism, failed to win Cabinet approval for its model at the first attempt. It is now working with the Ministry of Finance to validate the assumptions and numbers underpinning the scheme’s pricing and costing - something Mr Beckles believes will “give us the best chance to be successful”.

“It becomes extremely important that it’s fine tuned, particularly since the timeframe for implementation is much shorter than it was a year ago,” the chamber chief executive said. “That’s a good thing.

“It is critically important we get it right for the simple reason that we’re going where no man has gone before. What’s best for us is if we have a sound, tested model, it should give us the best chance of being successful.

“If the model is wrong and we don’t get it right it becomes problematic, not only to roll-out but execute. I think they’re [the government] doing the right thing. As in the old Chinese proverb, it says measure twice, cut once. If we’re able to do that it’s a giant step in the right direction.”

Mr Beckles spoke out after Dr Duane Sands, minister of health, revealed to Tribune Business last week that the NHI Authority will have to “give it another go” in after failing to win Cabinet approval for the scheme at the first try.

He disclosed to this newspaper that the Government wants answers to multiple questions raised during its first presentation to Cabinet on the reformed health care financing plan.

Graham Whitmarsh, the NHI Authority’s managing director, subsequently conceded that the scheme administrator has “work to do” to convince the Government that its financial assumptions, modelling and pricing calculations are accurate enough to ensure NHI does not suffer multi-million dollar financial shortfalls or over-burden the economy.

Mr Beckles emphasised that the Minnis administration had not rejected NHI as a healthcare financing concept, but rather “wants to be sure the financial model is in line with its objectives”.

“There’s been a tremendous amount of work done by the NHI Authority, and we give them all the credit,” he added, “but the Cabinet has said go back and run some more scenarios, and when you come back we need to be satisfied that it’s something we can all get behind and push. It should be a model that all of us can get behind and support.”

The Chamber chief executive described NHI’s implementation as “a fluid exercise” and “not written in stone to the point” where all stakeholders know what the scheme will look like in six months, two or even three years.

“Everyone involved has said this transition, this execution, is going to be an evolutionary process over a period of time until we get it fine tuned,” Mr Beckles explained. “It’s good seeing Cabinet saying: ‘Let’s do our best to get the model right at the start’.

“If it’s a fluid situation and there are going to be changes, if we enter with the best possible scenario it gives us the chance to be successful.... We support the idea of re-hashing it and thrashing it out a bit more to make sure we have the best possible scenario.

“At the end of the day, it’s a long-term partnership we’re engaging in for the betterment of the country. We fully support the effort and idea to ensure the finer details are fleshed out to give us the best product we can execute, bearing in mind we’ll be called on to make adjustments in the transition [to NHI]. Better to make any adjustments from a position of strength rather than weakness, and sooner rather than later.”

One of the major queries raised by both healthcare providers and employers is how the NHI Authority has been able to price the scheme, and cost the SHB’s annual premium at $1,000 - split between employers and employees - when it has yet to agree a fee schedule with both doctors and medical facilities, the basic determinant of how much healthcare will cost.

The greatest fear raised by the Bahamas Chamber of Commerce and Employers Confederation (BCCEC) and others in the private sector is that if the NHI Authority gets its calculations wrong, and the $1,000 SHB premium severely undervalues the scheme’s price tag, businesses and their employees could be burdened with ever-increasing levies to finance its escalating costs and cover any shortfall.

Mr Beckles told Tribune Business that all parties were reliant, to different extents, on NHI achieving its objectives. “One of the things we must always remember is our credibility as a Chamber, private sector, NHI Authority and the Government is all on the line with this project,” he said.

“People have placed a lot of confidence in our capacity to get it right and, based on that, we must make sure our collective effort ensures we have the best possible product to put on the table.”

Tribune Business revealed last month that NHI’s true cost was closer to a range between $200m to $236m, with the much-touted $100m-$130m price tag only covering “the government’s exposure” to the scheme.

Healthcare for the 206,000 persons covered by the employer mandate will be financed through their annual $1,000 Standard Health Benefit (SHB) premium, NHI’s minimum level of care, which is to come from a combination of 1.5 percent of their annual gross salary and employer contributions.

This cost is separate, and on top of, the $130m that will be incurred by the Government (Bahamian taxpayer) in financing NHI coverage for the 160,000 persons not covered by the employer mandate.

The NHI Authority has said the $130m cost for persons outside the “employer mandate” will be financed via “a diverse mix of revenue sources”, one of which is NHI’s “existing budget allocation” that stands at $20m.

That leaves a further $110m to be located, but the NHI Authority said it would come from VAT paid on private health insurance premiums; a “reallocation” of resources from the Public Hospitals Authority’s (PHA) existing $216m budget to cover services NHI will now provide; the $8-$10m that a “sugary drinks tax” may raise; and the scheme’s own “risk equalisation” method.

However, neither the “sugary drinks tax” or the reallocation of VAT on health insurance premiums has been legislated or approved. And some 80-90 percent of the PHA’s budget goes on staff costs, with the Princess Margaret Hospital operator also consistently facing an annual $30-$40m funding shortfall.


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