Settling on a Healthcare Model for The Bahamas

by Larry Smith

Over the past 50 years, the world has moved away from the issue of equitable access to figuring out how to sustain healthcare services in the long-term.

And as the Bahamas is about to embark on a compulsory government-run health plan, there is growing evidence that similar systems elsewhere are already staring at financial disaster.

The social health insurance system that our government is touting is based on the French model, which the World Health Organisation rates as the best in the world. But the French system is imploding:

"Our health system has gone mad," Health Minister Philippe Douste-Blazy told a parliamentary commission a couple of years ago. "Profound reforms are urgent."

He was referring to the fact that demand was out of control. French patients could visit as many doctors as they liked, ask for whatever treatment or drugs they liked, and get most of the cost reimbursed by the state. Private add-on insurance policies, or user fees, covered the rest.

Looming bankruptcy forced the government to make some changes last year. They included higher contributions, more out-of-pocket costs, curbs on drugs and services, and measures to reduce fraud and abuse of sick leave.

In Britain, from 2000 to 2003, the National Health Service budget increased by over 20 per cent, but productivity rose by less than 2 per cent. The British state-run system is unique in the western world in its size and scope. No other healthcare provider rivals it - and no other has a million people on its waiting lists.

Guaranteed access to healthcare for all is a theoretical feature of the British system, but not one that it actually delivers. It will be the same here. Rationing is rationing, whether it is based on ability to pay or lack of availability. And the privileged can get what they want in either case.

Local doctors have been responding to the government’s proposal since the anticipated costs for a Bahamian national health scheme were made available last month. They say the commission’s $235 million a year price tag is hopelessly unrealistic.

To paraphrase the doctors: In order for our health programme to be self-sustaining, as it is said to be, it must be costed accurately. Just saying it will work is not a solution – it’s a political edict. We should eat such a huge meal in small portions, starting with renovation of our existing health infrastructure.

It will cost up to half a billion dollars just to expand our public hospitals and clinics to meet the expected demand, and no health service will be able to give Bahamians unlimited care and treatment as government spokesmen are claiming. There will always be limits to what the system can provide.

Healthcare consumes about 16 per cent of economic output in the US. Most European countries spend about half that - with Germany, France and Switzerland spending the most on their social health insurance programmes.

Canada and the US had similar private health systems until the mid-1960s, when the Canadian government began a tax-funded universal healthcare programme. The US is one of the few developed countries without some form of guaranteed health insurance for every citizen. Americans must buy private insurance unless they are disabled or over 65, when Medicare kicks in.

A 2005 report by the international consulting firm, PriceWaterhouse Coopers, explored health systems around the world. Hundreds of public and private sector executives and “thought leaders” were surveyed to put these issues in a global perspective.

That report says healthcare is threatened by rising demand and cost, uneven quality and misaligned incentives: “If ignored they will overwhelm health systems, creating massive financial burdens and devastating health problems.”

The study found that healthcare systems were converging worldwide, and only a minority of those surveyed believed that a tax-funded system was sustainable. Everyone agreed that costs were out of control, with Medicare in the US expected to go broke by 2019, the French system on the verge of bankruptcy, and the British system facing low productivity and huge deficits.

So it is rather disingenuous for our leaders to claim that a 5.3 per cent payroll tax (split between employers and employees) on about half the population will be able to sustain such a massive new government-run entitlement programme – especially since it will also have to cater to tens of thousands of illegal immigrants.

This is all the more so when we consider that the National Insurance Board, which will run the health service, already spends more than it takes in – and almost a quarter of that spending is for administration. You know – salaries, offices, supplies, transportation and perks.

There is no denying that all healthcare systems have funding problems. So it is counterproductive to assert at the outset that ours won’t – especially when a lot of our resources will be spent on state-run facilities and civil servants. We already know that state-run facilities don’t work, and neither do most civil servants.

Even in systems where healthcare is primarily tax-funded (such as Europe and Canada) only a small minority of experts in the PriceWaterhouse survey favoured that approach.

“In principle, a market-driven system is better to achieve a cost-effective delivery system,” according to a German hospital CEO. “But access to the public health insurance system has to be open to everyone and primary healthcare has to be guaranteed by the state.”

In Germany, where the public health system is financed by a payroll tax, the contribution rate has risen to over 14 per cent from 8.5 per cent when the programme was launched in the 1960s.

A true market in healthcare may not be practical if we are to achieve universal coverage, experts say, because government has to provide a safety net for the most vulnerable, as well as services in remote areas. But there should be no question that consumers need to understand the true costs and value of medical care, and take more responsibility for their own health.

The Bahamian programme has been developed by international civil servants working with local officials to achieve a political objective. The real goal, many say, is to raise government revenue by sugar coating it as a populist initiative.

As a result, although Health Minister Dr Marcus Bethel says he will take account of input from the doctors and others, consultation so far has been mostly top-down. Last Friday’s meeting with a few dozen Chamber of Commerce members is a case in point. The discussion was preceded by a call for any journalists present to get out. How does that translate into public discussion? And how can the Chamber of Commerce allow itself to be a party to such ridiculous censorship?
   
This is the country’s most important public debate in decades, but unfortunately it is being driven by politicos who are pursuing a tax agenda in disguise. We say this because Bahamians are already guaranteed access to healthcare (and so are illegal immigrants) via the existing $181 million-a-year health budget.

So let’s be up front about it - the issue is about funding and politics, not access. And it should be about quality and accountability as well. In other words, we are back to our original question – how do we achieve long-term sustainability in healthcare.

There is certainly a case for enlarging the funding pool, but this should not be done in the context of a government-run system. If Dr Bethel really wants to make a contribution to social progress, he should transform the Ministry of Health into a purchasing and/or regulatory body, divesting hospitals and clinics from state control and management.
 
We should be about switching all this money away from government monopolies, and giving consumers and providers the right mix of incentives to act responsibly and respond effectively. For example, what is the advantage of charging high import taxes on medical equipment for the private sector?

According to those in other countries who are thinking about better ways to deliver public services and economic prosperity, “Few, if any, of the advances of the last 50 years were made by  governments. Our lives have been changed immeasurably in the areas which enterprise can reach. But in the areas owned and controlled by government, the story is stasis.”

You just have to look at the hundreds of millions of dollars lost by failed state corporations like Bahamasair and ZNS, or frittered away by BTC, to realise that there is just no argument here. So why are we looking to create more of the same?

Comments

[The Bahamian Nationalist]

I agree with this article in toto!
In 2001-2002 during specific studies in Medical Law, leading to a distinction LLM, I was able to have a UK Medical think tank at the University I attended crunch the Numbers for the Bahamas. The conclusion was that it would be a ruinous system to implement a tax based National Health Service. But I have long ago learned that Local wisdom counts for exactly Zero. This time the Bahamas is going to have to learn the hard way, and it will be left for persons like The Nationalist to put the system back together after this PLP crew ruins it completely. I just hope that private insurance is not completely driven out by that time. We were making serious progress in the country with the development of a combination public/private sector health system, precisely tailored to our needs. The Unions were proceeding with their own composite plan, which would have moved things along nicely. Government's intrusion into this area has derailed all the progress made in the last Ten Years. This is sure to cause a reluctance in future for the private sector to risk its capital in health physical plant and systems. But no-one can derail this train since Mr. Christie thinks that this is HIS LEGACY! It is the last of the original socialist dreams of the first PLP think tank. It was flawed then and it is fatally flawed now, but it will take a devalued bahamian dollar to get the point home. As for efficiency, if government was ever interested truly in health care I would still be practicing Surgery!I became a political activist in 1975 due to the PLP neglect of health. I will die as an activist for a proper health system, if a serious government does not take charge. But this bogus excuse for an income tax is NOT IT by a long shot!

[tb]

this is the "meat" I was looking for. Good on ya!