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Presentation by Cardinal McHardy at The Rotary Club of East Nassau, October 18, 2002.

The scenario is all too common. A resident of Bain Town - let's call him Harry - works as much as he can to support himself and his family on pretty meager construction worker’s pay. His foreman tells him there is no company insurance plan. Like many Bahamians, Harry works 40 hours a week in a permanent position earning too little to afford good health insurance.

ALSO LIKE MANY Bahamians, Harry didn't think a whole lot about health care until the moment of truth. He probably didn't think about insurance at all. Now, Harry is one of hundreds uninsured, sick Bahamians who will attempt to battle his way into PMH or one of the public clinics that will provide him with care. If he goes to PMH he may spend many hours waiting, hoping that an anonymous person in a white coat will see him and will be able to interpret and treat his problem. If he’s lucky, his problem will be a minor one and he will walk away after a few hours of frustration. If he’s not he’s at the mercy of our civil servants and or the ever popular cook-outs. Not to mention the strain placed on our public health system.

Today, I wish to take a few minutes of your time and talk to you about the challenges & myths of a national health plan, but in order to do so sensibly I need to touch briefly on a few of the challenges facing this pivotal industry.

CHALLENGES

The underlying nature and risk of the healthcare business is most unpredictable and much more complex than even the traditional life insurance risk. Someone once said it is as unpredictable as marriage. You don’t always know what you’re dealing with, and when you think you’ve got it right it explodes in your face.

The challenges facing the healthcare industry are enormous.

From the insurance companies’ point of view there are many challenges, including maintaining reasonable premium levels and making a small profit.

From the physicians and healthcare facilities viewpoints, the reduction in earnings as HMO’s and Managed Care plans tighten the margins, and the reduction of medical errors are two of their top concerns. According to an article by the Australian Public Information Technology Company OAKTON called “Taking the pulse of healthcare industry” 98,000 people die each year due to preventable medical errors.

But, without a doubt one of the biggest challenges facing the entire industry today may be the ever-increasing rise in healthcare cost.

Finger pointers can not settle on who's to blame for healthcare costs.

In a USA TODAY article By Julie Appleby, she writes:

Insurers blame rising drug costs. Drug companies blame HMOs and hospitals. Doctors blame lawyers. And, it seems, everyone blames consumers.

The problem? Health care costs in the U.S. are continuing their rapid rise — averaging 13% this year and expected to be more than that next year.

"Everyone is a villain," says Drew Altman of the Kaiser Family Foundation, a research group. "Everyone is blaming everyone else because they're trying to shift the cross hairs onto someone else."

The blame game is heating up because no one really has an answer on how to slow the increases.

The first volley in the blame game came this spring, when an organization backed by health insurers released reports critical of the drug industry. Spending on prescription drugs, the studies said, grew more than 17% in one year — an increase of $22.5 billion — with much of the increase blamed on a relatively small number of expensive, often not very innovative drugs.

Not so fast, said the drug industry. New medicines can save money by keeping people healthier, and Health insurers should be encouraging the use of more drugs. And the drug-makers issued this kicker: HMOs spend more money on administrative costs — such as paperwork and CEO salaries — than on drugs.

And pity the poor consumers. Nearly all of the health care industry's players blame them for rising health care costs. Patients, they say, naturally want the best and latest treatments — but they also want others to pay for it.

"The people to blame in the end, the ones ultimately responsible, are consumers," says senior economist Christopher Thornberg of UCLA's Anderson Forecast, a national survey of businesses. "People don't adequately take into account the true costs of the services they're consuming."

While Mr. Thornberg was referring to health insurance his point is no less driven home by the story of the lawyer and engineer who were fishing in the Bahamas.

The lawyer said, "I'm here because my house burned down, and the insurance company paid for everything." "That's quite a coincidence," said the engineer. "I'm here because my house was destroyed by a flood, and my insurance company also paid for everything." The puzzled lawyer looked at the engineer and asked, "How do you start a flood?"

When something is free or appears to be free we abuse it. Consumer abuse or misuse is a refrain that's selling well among those looking for ways to slow rising health care costs. Already, employers are asking workers to pay more. The Anderson survey of 460 companies in the U.S. found that more than 70% expect to make changes to their health benefits next year, including reducing the level of benefits and increasing the amount employees pay toward premiums and deductibles.

While the above article is based on the US experience, we in the Bahamas are facing similar challenges.

And so, what’s the answer to this healthcare maze? As we in the Bahamas wrestle with the problems in our health care system, it is tempting to look elsewhere for solutions. It is commonly believed that one can control healthcare costs and provide quality care through national health insurance. But is this really true or is this just a myth?

The following are some common myths about national health insurance, gleaned from an article by:

Dr. Gerald L. Musgrave, President of Economics America, Inc., and

Dr. John C. Goodman, President of the National Center for Policy Analysis.

MYTHS ABOUT NATIONAL HEALTH INSURANCE

Myth No. 1

Countries with national health insurance have been more successful in controlling health care costs.

On the surface, this may appear to be so since the United States (one of the largest countries without a national healthcare plan) spends more on health care than any other country in the world, both in dollars per person and as a percent of gross national product (GNP),

But research has shown that this may be a real myth for the following reasons.

First of all, the United States is wealthier than other countries, and almost without exception, countries with more income spend more on health care. In fact, health economists have discovered that 90 percent of the variation in health care spending among developed countries is based on income alone.

Secondly, the United States has a much higher violent crime rate, heavier illegal drug use and a greater incidence of AIDS - all of which generate more health care spending, says Leroy Schwartz (Health Policy International):

And thirdly, in a private healthcare environment there is no limit to spending whereas in those countries with national healthcare systems, governments can and do limit health care dollars and tell hospital managers to ration the money they are given.

Myth No. 2

In countries with national health insurance, all people have equal access to health care.

One of the most surprising features of European health care systems is the enormous amount of attention given to the notion of equality and the importance of achieving it. Aneurin Bevan, father of the National Health System (NHS), declared that "everyone should be treated alike in the matter of medical care.”

Inequality in Britain? Such rhetoric rarely relates to the facts. Britain's ministers of health have long assured Britons that they were leaving no stone unturned in a relentless quest to root out and eliminate inequalities in health care. But, although an unofficial government campaign tried to suppress it, an official task force report (the Black report) concluded that there was little evidence of more equal access to health care in Britain in 1980 than when the NHS was started in 1948. Virtually every scholarly study of the issue has pointed to a similar conclusion. For example:

� One study of health care spending across geographical areas of England found no relationship between any measure of medical need and the amount spent.

"Critics charge that those who are rich, influential, or 'connected' often 'jump the queue,' which changes Canadian health care into a two-tier system - precisely what the government wanted to avoid."

Interestingly, among the patients who jump the queue in Canada are Americans who pay out-of-pocket for care. U.S. patients add to hospital revenues, so hospital administrators value them. Since Canadians cannot legally pay for care at a national health insurance hospital, the typical Canadian patient must wait in line.

Myth No. 3

In countries with national health insurance, people have a "right" to health care.

Virtually every government, which has established a system of national health insurance has proclaimed health care to be a basic human "right." Yet far from guaranteeing that right, most national health systems routinely deny care to those who need it. Not only do citizens have no enforceable right to any particular medical service, they don't even have a right to a place in line when health care is rationed. For example, the 100th person waiting for heart surgery is not "entitled" to the one-hundredth surgery. Other patients can, and do, jump the queue for any number of reasons.

One of the cruelest aspects of national healthcare systems is the degree to which these systems engage in non-price rationing. Take the health care systems of Britain and New Zealand, for example. In both countries, hospital services are completely paid by government. Both also have long waiting lists for hospital surgery:

� In Britain, with a population of about 57 million, the number of people waiting for surgery is more than one million.

� In New Zealand, with a population of about 3 million, the waiting list is more than 50,000.

� In Canada, with a population of about 25 million, the waiting list is more than 250,000.

� This would mean that in the Bahamas with a population of 300,000 approx. 5,000 persons will comprise the waiting list.

Myth No. 4

Since national health insurance is “working” (in quotes) in other countries, it would also work here in the Bahamas.

National health insurance works in other countries for three reasons.

First, the wealthy, powerful and sophisticated - those most skilled at articulating their complaints - find ways to maneuver to the front of the rationing lines.

Second, those pushed to the end of the lines are generally unaware of medical technologies they are being denied.

Third, there are no (or severely limited) contingency fees, no generally recognized right of due process and no cadre of lawyers willing to represent those who are discriminated against.

National health insurance "works" in other countries because those who could change the system are best served by it. If a member of the British Parliament, the CEO of a large British company or the head of a major British trade union had no greater access to renal dialysis than any other British citizen, the British NHS would not last a week.

In summary, it is safe to say that in virtually every country with national health insurance, politicians, health ministers and other government officials are searching for ways to reform their health care systems. Increasingly, the reforms being adopted seek to replace socialism in medicine with privatization, competition and market incentives.

� In 1989, the British government introduced radical market-based reforms in health care and began to allow private hospitals to compete against public hospitals for National Health Service funds.

� In 1987, Germany introduced a new policy, which encourages competition among hospitals.

� Sweden, along with other European countries, has already introduced some "managed competition" into its national health insurance system, and with the recent change of government those reforms will undoubtedly continue.

� Chile has given its citizens financial incentives to opt out of national health insurance for the last decade, and most other Latin American countries are seeking ways to partially privatize their health care systems.

Countries with national health insurance make health care "free" to patients and at the same time limit spending and access to modern medical technology. As a result, there is widespread rationing, bureaucratic inefficiency and a lower quality of care

But despite the many challenges and failings there may be some good news for national healthcare advocates.

Canada has been quite successful in its efforts to contain national health expenditures. In the mid-1990s health expenditures leveled off and declined somewhat further.

Also, One of the most important indicators of the system's success is the favourable health status of Canadians. The life expectancy for Canadians born in 1997 is 78.6 (81.4 years for women, and 75.8 years for men), among the highest in industrialized countries. The 1996 infant mortality rate of 5.6 per 1,000 live births is one of the lowest in the world. Canada's health care system is regarded as a major contributor to Canada's number one world ranking for six consecutive years on the United Nations Human Development Index.

In addition, Canadian business supports the health insurance program, not only because its efficiency has been proven, but also because it provides competitive advantages to the business sector. These advantages include lower employee benefit costs and the promotion of a healthy and mobile workforce.

And so, while there are enormous challenges for any country attempting to introduce or operate a national health plan, Canada and a few other countries may provide some hope that a national health plan can work, and can be critical to a country’s economic success and life expectancy - two very important ingredients in any nations life.

The real question may not be so much, whether national health plans work, but rather, “what will it take to make it work?” I believe, like the old adage which says, “nothing good comes easy” this noble and essential benefit for all will require all the brain power and man-power we as a nation can muster. The question we must answer is “are we truly ready to step up to the plate.” Are we ready for the fast ball (the cost and its consequences), the curve ball (fairness and equity for all), the slider (honesty in all quarters) and the change-up (waiting our turns and not jumping the queue). As was illustrated in the story of the lawyer and engineer and highlighted in many of the challenges mentioned earlier, one of the real keys for success in any national healthcare plan is the consumer. And it is only, I believe, when a nation is willing to pay the price, on all counts and be transparent and accountable that a venture as significant as national healthcare can have any real hope of succeeding.