The Blue Ribbon Disaster Looming on the Horizon

First Published: 2003-10-08

The Blue Ribbon Commission on National Health Insurance declared on September 2nd that the best way to provide Bahamians with equitable access to quality health care services is with a National Health Insurance plan. The Commission contends that it has examined all alternatives; and its proposal will provide Bahamians with medical care regardless of cost, without exclusions for pre-existing illnesses and regardless of age in return for their paying an affordable amount into the system.

However, the proposal is incomplete. So much so that it can only be viewed as a public relations effort for an unsubstantiated proposal that has no price tag. A careful reading shows that the Commission has a compassion and concern for the health and well-being for Bahamians; but it is acting prematurely and in response to what appears to be a politically-dictated imperative.

The PR campaign should be stopped until the Commission is prepared to deliver a complete presentation.

What the people can afford.

This is so clearly evident in the fact that the commission has reached its conclusion without completing a “costing” of the alternatives. In effect, it has made a huge decision in a financial vacuum. This is being done in a country in the midst of a fiscal and economic crisis.

The presentation has statements like—

Changes in demography, morbidity, technology and economy require more resources than Government can afford to meet the health care needs.

An expected increase in those aged 65 and over will increase total health expenditures dramatically because this age group generates a disproportionate need.

“Free public health care may be limited by what a government can afford…health care will compete with other government responsibilities.”

The proposed solution is compulsory health insurance, a form of Social Security, a tax by another name. The Commission has a “political science” problem; it does not understand that “Government” generates no wealth…it takes wealth from the people who have it or generate it. The Commission sees a limit in the Government’s present taxing capabilities and is simply devising a new tax with a more palatable label to cover dramatically expanding Government spending.

The critical question becomes “How much of their income will people allow the Government to take?” Incidentally, this is the issue that fueled the recall movement to oust Governor Davis in California and the possible election of a body builder/actor/pop icon to the biggest job in the state.

Critics of the Commission most frequently refer to ethical and economic principles, principles that are misinterpreted as being long in self-interest and short in compassion. Nevertheless, the Commission is negligent if it does not address the concerns of someone like Dr. James Gwartney, a highly regarded development economist from Florida State University.

Making health care or anything else “free” removes the incentive of both the buyers and sellers to economize. The result will always be soaring costs and waiting lines.”

The Commission to date has not addressed either of these results as they have occurred in other countries or as they could occur here. It can ill afford to do so. This is especially true when the International Monetary Fund in its 2003 Consultation has taken the government to task for not doing enough to put its financial house in order.

The thousand pound gorilla.

The Commission inadvertently is creating another critical moment for the country. One such critical point was in 1992 when Prime Minister Hubert Ingraham reached an agreement with Mr. Sol Kerzner to develop the Atlantis mega-resort; $1.2 billion of foreign investment and prosperity for the Bahamian people followed.

However, this success has created a second such moment. Mr. Kerzner looks like the “1,000 pound gorilla” of Bahamian tourism or the Bill Gates of global tourism depending on your point of view. He created an internationally recognized tourist product that makes money in the Bahamas while the more traditional hotel product does not.

The latter was analyzed in detail by the Tourism Taskforce on Trade Liberalization. Much to its credit the Bahamas Electricity Corporation has taken a good first step to help restore tourism profitability by reducing its electricity charges. Hopefully, the Government will develop a national plan of the type proposed by the Taskforce.

Remember yearend 2000 and 2001.

And there have been other critical moments.

In November 2000 the Government felt that it was “under the gun” of the Clinton administration and the OECD. It would not wait until after the Bush administration took office in January 2001 before it passed the 11 financial bills of Christmas 2000. It did not see the possibility of structuring a better deal. As a result the country is still trying to extract itself from the paralyzing grip of this legislation. The present situation is described by Michael Paton, the Chairman of the Bahamas Financial Services Board, in his address to the annual general meeting. He said that the country needed a new plan for the financial sector; and a failure to get it would be “tantamount to resigning ourselves to a slow death…” (The Tribune, October 3, 2003, Page 7B).

In December 2001 the Government felt compelled to implement three bills patterned after the labour legislation of Western Europe. This was being done in the middle of a recession and despite the advice of Bahamian businessmen and the Nassau Institute. The Government did not want to look at the labour problems of Western Europe; and it heard but did not heed the advice. The three Bills of Christmas 2001 did reduce weekly take-home pay.

Conclusions.

The Commission appears to be driven by a political imperative that could prove disastrous. What should be done?

First, the Blue Ribbon Commission on National Health Insurance should be renamed the “Blue Ribbon Commission on Healthcare” in order to impart a more open minded, even handed tone to a process that is still missing vital data.

Second, the critics must move quickly beyond their initial statements and into an evaluation of the present situation and the alternatives. Two things are clear: there is a half-century of experience with modern healthcare and there is no perfect system.

Lastly, the country needs time to develop sounder recommendations; and it should avoid another “yearend disaster”, a disaster created by a political need to do something.

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