National Health Insurance. More thoughtful dialogue.

First Published: 2006-04-07

Presentation to Rotary Club of East Nassau
Duane E. Sands MD, FACS

Good afternoon. Thank you for inviting me to share my thoughts on a topic of great national importance.

In 2002 a Blue Ribbon Commission was established by the Prime Minister of the Bahamas to "look into the feasibility of a national health Insurance plan: one that would ensure that healthcare for all could be guaranteed, protected and free from financial burden at the time of use."

On Jan 31st, 2004, The Blue Ribbon Commission presented its report to the Prime Minister.

It is an excellent and thoughtful document which characterizes the Bahamian Health care system more succinctly than any other attempt. For this, the members of the Blue Ribbon Commission are to be commended. It is a report that every individual in this room must read as it forms the basis of one of the most important pieces of social, legislative and financial reform in the recent history of this country.

Let me digress early and state… This debate on NHI is important and visceral. It requires a thorough evaluation of the core values of basic Bahamian humanity.

Is healthcare a right or a privilege? If a right, then how much of a right? How far should we go to guarantee this? Is it more important, as important, or less important than education? Are all Bahamians entitled to kidney transplants, or joint replacements? Is it a right to have the government pay for your Viagra for impotence?

Should the public purse pay only for generic drugs or finance state of the art monoclonal antibody or stem cell based therapies?

What if the patient is a drunkard or a child molesting drug abuser?

Yes, this debate is arguably as important as religion – and more important than politics and every single one of us….with our various skill and talents ….must contribute.

While the need for a "safety net" is a critical component of any civil society, we must determine who we want to catch and why. We certainly cannot totally remove the responsibility of the individual for his/her actions.

The Blue Ribbon Commission report outlined a number of recommendations to be adopted in the creation of such a plan.

The eight major recommendations included:

1. Universal Coverage
2. Administration by the National Insurance Board (NIB)
3. Capitation as the preferred mechanism for provider payments
4. Mandatory membership
5. Comprehensive Benefits package
6. Reserve fund for contingencies
7. Public and private providers were to be invited to participate
8. Contributions would be salary based.

Further the report encapsulated the current financial picture of the Bahamian Healthcare system in 2001/2002.

Included in the overall expenditure calculation was the Governmental allocation to health of B$ 167 million/ annum
Out of pocket health care expenditure of B$71 million
Health Insurance premiums of B$102 million
Or a grand total of B$ 343 million – give or take- that Bahamians spend on health care. Obviously the data is incomplete (health spas, OTC preparations, Benny Hinn costs, Dr. Sir Kevin King charges, etc.)

51% of Bahamians have some type of health insurance.

In September 2005, in response to Cabinet's request for estimates of the cost and financing requirements of a comprehensive package of benefits, an Executive summary was prepared.

In late 2005, the government launched an initiative of Cataract care through the Castro/Chavez plan which had been offered to all countries in the region. Simultaneous with the introduction of this plan to local physicians, the NHI plan was also discussed.

That timing would prove to be pivotal as a subsequent address to local physicians at the Grosvenor school of Nursing in 1/06 and the resultant "breakfast meeting of physicians and the Minister" demonstrated a significant divide between the political/ administrative arm and the technical arm of the healthcare delivery team.

At that meeting, as the temperature rose and tempers flared, the costing data was presented for the first time.

Included in the costing estimates were:

A total NHI package of B$231 million (up from current government expenditure of B$200) with Government contribution shifted to B$ 111 million and the balance contributed by employed persons at a rate of 5.3% for all employed persons (to a cap of B$5000/ month). It is important to note the word "shift" because the remaining 89 million dollars would be diverted to non-NHI health activity such as environmental services and MOH.

So for most of you sitting in this room, NHI contribution would be about B$250/ month or B$3,000/year in addition to your existing taxes. Remember that the "so-called" government contribution came from your pocket in the first place.

Ostensibly, NHI produces a new tax to be paid primarily by those in jobs where actual income is easily calculated and will minimize contributions by individuals with variable revenue such as hotel workers, taxicab drivers, fishermen, etc.

Several Scud missiles have been fired across the bow of the Minister's ship and that of the Bahamian body of physicians (MAB) who have made it clear that we do not support the NHI plan as currently presented!

It is our view that The National Health Insurance scheme, as currently promoted or proposed, will not solve the healthcare problems of the Bahamas nor will it achieve the benefits touted by the Blue Ribbon Commission. We have no problem with healthcare reform – even if it comes in the form of a well conceived, appropriately designed and properly considered NHI plans.

The doctors are not opposed to National Health Insurance. Employers may be, the Merchants may be, the Chamber of Commerce may be…but for the record, we agree that there has to be more funding for healthcare….

So how could we arrive at this impasse?

As responsible senior physicians who serve as integral parts of the healthcare delivery team, we feel that it is our duty to ensure that the plan is either not implemented or is modified substantially to ensure that our people derive the greatest benefit from this historic change in national policy.

After careful, thoughtful review of all said and published, this is not the way to get where we want to go!

Why not?

From this point on…I shall stop referring to We (MAB, doctors, etc.) and say I (Duane Sands (Bahamian, Surgeon, Citizen.)

Firstly, regarding the Blue Ribbon Commission itself, the process has unfortunately been plagued by some important flaws. Of greatest concern is the failure (notwithstanding the stated efforts otherwise) of the Commission to achieve truly non-partisan, consultative participation. The exclusion of participants of opposing views, who nonetheless are committed to the touted goals of the Commission, invalidates the view that all options for achieving the best plan of health care reform were considered.

Further, many of the assumptions used to arrive at the conclusions by the BRC are so tenuous, incorrect or imprecise that they can not be relied upon to base such critical decisions.

As an example, the NHI scheme currently proposes that all non-members pay in full for services rendered by the healthcare system. Simultaneously the government has in place a policy of universal access, guaranteeing healthcare to all, paid or unpaid, legal or illegal.

The currently legally mandated fees requiring the payment of nominal fees for services are not paid…..hence in exchange for B$170 million of service, the government collects less than B$6 million.

Further, it has a policy that prohibits attempts at collections. So the premise of a "self-sustaining" NHI system is unrealistic.


Such a plan, if implemented in any form, will require the solid participation of a majority of the stakeholders to succeed. As physicians play a substantive role in the delivery of healthcare in the nation… have participated in or been instrumental in most of the advances in healthcare in the nation… they are vitally important to the success of this project. We have not been convinced that the views of the medical community have been adequately considered. This does not bode well for any fledgling program which will likely have hiccups intrinsic to "change" – regardless of merit.


The "spin" placed on the introduction of NHI is perhaps the greatest tragedy. In order to "sell" an idea intended to improve funding of our local system, many promises are being made.

Concepts such as "no more cook-outs, improved access, shorter waiting lists etc." accompany the actual plan.

This "pork-barrel politicking" detracts from the thoughtful consideration of this important discussion because it creates unreasonable expectations in a public that already functions with an institutionalized and politically supported incongruence between desire and capacity.

Simply put, Bahamians want first world medicine at a third world price! Stated another way, Bahamians are led to believe that their public healthcare system can deliver what the public demands even when it is under-funded and under-equipped to deliver.

Successive governments have been unwilling to admit that the public health system was limited – that it could not provide everything to all because the political fall-out would have been unacceptable. Further Bahamians have been led to believe that the difference in charges in the private sector was largely the result of greed of the Health care providers, Physicians and Institutions – as opposed to critically evaluating the real components of cost.

Now we are about to make the situation even worse even as we strive to make it better.

Capacity in the public healthcare system is stretched to the limit and creating serious inefficiencies. The current staffing is handicapped by an undercapitalized infrastructure that has not been able to invest in needed technology, repairs or upgrades.

Let us try to estimate the cumulative deficit outstanding in the public sector. Such an exercise is included in the released Blue Ribbon Commission document which describes the various "Areas for Improvement" but does not estimate a cost or time frame to achieve the desired outcome.

We would have to look at (and cost) physical plant needs, equipment, information management systems, maintenance, training, insurance, pensions, salary and benefits.

If thoroughly performed, a reasonable estimation of the accrued "deficit" in our public healthcare system would be $250M -$500M to achieve some degree of parity with the healthcare "targets" that we hope to emulate (if the goals are limited to those outlined by the Commission.)

Further the annual increase in expenditure above and beyond the current $200M spent per annum will require an ongoing commitment to capital acquisition and maintenance, new services, innovative treatment etc. The projected dollar amount will always be an elusive target because of the constantly changing expectation.

The costing projections assume "The continuation of the recent pattern of economic progress."

What happens if we have another 9/11?

Inefficiency is the order of the day in the public sector. The watchdog for the planned NHI fund (BIB) operates with an overhead which is deemed excessive. Yet it is assumed that this will be corrected as more money is poured into the NIB coffers.

Let us look as some real world specifics.

The improvements in A&E and in our NICU have demonstrated the view that improved service fuels increased demands. Likewise, CT scan availability at PMH has resulted in a modification of treatment and work-up algorithms and more CT scans. While the tendency (by payors) is to describe such behavior as "abuse," it is really a natural consequence of availability. The current rationing of services mandated by limited capacity will become increasingly more difficult and be less tolerated by the public being further taxed for healthcare. "I have paid for it so why can't I get it?"

Bahamians idolize the healthcare system in the USA… indeed the standard is that found in South Florida and the public demands reflect this.

While this illustration can be embellished, the pivotal issue is that we need to honestly manage expectations and utilization to achieve the sustainable endpoint of improved quality and access.

The current "spin" is doing exactly the opposite.

The public has been quoted examples of the levels of contribution required to achieve access to the new healthcare system. Illustrative contributions of $50 -$100/ month/ family have been promulgated.

The adage that "if it seems too good to be true, it probably is…" ought to apply. Even if the actuarial "data" might seem to indicate that this number is realistic, "actual" experience indicates otherwise.

Currently I pay more than $500/month for a comprehensive private insurance plan. Even with critical management of benefits, utilization review, etc. this amount escalates annually. The major determinants are the proportion of older, sicker patients and the introduction of new technology. While I bristle at the monthly cost, I honestly do not believe that it can be dramatically reduce. – While maintaining the level of choice and options that I want.

I believe that the free market defines cost and charge – not the central government. Indeed, the current cost of living in the Bahamas (cars, clothes, education, food, salaries and taxes) drives the cost of providing healthcare and cannot be arbitrarily or artificially reduced without significant repercussions.

Further, while not an Economist, I am an employer who realizes that the added cost of providing and paying for NHI will lead to incremental increases in healthcare charges in my practice (the private sector) and ultimately reduce access.

The free market that exists and is enjoyed by all Bahamians has developed because of a balance of many factors. The tax structure, human resources, physical plant constraints all contribute to the net delivery (and quantity) of any given product.

What about these cook-outs? Unfortunately, in an effort to sell a product, the proponents of this plan have conjured up a vivid image that the 'cook-out" will become a thing of the past. Not only is this untrue – it is irresponsible and unfortunate.

There will always be catastrophes that elude the capacity of a given system. Regardless of the quality of benefits, Bahamians will always aspire and work for more. Given an opportunity to have an operation in the Bahamas, some will choose to have it done in Florida or elsewhere. Given a choice of conventional chemotherapy, some will opt for monoclonal antibody-based delivery systems. Further, they will use a socially accepted model – which fosters a sense of community- to raise the funds. When a child needs a small-bowel transplant or any other service not provided by the NHI, the cook-out will serve as a means of raising money. The "despised" cook-out, viewed by some as evidence of health-care delivery inequity can be viewed by others as a part of the elaborate tapestry of communal behavior. Where else will we eat on Saturdays?

Should we do away with the Heart Ball or the Red Ribbon Ball as well?

An added $50 million dollars for healthcare per annum will only minimally impact the perceived quality of care as experienced by the most important customer, the patient. Yet the added financial burden felt by that customer's out-of-pocket impact will force massive improvements in ambience, service and other "non-essentials" that are currently given a lower priority because of the need to use limited funds for direct patient-care needs.

Shoddy paint, dirty bathrooms, inadequate vector control, infrequent garbage collection, limited parking access issues etc. will not be tolerated by a public that has surrendered significant amounts of disposable income.

Existing data already confirms that Bahamians live well beyond their means and save little. The assumption that a tax to provide more funds for healthcare will result in an improvement in perception of well-being is a very long stretch.

The NHI scheme does not provide for personal responsibility for risk factor modification. Contribution is income based and ignores diet, exercise, cigarette smoking, and other actuarially risky attributes. Some individuals sacrifice for a quality education or a more secure home. Similarly, they recognize the value of adequate insurance (life, property and health and are willing to pay for it. Other people do not, yet will look to the public for relief at the time of a loss. As such, the planned scheme may engender tremendous animosity amongst the groups of participants. Individuals, by definition, make choices – good and part – and these choices can rarely be legislated. Already, the debate about illegal immigrants has taken on a life of its own.

The timing of public health sector reform will clearly have a tremendous impact on the ultimate result of any initiative.

The way we do what we do and the assumptions made…the political will to achieve accountability plays a major role in the quality of the product.

Simply increasing funding without clearly spelling out the required extent and scope of process reform will exacerbate the inefficiency. I believe that true health sector reform will more substantively impact quality than incremental funding increases.

All patients should ideally be "private patients" with rigidly managed lengths of stay, quality control and cost containment. While the level and extent of benefits will vary, a clearly defined minimum standard of care should be the goal of the public sector. I have often used the analogy of a flight to London. In economy class sit the majority of travelers. Space is limited but comfortable and the food is palatable. Up from there is business class, with larger seats, more space and sumptuous fare…exceeded only by the plush and posh environment of first class? Same plane, same pilot….no difference in destination or safety. One size does not fit all. Everyone cannot afford Atlantis or Ocean club…but they certainly should continue to exist.

The idea that we should create an inflated public sector in the interest of improve quality is as close to Orwell' Animal Farm" as we can get. It is a frightenly retrogressive step possible and will lead to less accountability, longer waiting times and reduced quality.

The goals of the Blue Ribbon Commission and the National Health Insurance plan are admirable and universally held. They will not be achieved with this plan as currently outlined and will likely cause far more damage than ever anticipated.

I hope that this discussion leads to more thoughtful dialogue.

Thank you!

Duane E. Sands MD.

Reprinted with the kind permission of Dr. Sands.

The views expressed are those of the author, and not necessarily those of the Nassau Institute (which has no corporate view), or its Advisers or Directors.

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