- The following statement was released by One Bermuda Alliance Senator Nick Kempe
On June 1, there will be a fundamental change to how services at the hospital will be funded. Whilst we have yet to see any draft legislation with only three weeks before go-live, from what information that has been shared, it is clear that not everything adds up as easily as the Minister says.
She asserted that 20 percent of the Standard Hospital Benefit portion of the premium presently managed by insurance companies is consumed by their profit and admin. These new changes will transfer almost all of this premium directly to Government. The insinuation is that this 20 percent will go away and the system will benefit.
But what about Mr. and Mrs. Bermuda? Why isn’t the overall Standard Premium Rate going down by that 20 percent if what the Minister says is true? Based on the Minister’s 20% figure there should be approximately $45/month in savings for working Bermudians.
Why should Government take these savings from us? We aren’t getting any additional benefits in exchange for these savings. Government is simply taking these alleged profits for themselves.
Minister Wilson said this new model will also result in $20m in savings at the hospital due to efficiencies, but never said what those efficiencies are.
It would seem the only real change is that claims will no longer be administered. That means that people at the hospital that billed the insurance companies as well as people at the insurance companies that processed those claims are no longer needed.
If 20 percent of the premium managed by insurance companies was for profit and admin and that goes away, clearly those performing that admin will lose their jobs. But on the hospital side are there really $20m worth of savings from making people redundant?
What other efficiencies are there? Shouldn’t the $20m is savings at the hospital also be passed on to the workers paying this tax/premium?
The hospital is moving from a fee for service model to a block grant model. Up until now, when insured people go to the hospital, the insurance company paid for the hospital service.
If you consumed more services one year than what you paid the insurance company in premiums, the insurance company still paid the bill, but had to absorb the loss.
How will it work in the future if the hospital spends all of its fixed block grant providing services, but there is still more people that need services? Where will the money come from?
Will people be denied services? Will we have to wait longer for care? Will quality drop?
These proposed changes actually do nothing to address the real costs of healthcare such as the unnecessary and over usage of diagnostic imaging and of laboratory testing. Without fixing the underlying cost drivers no amount of pooling or funding acrobatics will halt the rising tide of healthcare costs.
Another major cost driver is a declining working population in relation to retired population. Each working age person contributes approximately $50/month of their Standard Premium to subsidise qualified HIP and FutureCare recipients.
With the bucket getting smaller and the spout getting bigger, what is Government doing to get more people on island to ensure that the bucket is big enough to assist those that require subsidised HIP and FutureCare?