The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A leading physician yesterday urged the Government to abolish import duties of up to 45 per cent on medical equipment, arguing there should be “no barriers” preventing Bahamian healthcare facilities from entering the medical tourism market.

Acknowledging that medical tourism held “huge potential” for the Bahamas, Dr Duane Sands, the former FNM Senator, told Tribune Business that these tax rates, together with high work permits fees, meant local medical providers were being forced to compete against global rivals with “one hand tied behind their back”.

Pointing out that these issues made Bahamian healthcare providers’ overheads and acquisition costs much higher, Dr Sands called on the Government to pass legislation that would have rolled back duties levied on medical equipment.

He added that the former Ingraham administration, of which he was part, had intended to do this with the Healthcare Improvement Bill it introduced in the 2011-2012 Budget. However, this never debated or passed in Parliament.

And Dr Sands also noted that the higher cost base created by such tax rates threatened to make Bahamian healthcare providers uncompetitive - a major problem if this nation was to target medical tourism as a growth sector.

“You have to be aware of some economies of scale that apply, and you don’t want to dismantle fledgling Bahamian programmes that are economically challenged,” Dr Sands warned.

“We don’t want to short change local healthcare facilities that pay large taxes on medical equipment, work permits for staff.

“As we encourage medical tourism, bear in mind that we want to facilitate local medical providers by not putting barriers in place that prevent them from getting involved.”

Referring to the legislation proposed by the former Ingraham administration, Dr Sands told Tribune Business: “The concept was to roll away duties on medical equipment, particularly for capital acquisition.

“The idea was to be able to pass those savings on to the patient, and to reduce the cost of care and improve the quality of care.

“We cannot have a situation where you’re saying to the Bahamian healthcare practitioner: ‘We’re going to tie, or keep, one hand behind your back’, and expect them to compete in a global market where ultrasound, mammogram machines are being changed out every year or two, and the Government is saying: ‘I need my 45 per cent’.”

Analysing the implications of all this, Dr Sands said: “It makes it incredibly difficult to get a return on investment, and increases the cost of care for the patient.

“When talking about medical tourism, it becomes virtually impossible to do medical tourism when you have that type of overhead.”

Noting that it was cheaper for Bahamians to fly to Florida and back for an MRI, rather than have it done at home, Dr Sands identified medical equipment and work permit costs as being among the culprits.

“The capital acquisition is not based on the cost of equipment and the number of people going through it, but also the 45 per cent Customs duty and 7 per cent Stamp Duty paid on top of that,” he said.

In addition, annual work permit fees typically ran into $5,000-$10,000 for medical staff.

“Quite frankly, we have not been able to train enough of our own people to run the healthcare industry in the Bahamas,” Dr Sands said. “There are some real, real challenges we need to get past.”

When it came to medical tourism, he suggested that foreign healthcare providers and physicians seek to partner and joint venture with Bahamian counterparts, as these projects seemed to enjoy most success.

“There have been a number of inquiries over the years from individuals interested in establishing Far Eastern or Asian clinics, hoping to provide high quality, low cost services in the Bahamas,” Dr Sands said.

“For many reasons, those projects never made it off the drawing board. It would be at least two-three a year that I would see. Projects that have really taken root have been those that involved real relationships, partnerships with the local community and hospitals.”

The former FNM Senator said Bahamians also needed to benefit from facilities and care set up in this nation by foreign providers to target the medical tourism market.