The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A former Bahamas Chamber of Commerce head yesterday said the Government was picking the wrong time to introduce National Health Insurance (NHI), and questioned whether this nation had the “wherewithal” to implement it and other major reforms simultaneously.

While noting that the Government had yet to reveal how much the proposed NHI plan would cost, and how it would be financed, Winston Rolle told Tribune Business it would likely act as another tax on both the business community and the consumer.

Now running his own information technology (IT) business, the former Chamber chief executive said it was widely anticipated that the NHI scheme would be financed by National Insurance Board (NIB) contribution increases.

These would be applied to both the employer and employee components, he suggested, and act as a disincentive for companies to hire new staff at the very time the Government was desperate to get the official 13.7 per cent unemployment rate down.

And, pointing out that the Bahamas was in the midst of trying to implement a Value-Added Tax (VAT) by July 1, 2014, and negotiating its entrance to the World Trade Organisation (WTO), Mr Rolle questioned whether the Bahamas had “the wherewithal and the capacity” to introduce NHI and all these major reforms at once.

He added that the private sector’s concerns had not changed since NHI was unveiled by the first Christie administration in 2005-2006, and suggested the scheme needed to be “phased-in” over an eight to 10-year period.

“I don’t think, at the stage we’re at now with the economy, considering the high level of unemployment, that now is the right time to introduce additional taxes for the consumer as well as the business community,” Mr Rolle told Tribune Business.

“There’s going to be some additional contributions to NIB to pay for this. There’s some anticipation that this added cost will be a shared cost between employers and employees.”

Any increase in the employer’s NIB contribution portion, Mr Rolle added, would likely make Bahamian businesses reduce, or drop completely, plans to hire new staff as the marginal costs of employment had risen.

“You’re going to be introducing a tax on both the business community and the consumer at a time when businesses are still trying to recover from several difficult years, and it’s going to have an impact on employment,” he reiterated.

“All this has to be a factor when someone makes a decision about hiring staff. This added cost element has to be factored into the equation.”

This was underlined in a presentation the private sector made to then-minister of health, Dr Hubert Minnis, in 2008. A survey of 79 employers found that an NHI scheme financed through NIB contributions would “negatively affect” employment levels at two-thirds of businesses.

“Thirty-eight per cent of employers indicated that the added cost would have limited new hirings,” the 2008 report to Dr Minnis said.

“Approximately 16 per cent stated they would reduce existing staff levels, while 15 per cent would limit new hirings to part-time employees.”

Chester Cooper, the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) chairman, yesterday said it was too soon for the organisation to comment on the proposed NHI scheme because no details had been released.

Edison Sumner, the BCCEC’s current chief executive, is on the Government-appointed steering committee charged with overseeing NHI’s implementation, so the private sector should have some input into the process.

Mr Cooper said yesterday: “We naturally support the notion of adequate health care for all. No doubt the new task force would study the experience of many small countries, like Cayman and Turks & Caicos, and hedge against some of the adverse experiences.

“There is also an obvious need to recognise the contributions of private insurers and ensure that NHI does not seek to replace it, but rather complement what now exists.”

Meanwhile, Mr Rolle questioned whether the Government had the ability to finance NHI, given its current fiscal constraints, and if the Bahamas had the capacity to absorb this and other projects.

“There’s a whole lot of things going on at one time, that’s the concern,” the businessman said.

“We seem determined to embrace VAT in 2014, which I think is a mistake. There’s VAT, we’re still making the adjustments with FATCA. There’s also the whole issue of trade negotiations and WTO accession.

“For a very small economy that’s a number of major things going on that will impact all at one time. Do we have the wherewithal and capacity to facilitate all these things at one time?”

Mr Rolle said the steering committee’s mandate would be key, and questioned whether its job would be to “investigate the viability” of NHI or just implement it.

“That’s the key difference right there. That will make all the difference in the world,” he added.

The former Ingraham administration had adopted a phased approach to healthcare reform, via the National Prescription Drug Programme, and Mr Rolle suggested that a full-blown NHI scheme should be implemented over an eight to 10 year period.

Calling for the adoption of a public-private sector partnership for Bahamian healthcare reform, Mr Rolle said such a approach had recently featured at an Inter-American Development Bank (IDB) Board of Governors meeting.

“Let’s face it: We know no government will ever have the resources, and we have to be concerned about the inefficiency in the public sector,” Mr Rolle said.

“We need to show a lot better efficiency, and people will have to have a lot of options as to where they go for healthcare, including going to the private sector.”