The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian healthcare costs are “considerably higher” than those for other Caribbean nations, the Tax Coalition’s co-chair describing whether the economy could absorb National Health Insurance (NHI) on top of VAT as “a big question”.

Robert Myers told Tribune Business that the Bahamas’ relatively high healthcare costs were the main takeaway from a recent presentation given to the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) Board by a leading consultant on the NHI project.

Urging the Government to learn from Obamacare’s errors and “not rush in” with its universal healthcare plan, he added that there were still too many unknowns to make an informed judgment on NHI’s merits.

Mr Myers, who co-chairs the Coalition for Responsible Taxation, did, though, tell this newspaper that NHI’s likely multi-million dollar funding needs would raise similar concerns to VAT among the private sector when it came to increased business costs.

And he told Tribune Business he believed the Bahamas had reached the point where the Government would see diminishing returns with its taxation.

Mr Myers said this nation would likely “reach that limit”, especially if the Government lumped NHI upon Value-Added Tax (VAT) and other new/increased fees.

Referring to the Chamber presentation that he attended in his capacity as vice-chairman, Mr Myers told this newspaper: “What we did learn last week, much the same as everything else, is that the cost of healthcare in this country is considerably higher than any of the neighbours and comparisons.”

He added that the Bahamas needed to understand the reasons for this before the Government dove ‘head first’ into its NHI plan, and take action to narrow the cost gap.

“Let’s make sure we understand why it’s costing us more in healthcare than other regional comparables,” Mr Myers said. “Before anything happens, let’s understand why we are where we are against the comparables. Let’s see why we are higher on private and public healthcare, and what are some of the things we are going to do to get this back in check.”

The Coalition co-chair said the quality of healthcare treatment outcomes also needed to be factored into the mix. “You have to look at quality and cost,” he said.

“If quality is the same as the comparison countries, and our costs are double, what are the reasons for that? Is it high duty on equipment? Is it high duty on medicines?”

Tribune Business understands that the BCCEC presentation was given by Bahamian Etoile Pinder, who is now working for Sanigest Internacional, the Costa Rican-based consultants contracted by the Government to develop NHI’s costing and benefits/services package.

Ms Pinder’s Linkedin page describes her as a consultant to Sanigest Internacional. She previously played a key role alongside Dr Stanley Lalta as a leader of the team charged with developing NHI under the first Christie administration, and she describes herself as a former ‘health financing specialist’ at the National Insurance Board (NIB) and Ministry of Health consultant.

The enabling National Health Insurance Act was passed by the first Christie administration just prior to the 2007 general election. Its FNM successor never moved to bring it into effect by passing the necessary regulations, adopting a different approach that included the start of the National Prescription Drug Plan.

While the current government believes it can move the Bahamas to a comprehensive, universal access healthcare system in ‘one shot’, the Ingraham administration’s policy was to seek to do so via a series of incremental steps. This was intended to avoid over-burdening the economy.

While NHI is unlikely to be introduced in 2014, as the Government had initially intended, it appears determined to bring it into force during this Parliament. That has again set off ‘alarm bells’ in the private sector, which is concerned about having to fund the plan via increased employer and employee contributions to the National Insurance Board (NIB).

“That’s a big question,” Mr Myers responded, when asked by Tribune Business if the Bahamian economy could withstand NHI on top of VAT and a host of other tax increases.

“I don’t know the details of NHI, so it’s hard to say whether we can or not,” he added. “If the business community is concerned about price elasticity and the impact VAT will have on that and the greater economy, then clearly they would be concerned. If what NHI is going to do is increase the cost of business, clearly there’s the same concern.”

Mr Myers suggested that the Government’s plans to raise an extra $500 million in revenue by 2016-2017 alone could take Bahamian businesses and individuals to ‘breaking point’, never mind NHI.

“There’s only so much you can tax the people,” he added. “There’s a limit to where your citizenry can be taxed. NIB, NHI, VAT; clearly at a certain point you’re going to cross that threshold and then start collapsing.

“Yes, there’s a limit to what we can offer, pay for and afford, and I think we’ve reached that limit.”

While public sector healthcare in the Bahamas appeared free, Mr Myers said that in reality it was paid for by all citizens via taxes. The Public Hospitals Authority alone received almost $200 million, or close to 12 per cent, of the 2013-2014 Budget’s $1.7 million total recurrent spending.

The Tax Coalition’s co-chair suggested that, much like charter schools, the Government should seek to privatise and outsource healthcare to the private sector.

“My view was that if you’re going to do that, for God’s sake put it in the hands of the private sector, as it’s clearly more efficient than the public sector,” Mr Myers told Tribune Business on NHI.

“Like charter schools, give the money to the private sector as a stipend for private clinics. We don’t do a very good job of running schools, so let’s give it to the private sector. This thing needs to be thought out.

“From the standpoint: Do I believe everyone should have access to medical care? Yes, it’s important affordable healthcare is available to every citizen. But sustainability is key. It’s not sustainable if healthcare costs $400-$500 million a year, and that’s twice as high as everyone else. That’s a high tax burden.”

While not suggesting that NHI be abandoned completely, Mr Myers called for it to be “evaluated” from a ‘bigger picture’ perspective to see if it was affordable given the Bahamas’ economic and fiscal challenges.

“Maybe that’s it. We’ve got to learn to live within our means, and are yet to show we can do that,” he told Tribune Business. “We need to be doing things more efficiently. I don’t think we should take it [NHI] off the table and park it because we can’t do it, but it has to be in the big picture that we evaluate it, figure it out, and see if we can do it with all the other costs.”

The Tax Coalition’s co-chair called on the Bahamas to learn from the US’s mistakes with the Obamacare roll-out, as this had ‘diminished the good intent’ behind the healthcare reforms.

“I don’t think it behooves anyone to rush it out. A failed system is a failed system,’ Mr Myers said. “Look at Obamacare. It’s a disaster. It got rushed through and look what happened. If the purpose is to get affordable healthcare for every citizen, it’s not going to help rushing it.

“It’s not going to do anyone any good if it’s financially unsustainable. Let’s get our fiscal house in order and live within our means.”