The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Medical Association of the Bahamas (MAB) president yesterday branded as “voodoo economics” projections that National Health Insurance (NHI) will make the economy ‘$500 million bigger in 2040’, even though other studies have produced similar findings.

Dr Sy Pierre, in a statement sent to Tribune Business, said the findings of the joint KPMG/Cambridge Econometrics study on the potential economic benefits from implementing NHI’s $100 million primary care phase “can only be met with scorn and disbelief by right-thinking Bahamians”.

KPMG executives declined to comment on Dr Pierre’s remarks when contacted by this newspaper yesterday, but sources close to the study said his rejection was “completely out of line” with international research and global findings on universal health coverage (UHC) systems.

Tribune Business was directed to studies by the likes of the World Health Organisation (WHO, World Bank, Pan-American Health Organisation (PAHO) and the Lancet medical journal, which had shown UHC systems were responsible for GDP growth of between 2-12 per cent, with an average of 4.3 per cent.

Still, Dr Pierre argued that KPMG was assessing healthcare “in a vacuum”, and failing to account for the numerous economic and social factors that drove the Bahamas’ high medical costs.

He also accused the accounting firm’s study of using “emotive language” and “misleading” statements, particularly when it came to the difference between primary and catastrophic care.

The MAB chief said that Bahamian “fears of how they will pay for healthcare” related primarily to catastrophic care, which involves chronic and life-threatening illnesses and ailments, but these will not be covered under the $100 million primary phase.

“The language of the report seems to be deliberately misleading on the concept of ‘primary care’,” Dr Pierre argued.

“The KPMG report attempts to sell NHI by using emotive statements such as: ‘Today, most Bahamians do not enjoy the security that comes with a meaningful right to healthcare. They must live with the fear of what might happen to them if a loved one becomes ill, including how they will pay for care’.

“Very true. But what comes to most peoples’ minds here is catastrophic care, not primary care. And as yet, there has been little to no discussion about how and when, or even if catastrophic care will become a part of NHI.

“Primary care doesn’t pay for surgery, or chemotherapy, or hospitalisation. So if our streets are still violent, our youth at risk, our lifestyles still unhealthy, will we still be experiencing that $500 million growth in GDP?”

The KPMG study is predicting that implementing NHI’s primary care phase now will make the Bahamian economy almost $500 million bigger in 2040 than it would otherwise be, with the larger GDP output coming from a healthier, more productive workforce that contained more workers.

It added that NHI primary care implementation would in 2030 make the Bahamian economy $248 million, or 2.7 per cent, larger than it would otherwise be if the scheme was not implemented.

And it estimated that NHI would make Bahamian GDP, or economic output, some $358 million or 3.7 per cent greater in 2035 than if the scheme was not executed. These figures rose to $485 million, or 4.8 per cent, by 2040.

Dr Pierre, though, dismissed the projections by the global accounting firm and UK-based economic think-tank.

He said: “KPMG’s claim that the implementation of the primary care phase of NHI will make the Bahamian economy ‘almost $500 million bigger in 2040’ can only be met with scorn and disbelief by right-thinking Bahamians.

“Their recently-presented report is full of unsubstantiated figures and misleading conclusions, and attempts to present health care in a vacuum, completely ignoring the issues plaguing us as a country today.”

Dr Pierre said the report presented NHI as “the long-awaited panacea for much of what ails us as a nation”, making “very grand claims” about the impact it will have on the Bahamas’ economic output, plus workers productivity and skills.

Yet he argued that it was difficult to see how NHI would accomplish all this, given the Bahamas’ ongoing economic, social and educational woes.

“The KPMG report must be addressing a Bahamas that exists in an alternate universe, and not the one that we live in, to make such broad, sweeping statements,” Dr Pierre said.

“Let me enlighten them on a few facts: The Bahamas has had at best a ‘D’ average high school grade (functionally illiterate and innumerate) for more than a decade; has a murder rate that is 10 times’ higher than that in New York City; is suffering brain drain (especially in the medical field) at an enormous rate; imposes business taxes that are choking the lifeblood out of ordinary citizens, professionals and businesses; collects Value-Added Tax for which the Government has been unable to give (to many) a satisfactory account; has an increasing debt rate; and four successive annual ratings downgrades by Standard and Poor’s; and utility/communications/water bills that are amongst the highest in the world, with some of the worst service in the world.

“KPMG and its consultant partners are making the mistake of looking at healthcare in a vacuum. I will say this again: The only way to provide universal healthcare is to have universal employment consisting of well-paying, meaningful jobs, a proper educational system and the rule of law.”

Dr Pierre again argued that it was difficult to assess how KPMG arrived at its $500 million projection, given that there had been “no real discussion” of how much NHI will ultimately cost, who will pay for it and how.

“We are told that the study predicts a return on the Government’s investment, yet how can the returns be calculated on unknown expenditure?” the MAB president argued.

“The introduction of NHI is more likely to reduce our GDP, due to a reduction in the private health insurance business, as many people will either drop the primary care portion of their health insurance under the assumption that it will be provided by NHI, or will be unable to afford private insurance period due to the increased tax.”

The KPMG report, though, identified the $100 million primary care phase’s funding sources, saying $40 million would come from the reallocation of existing healthcare spending, and the remaining $60 million from “new government expenditure”.

It reiterated that no new or increased taxes would be used to finance NHI primary care, and the addition of further phases would be based on an “affordability envelope”, meaning when the system and economy could bear it.

Still, Dr Pierre continued: “Surely, if the immediate implementation of NHI will so positively affect our health, skills, productivity and GDP growth – to the tune of $500 million – then there should be no need for any type of NHI tax. However, if KPMG’s assessment is incorrect, will they pledge to pick up the tab for any NHI taxation?”

He ended by calling for “frankness” on the part of KPMG and its fellow consultants.