The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The proposed two percent National Health Insurance (NHI) "tax" was yesterday likened to "pouring more water into a leaky bucket", with an attorney arguing: "We're not ready for it yet."

Carey Leonard, a member of the first Christie administration's NHI Blue Ribbon Commission, told Tribune Business that the scheme's latest financing mechanism appeared designed to extract more money from Bahamian companies and workers while ignoring public healthcare's fundamental flaws.

The former Grand Bahama Port Authority (GBPA) in-house attorney, now with the Callenders & Co law firm, said he was against the revised NHI plan's implementation until the Government showed it could realise substantial savings from eliminating waste and inefficiency in the existing health system.

Mr Leonard argued that the Bahamian people, through NHI, are set to pay the price for failure as outlined by Dr Duane Sands, minister of health, who told this newspaper on Monday that the Government is unable to cut "significant waste" in public healthcare fast enough to produce savings that could fund the scheme.

"All they are saying is: 'I have a leaky bucket; give me more water'," Mr Leonard told Tribune Business of the proposed NHI plan. "I sat on the Blue Ribbon Commission for NHI from 2002-2004. We all felt we should have NHI; the problem was we had to fix the Public Hospitals Authority (PHA) first because there was too much waste. How are they planning to fix it?"

In his "translation" of Dr Sands' remarks, the Freeport-based attorney added: "In other words, the Government cannot solve the problem, so they're going to put the problem on the Bahamian public.

"What he's doing is: 'It's a simple fix. I don't know where the money is going, and don't care. I'm simply going to nail it to the Bahamian public'. To me, it's just unreal.

"We know we're losing all this money, and are turning around to the Bahamian people and saying: 'We're incapable of solving these problems; give me more money. That's the answer. If we fund with this with two percent from everybody, we will not have to worry about the leakage; we'll get more money from the public without having to fix the problem'."

Doctors, other healthcare providers and private sector players repeatedly urged the Christie administration to strengthen the public healthcare system prior to launching NHI, but to no avail. And Emmanuel Komolafe, the Bahamas Insurance Association's (BIA) chairman, recently warned that it remained the potential "Achilles heel" that could undermine the entire scheme if not addressed.

Mr Leonard yesterday said he was only prepared to pay NHI's 2 percent payroll tax if the waste and inefficiencies acknowledged by Dr Sands were eradicated. Dr Glen Beneby, the former chief medical officer, previously revealed that such woes are costing Bahamian taxpayers some $100m per annum, a sum equivalent to 25 percent of the public healthcare budget.

"My call is: 'When you fix the problem, let me know, and I'll be happy to contribute," Mr Leonard said. "We're obviously not ready for NHI yet. As it stands I am against implementing NHI until they can show a significant improvement on the waste.

"If it means we have to wait another year, fine, but don't nail the Bahamian public with another 2 percent on their income."

Rick Lowe, a director with the Nassau Institute think-tank, told Tribune Business that the proposed NHI financing mechanism effectively represented a tax on labour for those businesses that currently do not provide health insurance for their employees.

It mirrors the current National Insurance Board (NIB) contributions, where payments are split between employer and employee via a payroll tax, with Mr Lowe fearing that NHI represents a further increase in labour costs and the cost of doing business.

"That could be the death knell for a business," he told this newspaper. "If you're expected to pay for all of your associates it's going to have a derogatory impact on the bottom line and could be inflationary for those businesses that don't have price controls."

Meanwhile Robert Myers, the Organisation for Responsible Governance's (ORG) principal, told Tribune Business that The Bahamas and its government need to stop "bleeding to death" financially before introducing another social programme such as NHI.

"I have no problem with NHI, but the country is bleeding to death, the Government is bleeding to death, and we have to fix that before we start adding more social services," he said.

"If the country fails everybody goes down with it. All we're doing by increasing taxes and fees is building a taller house of cards, and when that goes out we've all gone with it. We've got to start having responsible MPs, responsible people in the public sector, recognising they have to clean up their house.

"We don't have any more headroom. There's no more to find. If we don't fix it the house of cards is going to come down. It's never-ending; increasing fees, increasing taxes and nothing about cleaning up the mess. Enough is enough."

Arguing that many Bahamians have little to nothing more to give when it comes to increasing taxes, Mr Myers added: "The Government has to start looking within to get any more funding for social services.

"It has to clean up its act, as it cannot keep coming back to the public and private sector for more taxes. The country cannot take any more taxes. We can take no more. Bank rates are too high, electricity rates are too high, labour prices are too high and productivity is too low.

"We have all these things in working against the country, and we have the WTO accession while all our prices are increasing. It's going to open up a level of competition from the outside where those people's true costs are a fraction of ours," he continued. "We have to start focusing on government efficiency, removing corruption and removing mismanagement and malfeasance and all that."