The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

AN ex-health minister says “wastage”, combined with zero political appetite, means the IMF’s call for the imposition of hospital user fees on those “with greatest capacity to pay” is likely a non-starter.

Dr Duane Sands, who held the post during the early years of the Minnis administration, also warned Tribune Business that the International Monetary Fund’s (IMF) focus on “dollars and cents” was not necessarily accounting for the outcome of health treatments amid “dismal” and “horrible” Bahamian healthcare statistics.

And he pointed out that the healthcare financing model suggested by the Washington DC-fund ran contrary to that preferred by the likes of the World Health Organisation (WHO) and Pan American Health Organisation (PAHO), as well as the Government, which viewed user fees as a barrier to accessing public sector healthcare at the point of delivering services.

“I think we are looking at a philosophical discussion right now,” Dr Sands told this newspaper of the IMF’s call for the imposition of use fees on those with the ability to pay as a means to cut annual taxpayer subsidies to the Public Hospitals Authority (PHA).

“The IMF is looking at the fiscal side of this haemorrhage. If you look at the PAHO, WHO, National Health Insurance and Government of The Bahamas model, the concept of use fees at the time of service is considered as an impediment to healthcare delivery...

“Perhaps a different model might be that we fund the healthcare system in a way that is sustainable

without getting people to pay out-of-pocket when we have an insurance pro- gramme that will then pay for individuals when they show up at a particular rate that can be discounted.

“At least the institutions [the hospitals] will know they have revenue to pay staff, pay for medicines and supplies and so forth, which is different from the historic deficits run by the PHA for however long and over which we’re spinning our wheels,” Dr Sands added.

“I think that the IMF is looking at dollars and cents, and not necessarily health outcomes. We may end up with even more challenging problems with the health statistics. They are dismal, they are horrible right now.

“The proof of the pudding is in the eating. What is going to improve health outcomes for Bahamians? We want to knock down barriers to Bahamian healthcare but, at the same time, avoid even more wasteful expenditure than we have.”

Dr Glen Beneby, the Government’s former chief medical officer, said several years ago that between 20-25 percent of public health spending in The Bahamas was subject to waste and inefficiency, and Dr Sands said: “I think we’re probably still at that number and possibly worse.”

Asked whether he could see The Bahamas ever implementing the IMF’s proposed user fee model, the former minister replied: “You’re going to have to change some fundamental positions to make that work, and I don’t think it will work given existing attitudes of the political leadership and level of wastage we currently see. Wastage and inefficiency.”

The International Monetary Fund (IMF), in its just-released full Article IV report on The Bahamas, estimated that annual taxpayer subsidies to the Public Hospitals Authority (PHA) and Water & Sewerage Corporation can be cut by a sum equal to 0.8 percent of economic output by implementing true “cost recovery” measures.

In the PHA’s case, this would involve the imposition of fees for persons “with greatest capacity to pay” for use of the tertiary care services offered by the Princess Margaret and Rand Memorial hospitals.

These savings, the IMF suggested, could then be repurposed to finance education, social welfare and primary healthcare spending. It noted that the Government’s spending on education, as a percentage of gross domestic product (GDP), is well below the Caribbean and Latin American average while the public healthcare system has been producing “worsening” care and treatment outcomes for the past decade.

“Greater cost recovery by public corporations would reduce the net subsidy they receive from the Budget,” the IMF argued. “Collecting payment from patients and enforcing fees for health services would reduce transfers to the Public Hospital Authority (PHA) by around 0.7 percent of GDP.

The combined savings estimated by the IMF from the PHA and Water & Sewerage Corporation measures is 0.8 percent of GDP - a sum equivalent to $116.53m based on the GDP estimates contained in the 2023-2024 Budget. Almost $102m would be generated annually from the imposition, and collection, of PHA user fees.

“Current subventions to the PHA account for approximately half of annual current subventions to SOEs, due largely to little to no cost recovery and a system of exemptions and non-payment for most services,” the IMF added of an entity due to receive a $222.156m taxpayer subsidy this fiscal year.

“Moreover, hospital benefits accrue primarily to those with higher incomes. The collection of fees for most services offered by the PHA, means testing to require those with greatest capacity to pay, linking future price increases to the rise in operating costs, and greater efforts to reduce the write-off of unpaid bills could yield annual savings of up to 0.7 percent of GDP over the medium-term.”