|Special Report (Oct. 13, 2012): Nat’l health insurance coming soon (Part 1)|
|Written by By JASON SMITH|
|Friday, 17 February 2012 13:47|
Health care in the Virgin Islands was about to become more accessible, more affordable and better quality, said Mr. Walters, then the minister of health, education and welfare.
At the 1994 BVI Medical Conference at the Prospect Reef Resort, he introduced “A Healthier Future for the BVI,” a United Kingdom government report commissioned in 1988 to begin the process of “comprehensive” reform here.
“Over the past year, as we have watched the news on television, we have seen that health care reform is a major goal of [United States] President [Bill] Clinton,” he said at the Jan. 31, 1994 meeting at the Prospect Reef Resort. “Here in the BVI, health care reform issues are very much on the agenda.”
Seventeen years later, they still are. Though the 1994 reforms reorganised the Department of Health and added new staff positions, the future promises more substantive change. This could come in the form of improved hospital facilities and universal health insurance, two long-delayed initiatives that policymakers pledge will finally come into effect next year.
The proposed National Health Insurance system, a government-run insurance plan designed to be compulsory for all VI residents, may be the biggest change for the estimated 30,000 residents it will cover. Details of the plan are still being worked out, but medical providers, insurers and businesses are watching cautiously, wondering how they will be affected.
Tax on wages
If NHI comes into effect next year as scheduled, it will be funded mainly by a tax on workers’ wages at a rate yet to be determined and cover a range of basic services, according to Petrona Davies, permanent secretary in the Ministry of Health and Social Development. NHI will alter the territory’s health care financing system, reducing the need for overseas hospital visits by funding health promotion efforts and major quality improvements at Peebles Hospital, she said.
“What we don’t want is a situation where your access to health care is dependent on your ability to pay, and health becomes a business, a commodity that only certain people can afford, because we don’t feel that is in the interest of anybody,” Ms. Davies said in a July interview. “It doesn’t serve anybody if we have that sort of society, so national health insurance is just a tool to help us achieve that objective of universal health care.”
Government is already heavily involved in providing and funding health care. Under the Public Hospital Ordinance, several groups receive free medical treatment from Peebles Hospital: residents 65 and older, schoolchildren, the mentally ill, the indigent, and police, fire and prison officers. Additionally, government offers insurance benefits to about 6,200 employees, their families and retirees through the Bupa Insurance Company. The Social Security Board also covers workers who get injured on the job.
Currently, though, about 15,000 VI residents are without health insurance, according to Dr. Karl Theodore, the leader of a University of the West Indies consulting team hired by government to implement the NHI project.
Though national insurance was mentioned in the 1994 health reforms, the whole concept of health insurance – public or private — is a relatively new one in the territory. VI government workers have had health insurance benefits since 1993, and Caribbean Insurers Limited was among the first to start offering private policies to VI consumers in the 1990s.
“Before, we didn’t have health insurance. You went to the doctor, you paid cash,” said Jacqui Malone, a director with Caribbean Insurers.
Over the years politicians of both major parties have supported the idea of a national insurance programme.
Dr. Orlando Smith, then government’s chief medical officer, said in a February 1994 interview that residents were struggling to pay high overseas hospital bills.
“The medical bills end up much higher and the person ends up having to pay for it. We have to provide some kind of universal insurance system,” Dr. Smith said at the time.
Then-Chief Minister Ralph O’Neal spoke similarly during his 1996 budget speech under the Virgin Islands Party government, but he voiced concern about the financing for such a system.
“The success or lack thereof of any such scheme can determine the economic and financial solvency of our country with its small, fragile, open economy,” Mr. O’Neal said.
After the National Democratic Party took power in 2003, Dr. Smith, the new chief minister, signed a $716,000 contract with the University of the West Indies Health Economics Unit to conduct an economic feasibility study of the insurance plan.
After the VIP retook power in 2007, the insurance plan received further study and Cabinet signed a $605,941 contract in August 2009 to implement it.
Dr. Theodore, the leader of the UWI consulting team, said the project is still on schedule for implementation next year. One remaining hurdle is the installation of an information technology platform to run the software package that manages the plan, Dr. Theodore said.
Ms. Davies said Monday that the tendering process for the platform is under way. Additionally, a draft bill authorising the NHI plan has been written and will be presented to legislators for their consideration in the future.
Before the final approval, though, the ministry plans to introduce NHI to the public at a series of consultation meetings scheduled to begin in November. The detailed proposals of what the plan will cover and how it will be funded will be discussed in the consultations, she said. The outcome of those meetings will help shape the plan and determine when it can be implemented.
The NHI’s funding likely will come from a combination of employee contributions, taxes on items such as alcohol or cigarettes, and general taxation, Ms. Davies said, though the ultimate funding structure will be decided by Cabinet and HOA members.
Though the exact benefit package is still being determined, Dr. Theodore said it likely will include “all the services that are now available … in the country and those that aren’t available [on island].”
He added that workers’ dependants will see improved access to care, as the single payer’s premium covers the entire family.
“The biggest benefit is that what you’re going to have is a system which makes health care of good quality available to every BVI citizen or resident. You don’t have to have money in your hand to access care,” he said.
Those benefits, though, will only be achievable in the long run if government is able to fund the programme sustainably.
A 2009 International Monetary Fund study of the financing of universal health insurance plans in the eastern Caribbean found that most plans are funded either through general taxation or mandatory payroll taxes similar to the VI’s Social Security system.
Because populations in these countries are generally growing older and wealthier, there is a shift toward chronic diseases such as diabetes, which can require continuous lifelong medical care. Diabetes alone is expected to afflict 44,000 residents combined in Antigua and Barbuda, Dominica, Grenada, St. Kitts and Nevis and St. Vincent and the Grenadines by 2030, according to the study. In general, the older the population, the more expensive the insurance plan.
Ms. Davies said an aging study is currently under way here, but the VI has a relatively young population with only five percent of residents 65 and older. The majority of the public falls within the 44-to-64-year-old age group that could burden the system eventually, she said. Those demographics make prevention key.
“We have to be serious, all of us: private sector, public sector, the whole country. We have to take serious this effort to emphasise prevention control and not rely on bigger hospitals and more doctors, because we’ll never keep up with the demand that way,” she said.
Some private insurers, though, are eyeing the NHI plan cautiously. They wonder if their role in liaising between premium-paying consumers and medical providers will be supplanted by the government plan. If the plan replaces private coverage, insurers may be reduced to offering supplementary coverage or helping government process its own claims, they say.
“One would presume that we would have to come up with a new policy that provides coverage in excess of the health insurance. But when you do that, how many employers are going to want to pay the extra cost for their employees?” said Shan Mohammed, managing director of NAGICO Insurance. He added that the differences might lead to a disparity in coverage, with lower paid employees being “stuck” with the government plan as their employers drop coverage.
Ms. Malone, of Caribbean Insurers, said many consumers won’t settle for a basic plan.
“People have become so insurance-savvy in the BVI. They know about insurance: what is covered, what is not, and what they’ve become accustomed to. So people are not going to settle for less than what they are accustomed to,” she said.
Ms. Malone added that government might ultimately involve private insurers to use their experience to process and administer the claims. If government does adopt the plan without involving the private insurance industry, job losses in the sector could result, both insurance company officials said.
But Deputy Premier Dancia Penn, the minister of health and social development, sought to allay some of those fears in a July HOA meeting. Ms. Penn said private insurers may be able to contribute in “the areas of case management, supplemental coverage, reinsurance, and overseas care, particularly given the large existing overseas provider networks that most providers currently have.”
With any insurance plan — public or private — expensive claims that might result from cancer or an organ transplant are spread out over policyholders’ premiums. Underwriters control costs of the plan by pricing policies and determining which claims to honour.
“If you don’t underwrite an application properly, you will haemorrhage in the costs,” Ms. Malone said in a June interview.
Ms. Davies said that the Social Security Board will manage the financing of NHI, but the funds will be “ring-fenced” and not co-mingled with other SSB funds.
“What they deal with is income protections, sort of: insurance, similar skill sets in terms of beneficiary services, compliance control, those types of skills. In many jurisdictions, health insurance is a function of social security, so we saw it as a natural fit,” she said.
Private medical providers, too, wonder how they will fit in to NHI. Alred Frett, co-founder of B & F Medical Clinic, said he’s been to one meeting about the insurance plan but hasn’t been further consulted.
“I need to see what it covers, what they expect, what they’re offering. Then we can go from there,” he said.
Without that information, Mr. Frett remains sceptical.
“If you can tell me how the providers will be paid at a point in time when government is obviously going through crunch time, let me know. But until you can tell me that, I just see it as foolishness,” Mr. Frett said.
Dr. Heskith Vanterpool, the owner of Eureka Medical Clinic and The Bougainvillea Clinic, said that he, too, worries about the plan’s funding.
“I certainly believe that everybody has the right to have access to decent health care services, but I worry about it being able to sustain itself, and you may end up in a situation where you have socialised medicine, and therefore private practitioners are going to be under tremendous pressure,” he said.
Dr. Vanterpool, whose two clinics employ about 15 specialist doctors, worries that consumers won’t be willing to pay the difference between what the government’s plan covers and what private practitioners charge.
“I worry that it won’t be able to cover a significant amount of the private medical fees and people may end up saying, ‘Well, I can’t afford to pay for that,’” he said.
Some providers see promise in NHI. Dr. Mitchel Penn called it “essential” but said he hopes that the implementation is done right the first time. Consultation is an important part of that, he said, because if private medical providers aren’t a part of the planning they may not participate in the plan.
“If you’re not talking, you’re not going to get it done right. If you’re afraid to hear opinions, you’re not going to be able to fix the issues before you implement. There’s a political rush by both parties to be the one to implement it, and that’s always a bad thing when you take health care and try to mess it around with politics,” Dr. Penn said.
One of the biggest challenges for the viability of the insurance plan will be VI patients’ tendency to seek care in St. Thomas and Puerto Rico instead of locally, insurance company representatives and government officials said.
If there are restrictions on seeking care overseas, VI consumers may be forced to adjust their mindset, according to Mr. Mohammed, of NAGICO.
“We live in a country where the culture has been that if I want to travel to the US or St. Thomas then I have that option. If you take that away, then you have to create a whole new culture. And that to me is going to be a difficult sell,” he said.
Mr. Theodore said the NHI plan will encourage the insured public to receive treatment in the VI but will cover essential services that aren’t available locally. But minimising overseas costs is crucial to the viability of the plan, he said.
“If you have to control the cost of the national health insurance system, you can’t have an open-end overseas component,” Mr. Theodore said.
Ultimately, much of the success of the insurance plan will depend on infrastructure, particularly the long-delayed construction of the new hospital and a resulting improvement in medical services, Ms. Davies said.
Ms. Malone, of Caribbean Insurers, said, “If you don’t have that in place, then you’re not going to avoid people going off-island, and that has to be taken into account in the costing of the plan. If we have our infrastructure in place, we can do that, but if we don’t have the infrastructure in place, it’s going to have to be outsourced.”
|Last Updated on Friday, 17 February 2012 14:16|