Column: Health Plan, What’s In A Name?

December 20, 2019 | 16 Comments

Dr Ricky Brathwaite Bermuda Nov 14 2019[Written by Dr. Ricky Brathwaite]

The “Bermuda Health Plan” is an updated design of the current “Standard Health Benefit”. This Benefit was established in 1970 through the Health Insurance Act as a way to ensure that residents of Bermuda are protected against being sold health insurance that may not be beneficial to their health and financial situations. More specifically, it established a minimum level of services that a company must cover to be considered a health insurer.

Think of the possibility of a new company entering the market and selling someone a health policy that only includes coverage in the event that you tear your Achilles tendon [I have torn this tendon twice so I think it serves as a good metaphor]. Allowing a new insurer to only cover tendon tears, would also mean that an employer, who was required to provide health insurance, could technically purchase a health insurance policy for their employees that did not protect them from health conditions or events that could bankrupt them. This would go against all principles of Universal Health Coverage.

Currently, the government of Bermuda sets these core benefits, and the insurance companies must sell them to you when they sell any health insurance product. This inclusion is non-negotiable for health insurers. Your insurance policy must include these specific services at regulated prices per the Health Insurance [Standard Health Benefit] Regulations 1971. This governmental intervention in healthcare is longstanding.

As lifestyles have changed, so too has what is required to protect the public’s health. You may be asking yourself, why does a government [today's or the former] care what the people are protected from? The simple answer is that countries are made up of people, and an essential part of being a country is being able to give everyone a decent standard of living. This standard of living is what we often coin in technical terms as our economy.

To have a sustainable economy, you need to have a significant volume of productive people that contribute to it. These individuals must not only take from the proverbial pot, but they should also be expected to put into the pot as well. So it is in the government’s best interest, and also all involved in the economy, to make sure the population, as a whole, is as healthy as it can be.

The Standard Health Benefit was initially used to support health by guaranteeing the coverage of care in the hospital. In other words, if you tore your Achilles while working, you could go to the hospital and get it fixed – allowing you to get back to work as soon as possible. This process not only protected your employer against extended loss in productivity, but you as an individual against not being able to support your family as a result of the injury or the cost of the care. It can also be said that this model works by keeping those who work, healthy enough to support those who are too young to work, or those who have passed their most productive working ages.

Standard Health Benefit used to be called Standard Hospital Benefit. In 2015, the Hospital part of the name was changed to Health. This change was made because it was agreed that some of the services that were set aside to be done in the hospital could actually be delivered by the broader health community. For example, a diagnostic imaging exam for that Achilles tear could be done in facilities other than the local hospital. As a result, the government required insurance companies to cover select services that originally could only be done in the hospital at approved community locations.

We are now at another crossroads where we realise that even “Standard Health Benefit” as the descriptor for services that used to only be done in a hospital but can now be done in the community, is not comprehensive enough for our needs. Today’s existential problems of torn Achilles tendons have now been joined by a diverse set of less acute conditions, which require more holistic approaches.

That tendon has morphed into chronically high levels of sugar in the blood and high pressure in the arteries. These things are harder to fix than a torn Achilles because they are not only physiologic but also educational, socio-economic, environmental, and personal. As a society we have also quickly matured to better understand the importance of mental health care and the challenges involved in developmental disability.

We better understand the implications of aging and potential strategies to prevent early-onset dementia. We know more about back pain and non-invasive surgery. As a society we are also beginning to realise that long term care is not just a financial issue but also relevant to the health system.

The insufficiency of this term “Standard Health Benefit”, also reflects a need to think of protecting the public’s health less in terms of a reactive “benefit” and more strategically in terms of a “plan” — a plan to protect our country’s future. This plan has to be forward thinking and acknowledge what it means to be productive going into 2020 and beyond.

We have to acknowledge the continuing evolution of what the global marketplace requires in many workplaces; the requirements of critical thinking and oversight of automated processes in sedentary environments, whereas the past often required more manual labor. These global changes do not mean that the concept of the economy has changed, however it does put more onus on governments [and the private sector] to be more creative in how they protect the whole of a person and not just their connecting tendons.

In comes the “Bermuda Health Plan”. The associated proposals at their core are intended to recognise that isolated health service delivery must morph into more proactive prevention and more integrated and flexible programmes. This is especially important as we better understand the causes and impacts of non-communicable chronic conditions.

As a medical community, our health professionals must be lauded for doing really amazing things to reverse the symptomology of these conditions through the advancements of modern medicine. Such advancements are helping us to live longer and manage our quality of life.

However as we applaud their immeasurable medical contributions, our typical workers still retire at about the same age; and during those mid to later years are requiring a multiplicity of intensive and expensive care plans for lifestyle diseases that have been picked up along the way.

These conditions are creating significant cracks in our economic pot, and the reality is that we as a society cannot, in the long term, afford –in health nor financial terms– the slow leak coming from these growing cracks. These conditions are the modern drivers of change, and no one, regardless of income or status, is immune to the risks associated with today’s profiles of disease.

Along with an emphasis on prevention and multi-disciplinary collaboration, there is another aspect of the proposed plan that is significantly different. A question has been raised in consultation rooms for over a decade, “If this package of services is intended to provide the public with essential protections, shouldn’t it be available for purchase?” The reality for most has always been that the market does not typically sell it. Legislatively it is possible, but fundamentally there are some flaws that are more magnified in today’s healthcare reality.

The current Standard Health Benefit does provide local catastrophic cover [100% local hospital coverage], but not much else. Today’s conditions require more case management and coordination of different community providers. They require more health education and counselling on diet. They require more comprehensive approaches than we have ever needed before, and sometimes they even require obtaining care overseas that is not available locally.

Right now, the required coverage under Standard Health Benefit is still too local hospital heavy and too prevention light; and unfortunately these are not your great-grandfather’s healthcare needs, this is the new world when it comes to our health. However, let me also make a disclaimer: there is risk in every health insurance product and each consumer needs to be very aware of what risks they are willing to live with.

So while the Bermuda Health Plan seeks to intentionally give people a viable choice to buy in a legislated package, the totality of the risks must be carefully weighed and robustly informed when potentially deciding to only make that purchase.

The concept of allowing individuals and groups to buy the legislated set of benefits as its own product is not meant to overcomplicate an already complex health system. It is meant to provide additional confidence in the minimum standard of care that is expected for everyone, and to provide a reasonable alternative for those seeking a more affordable and viable option.

Although this is not Standard Health Benefit morphing into the Health Insurance Plan [HIP], this redesign does shine a bright light on our current safety net products. To be transparent, the Bermuda Health Council believes that today’s government HIP is not an ideal package for many at high risk for health complications whom also may be purchasing HIP based on its greater affordability.

The reimbursements are low, the copays too high, the risk pooling is imbalanced, there is no prescription medication coverage, not enough case management, and not adequate integration with the public health initiatives. So while HIP is meant to serve as a safety net for a significant number of residents dealing with the types of conditions we are burdened with in this new world, it is our view that our current safety net has too many holes.

The beauty of free market capitalism, if properly coordinated with government interventions, is the opportunity to provide additional products that people want and need, or employers want to purchase for employees. This is a far cry from some systems of socialism where such free market opportunities and potential market gains are not allowed.

This is also different from strict National Health Insurance schemes where the only option that exists for any health insurance coverage is what the government provides. The hybrid public-private unified model is relying on both the public and private markets to protect this island’s residents. The percentage allocation of that responsibility for the protection is still being discussed in public forums and soon to be commenced working groups.

There has always been a symbiotic role that these stakeholder groups provide, and the truth is that the health system does not function without true collaboration between both. Our island’s health insurers have always done an excellent job of providing innovative and value-added supplemental benefits on top of the core package they are required to sell, and since every life has a unique health path, it is great that those options are present and their existence will continue to be required by the masses.

In the spirit of collaboration and to keep the price of protection more stable, it is actually rational to begin treating the population as one large team. In the past this has been done on paper, in the form of community rating the Standard Premium Rate [the cost of Stand Health Benefit plus the Mutual Reinsurance Fund], but such pricing has not always been carried out in practice.

When thinking about moving to a team approach or leveraging the concept of solidarity, the success of this Bermuda team is dependent on the success of its weakest parts — in the same way that the success of that pot in our economy is dependent on optimised contributions or the ability to reduce unnecessary withdrawals from every member of society. We all need a healthier society to manage the economy of the future and to uphold the sacred parts of culture that only a good level of health can shoulder.

These cultural conversations must include open dialogue about our willingness to maintain and even enhance the very fabric of our society. From a fabric-of-society standpoint, we cannot continue to lose the cornerstones of our communities and families to preventable diseases, we cannot ignore the challenges we face in mental health and trauma, we cannot cast a blind eye to homelessness or unsafe homes, we have to face the real harms associated with poverty and loss of hope, we have to reduce negative parts of our diets and encourage the health of our students, we have to give women the best choices and chances to deliver and grow healthy babies, we need to continue to encourage safer roads and fewer alcohol related tragedies, we need to ensure that we have adequate supports for our disabled friends and neighbors, we need to educate our communities on healthy aging, we need to get more people into primary care offices and dental chairs. We need to attack these enemies of health much sooner and more aggressively.

So is the proposed Bermuda Health Plan, change? Absolutely. But maybe not change in the way you are thinking. This iteration of the same name definitely looks different, but the goal is the same: To ensure that everyone in society has the certainty that there are essential supports available to them as they go through life participating in the economy. An assurance that the main health needs are adequately covered without putting any of us at risk for financial ruin.

A goal that everyone can have options of more affordable coverage without a fundamental trade-off of good health outcomes. As such, the Bermuda Health Plan, the Standard Health Benefit, the Standard Hospital Benefit, are all variations of the same idea. Yes, changing a name can often lead to confusion and even a short term identity crisis, but such changes should never inherently alter the purpose of one’s existence.

- Dr. Ricky C. Brathwaite, PhD, MS, MSHS; Acting CEO and Director Health Economics, Bermuda Health Council, [www.bhec.bm], a quasi-autonomous non-governmental organisation tasked with regulating, coordinating and enhancing the delivery of health services in Bermuda.

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Comments (16)

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  1. Nunya says:

    78% of the working population currently has major medical coverage (as per the Labour Survey released yesterday). This proposed scheme will reduce coverage for that 80% and force them to pay out of pocket for supplemental insurance to ensure that you retain the same level of coverage that they have now.

    In other words the vast majority will see their healthcare costs increase under this plan. No long, fluffy articles like the one above will change that basic fact.

    On top of that this change does not address the $700mn we pay on healthcare annually. It just shifts the cost onto the already strained taxpaying public.

    • Yes the proposed scheme will more cleanly delineate what is Standard Health Benefit and what is Supplemental. The actuarial modeling that has been done to date on one of the larger plans does not show an increase in premium due to changes to the SHB. However as is currently, this outcome will differ for the various groups or all individuals. It would be premature to come to either conclusion for all. As occurred with the change in hospital funding, some premiums increased and some decreased. This is where strategic discussions on how best to mitigate the impact of change must occur and was the impetus for having a specific working group just on creating an effective transition roadmap.

  2. sandgrownan says:

    Curtis is looking at the balance sheet. He’s horrified by what he sees. This is about taking a chunk of healthcare costs off the books because Bermuda is broke.

    This is a PLP owned mess.

  3. clearasmud says:

    Well written Article but it fails to explore any other options that could reach the same intended goal. IMO a better way forward would have been for the government to establish the new minimum and a price for it, offer supplemental coverage and price it then require the private insurers to do the same. Everyone would be able to see what is on the “menu” and the cost. If private insurers offered the exact same coverage at higher cost then we would see a natural unforced move to the government plan.To keep their customers the private sector would have to lower their cost to be competitive or exit the business, but this would be by choice.
    While I think the logic for what the government is planning is sound I am not convinced that they can accomplish it via the route they are taking.

    • Thats a fair comment regarding pursuing various options. No option is perfect. People point to Switzerland as the gold standard, but it really is so dependent on so many factors as to what types of pieces can work in a country. But your point is taken. The only caveat to what youve suggested regarding letting market forces create the balance is that you cannot guarantee that government could offer a lower price for supplemental because you would still need to take into account whether the people in the different insurance pools can be treated as apples to apples. The larger the pool the better you can forecast cost and reduce uncertainty in your projections. To date the smaller government pools are only able to be kept less expensive despite its higher risk, because the private sector and in extension the broader working public subsidizes with significant millions of dollars. I think the intended point of having the consultation was to have these types of points discussed as what you are saying. Unfortunately to date there have not been alot of solution discussions on the myriad of topics where gaps exist in our system. And part of that is as you may have felt, not the clearest and easiest to understand explanations and messaging at all times.

  4. Goose says:

    Medical bankruptcy won’t stop as a result of the Bermuda Health Plan unless it covers 100% of overseas care. The kid in the papers last week had a $300,000 hospital stay after an unanticipated emergency.

    If the Bermuda Health Plan contains coinsurance for US care at 80% then he’d have to pay $60,000 out of pocket. If the Bermuda Health Plan only covers 60% then he’d have $120,000 to pay out of pocket.

    How many of the 20% that are underinsured or uninsured can afford to pay $50k, $80k or $100k out of pocket to access life saving care in the US? The entire premise for a Bermuda Health Plan collapses if those that currently need the benefits can’t afford to access them.

    • The intial proposal that was put out to the public modelled covering 100% of the cost of overseas care that was identified by medical staff as being medically necessary. So it was proposed that overseas care would be treated just as equitably as local hospital care as long as it was medically necessary. As you are aware, if you are insured now and go to KEMH for an urgent issue, there are no copay. So in some ways maybe there shouldnt be panalties for needing care that just happen not to be offered on island. So, not sure where the conversation of overseas coverage at 60% or 80% came from as those were not put out for public consultatiob.

  5. Googamuga says:

    Dr. Brathwaide,
    Of the 5000 so called uninsured do you have any way to ensure that they will pay into this new scheme? How many choose not to be insured because they do not want to work but yet want all the benefits? Why should the working people have to pay for those that choose not to work. How do you propose to change that – by changing the health insurance system.
    May I suggest that some real costs be given and what the scheme might cover so the public can make an informed decision.

    • Mb says:

      Seriously Googamuga?? Choose not to be uninsured?? People Don’t want to work?? I don’t imagine this is the case for anyone except those with mental, substance and other issues … but I guess you in your lovely perfect world see that as ‘refusal’
      Put your MAGA hat back on and crawl back to your trumpian right wing world, please, if you have nothing constructive to offer in this debate

    • Having a goal of a less fragmented and more efficient health financing system is about everyone and not just those that are uninsured. The money that is currently spent in our system is not done with adequate oversight, accountability or per consistent standards. Theres good in our system but its like puzzle pieces that no one has taken the time to make fit right.Everyone could be getting better value for the money. So this is definitely not just about providing coverage for those that do not currently have it. And i believe that some of that bigger message is getring lost in this notion that this is all about reallocation or shifting of money.

  6. Kevin says:

    Unfortunately trying to fix the problem of inadequate healthcare of those who cant afford it and putting the cost on those who are paying for what they want. The down side is those who are paying will have to more for what they want …this is a another fantastic brain child of the plp ….they cant get their way out of a wet paper bag ….they simply should resign if they were employees and had a management team they would have been fired for lack of performance

    • Hopefully this is not what was interpreted as the point if the article. The purpose was to provide a bigger view if the intent of the proposed changem The reality is that everyone is getting some type of care now, insured and uninsured. Whether that care is the right care at the right time in the right setting is a totally different issue. But make no doubt about it, when and where someone receives their care impacts us all.

  7. Listening says:

    Many people will agree that there should be a basic level of health insurance coverage for the whole population. Where most people disagree is that the Government has already decided to provide this basic coverage using a “unified system” where Government is the monopoly – the only insurance provider offering the basic health insurance plan.
    Even if the plan is administered through a third party, Government is the provider, payer, decider and owner of the plan. That is the part of the Bermuda Health Plan that gives most people pause.

  8. The government inherently does not provide healthcare services so using the economic term to describe their regulation of SHB or for them to serve as a payor would be to oversimplifying the term monopoly. This would imply that government also has a monopoly on public education or that the BMA is a monopoly as it has regulatory oversight over all international business. I doubt international business end consumers would identify the BMA as restricting their options on what reinsurance companies they choose. But I do understand that you are referring to the idea of one entity having signicant ability to set some of the fundamentals of a market. However I would argue that setting the rules of play does not make an entity a monopoly in the economic sense. But yes I do appreciate what many people are voicing concern about.

  9. B to M says:

    The wealthy Bermudian couldn’t care less about this change unless they own a business. Business owners will face increased costs for their employees who will require the supplemental insurance coverage they enjoy today, plus this new, more costly plan. This will hurt the working middle class most. And it’s going to cost a bomb to administer.

  10. Provider says:

    The article has a lot of information. It is written for a different audience than those who need the information on this website. Unfortunately, the average person who is confused about “what is in a name?” leaves this article even more confused and less confident that the government really want s them to be clear. The basics about internet article writing has been ignored. Too Long, Language too complex, analogies to vague and purpose lost. Not a good sign as a leader in public policy. This doesnt mean what he is saying is wrong its just not very clear. Secondly when one reads it one is not clear on the purpose of the proposed change and what other options have been considered to address the root problem. Is it the cost of healthcare, is it to cover the uninsured and underinsured, is it to create incentives to reverse chronic diseases, is it to improve quality, is it go get control of insurance dollars to offset other expenses the government has? WE DONT EVEN KNOW WHAT IS BROKEN SO WE CAN FIX IT!…. Who is complaining, patients? Poor? the Business? Doctors? PLP members? People? What are we doing and why? Lastly…WHO IS PAYING? There is no way we can get more for less. More will always cost more.

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