PLP’s DeSilva & OBA’s Jackson On FutureCare
[Updated] In a recent newspaper advert, the One Bermuda Alliance noted, “The OBA will make FutureCare financially sustainable – without increasing Bermuda’s debt- seniors can continue to enjoy health coverage for years to come.”
In response, Health Minister Zane DeSilva asked, “First off, FutureCare is financially sustainable, but, if they believe it’s not how are they going to change FutureCare’s financial situation? The only way they can fulfill their pledge is by increasing premiums that our seniors pay or cutting FutureCare benefits.
“After a lifetime of hard work, our seniors deserve to have access to quality, affordable health care. That’s what the PLP has delivered. Now, the OBA is telling us that they are going to fundamentally change FutureCare, but, they’re not telling us how. This is what we’ve come to expect from the party of no ideas and no solutions – nice sounding platitudes that don’t really tell Bermudians what they plan on doing.
“But, the bottom line is this. The code that the OBA is talking about in their advert can only mean either increased premiums or reduced benefits. It’s time for the party of no ideas and no solutions to be honest with Bermuda’s seniors about their plans,” concluded Minister DeSilva.
In reply to the statement from the Health Minister , Louise Jackson, OBA spokesman for Seniors, said: “The current Government’s Health Minister appears to feel the only way to hold onto power is by fear-mongering and misleading Bermuda’s seniors.
“The OBA believes Bermuda’s seniors deserve better. They deserve the truth. So for all of us in the OBA, let us once again state for the record our position on FutureCare for the minister.
“The OBA is committed to ensuring seniors have access to affordable prescription drugs, doctor’s visits and the high quality health care they deserve.
“The OBA will change this Government’s unfair practice of charging Bermuda’s seniors two different premium rates for the same FutureCare benefits.
“The OBA will ensure that FutureCare is financially sustainable without increasing Bermuda’s debt so seniors can continue to enjoy health coverage for decades to come.
“The OBA’s commitment to Bermuda’s seniors is unwavering and the OBA remains dedicated to ensuring that every Bermudian’s golden years are the best years for themselves and their families.
“The only way to ensure that is to ensure that Bermuda has a Government that puts its seniors first,” concluded Mrs Jackson.
Update 12.44pm: In response to Mrs. Jackson, Minister Desilva said: “There they go again! They tell us that they are going to make a financially stable programme “financially stable” without increasing the debt. If they think the programme is not financially stable and they don’t want to increase the debt, they have two choices: cut benefits or raise premiums. What do you plan to do, OBA? Bermudians deserve to know.
“The fact of the matter is that the OBA isn’t willing to make the tough calls. They’re offering no real ideas and no real solutions to Bermudians.”
“But, the bottom line is this. The code that the OBA is talking about in their advert can only mean either increased premiums or reduced benefits. It’s time for the party of no ideas and no solutions to be honest with Bermuda’s seniors about their plans,” concluded Minister DeSilva.
So , the last 14 years has done exactly what for The seniors?
seems to me it is looking fairly bleak.
Ummm… open your eyes. The PLP passed the landmark FutureCare initiative which dramatically increased medical coverage and prescription drug availability. That’s like saying the FDR did nothing for seniors in the US after he passed Medicare.
For some strange reason I think a certain doctor benefits more off of the prescription drug availability than our seniors. For that very reason medical marijuana (cheaper, low risk of dependancy, extremely low risk of harmful side effects, virtually no risk of death) will never find a place here, that would cut the money into his pocket and create competition with his generic pharmaceutical buddies.
FDR did not introduce Medicare. It was introduced in 1965 as part of President Lyndon Johnson’s “Great Society” expansion of the welfare state in the US.
Get your facts straight!
You mean FDA if your gona try to take the name atleast come correct. Someone let me know future care is really a toned down version of the Obama’s national heath plan yes?
LOL
Huh? I was talking about a certain person benefitting from generic pharmaceutical drugs and a little on medical marijuana. Absolutely nothing to with Obama, the FDA or the most corrupt and hypocritical nation on the face of our planet. Wrong guy perhaps?
hmmmmm, who to trust to run a medical plan, hmmmmmm
Its already been proven that Future care cannot be sustained in its current form Zany so quit the BS and fix it. Asking the OBA what their fix is makes you look helpless and inept. Oh, BTW thanks for cleaning up the devonshire marsh land that was mis-used just before the election! LOL
The question is simple – how does government plan on paying for FutureCare? While the idea is great, as always the devil is in the details. As Christian points out here:
http://www.politics.bm/archives/2009/11/get-him-a-course-in-stats-stat.html
it doesn’t appear that the government has done any analysis of the costs of this program. And even if they have, what makes them think that analysis is any better than the ones that were performed by the US when Medicare was introduced?
“In 1966 Medicare cost $3 billion. At the time the Ways and Means Committee estimated that it would cost $12 billion in 1990 – instead it cost $107 billion (a factor of 9).”
http://reason.com/archives/1993/01/01/the-medicare-monster
The fact that different aged people (seniors) are paying different amounts for the same coverage is quite normal for any insurance company. What it means is that the more likely you are to use a service, the more you will have to pay for it.
The fault in your logic is that private insurance companies charge different people different premiums due to their risk as an insured. They do not charge people with similar risk profiles different premiums solely on the basis of when they joined the program, which is exactly what FutureCare does. That is the inequity in the system! If you were in the know when FCare had its soft launch and got in right away, you are now allowed a lower premium than those who weren’t and had to wait for the second enrollment period. That is what stinks in this whole matter.
The pool of insured seniors are far more homogenous in their risk profile than the population as a whole. If FCare did charge seniors different premiums based upon their risk profile, as normal insurance companies do, the spread from high to low in premium costs would be much tighter than that spread for the population as a whole.
FCare – another poorly designed and executed PLP initiative!
_What could the OBA do differently with FutureCare?_
One way to make FutureCare sustainable is to focus on the source of outsized claims, the Bermuda Hospitals Board. Remember that the Minister controls the Hospital in two ways:
1. Setting prices
2. Appointing the members of the Hospital board (who in turn hire the CEO and Chief of Staff).
First, let me provide some context:
1. FutureCare is an insurance plan/scheme offered by the government. Seniors pay premiums and if they get medical treatment, FutureCare pays some of the bills.
2. FutureCare spends more on claims payments and expenses than it receives in premiums so by one measure it is “unsustainable” today. Medical bills are going up faster than FutureCare premiums are going up; in by itself, FutureCare is “unsustainable” tomorrow.
3. On August 1, Minister Desilva said “HIP and FutureCare are social health insurance programs which are designed to receive financial support from Government. This is not a loss. Rather, it is part of the design of the plans. If their premiums were set based only on claims, the premiums would be much higher and unaffordable.”
4. Taxpayers provided a subsidy of about $5M last year to cover the FutureCare shortfall.
5. There are many good reasons to subsidize healthcare for seniors. Indeed, the youth, aged, and indigent subsidies have been in place for 40 years; last year the financial support to children, elderly and the indigent amounted to $110M.
6. The politics of FutureCare were driven by the simple claim that FutureCare would pay for itself. The PLP said it would pay for itself. The opposition at the time disagreed. It seems that the government has acknowledged that FutureCare is, in fact, instead a subsidized plan.
_The OBA has talked about the Hospital before_
In July, the OBA held a press conference to discuss the recently released National Health Accounts. The National Health Accounts, reported by government, showed that high claims from the Bermuda Hospitals Board drove up premiums for every insurance plan on the island (FutureCare, GEHI, Argus, Colonial, BFM etc.).
_What is the relationship between government and the hospital?_
Every year, the hospital proposes a fee schedule, a price list as it were, to the Minister of Health. Every service or combination of services at the hospital has a price. The Ministry and the hospital can negotiate these prices. However, once the Minister and Legislature approve the fee schedule, insurance companies, private (like Argus and BFM) and public (like H.I.P. and G.E.H.I.), must pay in accordance to the schedule. In some cases the charge for the same treatment, in the hospital, has more than doubled in just a few years.
The Minister of Health has deflected criticism of the Hospital by pointing out that fee schedule prices only increased by 2% last year. Sharing that factoid misses the point. The folks paying the bills don’t worry about sticker prices or hourly rates; they worry about the final bill. The Chief of Staff (Dr. Thomas for the past few years until he was placed on paid administrative leave) determines _how_ medicine is practiced in the hospital. In turn, changes in the practice of medicine in the Hospital can increase the number of services provided or increase the use of expensive services.
Imagine taking your bike to a garage for an oil change. Here is a price list showing a 2% increase:
2011:
• labour (basic) = $70/hour and oil (basic) = $10
• labour (master mechanic) = $100/hour and oil (premium) = $15
2012:
• labour = $71.40/hour and oil = $10.20
• labour (master mechanic) = $102/hour and oil (premium) = $15.30
Despite a small bump in prices, the final bill can increase by much more. In 2011, you might pay $80 for an oil change (an hour of basic labour and a container of basic oil). The next year, you could pay $234.60 (two hours of master mechanic labour, and two containers of premium oil). In this example, the prices go up by 2%, but the bill almost triples. Two visits to the garage, but the expensive oil change looks wasteful and seems to benefit the garage more than the customer.
_So what?_
The effect on private insurance companies is straightforward. When insurance companies pay higher claims they charge higher premiums, which affect everybody.
The effect on government coffers is more significant than higher premiums. The government-run insurance operations also pay higher claims, so they must either increase their premiums to pay to those claims or run deficits, which the taxpayer ultimately funds. Note that the recently released financial results for G.E.H.I., H.I.P., and FutureCare, show mounting losses.
In addition, the higher fees charged at the hospital erode the ability of taxpayers to continue subsidizing health care for the young, old and indigent; these subsidies have been in place for more than 40 years. In 2011, higher fees pushed the cost of these subsidies to $110.6M, an amount greater than what government provides to support tourism [$35]; public transportation [$23M]; financial assistance [$37M]; and the fire service [$14M], combined.
The government must get a better handle on health care costs in Bermuda. It is not enough for the hospital to continue to raise prices in order to balance the books. Higher prices at the hospital hit the average person in many ways:
1. The average person pays more for health insurance
2. Government, as an employer, must pay more for its share of health insurance premiums
3. Government must cover the cost of deficits incurred G.E.H.I., H.I.P., and FutureCare
4. Government must pay more for the youth, aged, and indigent subsidies.
All of these increased government expenditures raise government borrowing needs and reduce its ability to provide other social services.
_Why don’t we ever talk about the Hospital?_
I find that the current government is quite defensive about the Hospital. September is half gone and we haven’t heard a peep from the Ministry on the following questions:
1. When will the BHB financials be released?
Note that on August 1st the Minister said “The Ministry is aware of the status of BHB’s audited financial statements for the 2011 fiscal year. It should be noted that the office of the Auditor General was only able to sign off on the accounts at the end of March 2012. The BHB will have their 2011 Annual Report which includes the audited financial statements ready for publication in August, 2012.”
2. Why was the Chief of Staff, Dr. Donald Thomas, placed on administrative leave and why does he continue to receive paycheck?
Note that the extra expense incurred by paying Dr. Thomas’s salary, _and_ the salary of his temporary replacement, Dr. Victor Scott Jr. would surely exceed the $100k needed to keep the Sunshine League open last year.
Voters and taxpayers should know that government has the power to tackle the rising cost of healthcare. With FutureCare, we are not forced to simply cut benefits or increase premiums; those are tweaks to the insurance policy. The government also has the power to tackle the source of some of the high costs that are driving up premiums for every single person the island, FutureCare included.
Andrew Simons
One Bermuda Alliance candidate for Pembroke Central, constituency #17
@ Andrew Simons: So glad to see this analysis on both blogs. I was about to recommend people to read it on RG.
One point I would like clarified. In the example of the oil change, I think what you are saying is that the increased hospital costs can be understood better if we correlate the master mechanic charges in the 2012 example to the “hospitalist” or ‘specialist’ fees that we will now be paying for, instead of the perfectly adequate basic care that we once received, but which has now been broken up into specialist areas with separate fees for each. Please correct me if I am wrong.
The answers to fixing Future Care are contained within this analysis but will the Government do it? I wish I could believe they will.
One thing for certain, there are more ways to tackle this issue than the simplistic “cut benefits or raise premiums” even if those are the only two options the government can see. No wonder they keep begging the OBA to tell them what their solutions are.
After all of that long spill, Mr Simmons OBA will do nothing. Health Care will remain the same. It is just political talking points to gain votes, nothing more, nothing less. As policy are in place, and any government will have to follow most of them. It is not a good response, in terms of how OBA will make it any different. The real question, is will they continue to provide healthcare to Seniors? As the OBAUBP never offered them any form of healthcare.
I find it very interesting that Mr. Desilva insists that the only way to fix the financial sustainability of FutureCare is to raise premiums or reduce benefits.
Mr. Simons provides a very reasonable argument that there are other methods, chief among them being seeing past all the political BS and evaluating the facts holistically.
However, I still think it’s interesting that the party which claims the only options are to either raise premiums or reduce benefits is the same party which created an unsustainable health plan in the first place. By this, I mean that FutureCare essentially cannot fund itself, (because by design the benefits exceeded the premiums), but must be subsidized by we the people, the tax payer.