Continuing Care: BHB Absorbs $14 Million Loss

Speaking on why the Bermuda Hospitals Board [BHB] isn’t prepared to absorb the loss of running the Lamb Foggo Urgent Care Centre, the BHB Chairman noted that BHB is already absorbing a $14 million loss on its Continuing Care Services.

This statement was made when BHB Chairman Mr. Jonathan Brewin and BHB CEO Venetta Symonds spoke at Sandys Rotary recently.

Mr Brewin said, “There is very little that goes on at our hospitals that doesn´t end up as a leading story in the news, so while I doubt I can tell you something new, I do hope I can provide some context and colour to the challenges and opportunities that we are facing at BHB. Each one of us takes our health seriously. It is our most important possession.

“Likewise all of us at BHB take our responsibilities to provide our fellow Bermudians the very best of care when they are at their most vulnerable. So in that context I´m not going to be subtle about the key point I would like to make tonight.

“Change is not just needed in the health care system in Bermuda. It is unavoidable, if we want modern, financially-sustainable and affordable services which genuinely put the patient first.

“BHB is already setting its sight on modernizing its services, governance and operations, and I am looking forward to sharing more with you about this tonight. But if only BHB evolves, and the private health system does not, costs will still spiral and patients will not receive consistently high quality care at best value. We cannot make the changes needed alone.

“I might as well start where the big news is and talk about BHB ceasing to provide urgent care services from the Lamb Foggo Urgent Care Centre. Let´s start with the reason for ceasing the service. BHB will possibly be heading into debt by the end of this fiscal year and the urgent care centre averaged a loss of about $250,000 each year.

“I have heard it asked a few times why shouldn´t BHB ´t just absorb the loss, for the common good? Well, BHB is already absorbing a $14 million loss on its Continuing Care Services, as government ceased paying for residents this fiscal year.

“It is for the very specific good of this vulnerable population in CCU that we keep the service running, despite our Long Term Care services running at a $12 million loss this year. Our residents have nowhere else to go, and the safety of our patients and residents is the most important thing we strive to achieve.

“But what about the safety of the people in the East End? Well, most of the 14 people a day who accessed the urgent care centre had minor ailments that could either be appropriately managed by their GP, or would not be made worse by the 15 to 20 minute drive to the Emergency Department at the hospital. Quite simply, there are good alternatives and options for these people.

“While we do recognize the safety implications of having a medical service in the east when the causeway closes, this is a rare occurrence. There will be less costly ways for this to be provided other than keeping the evening urgent care service running for a causeway closure that might happen once or twice a year. And there are major opportunities for us to work with primary care or other healthcare providers.

“Finally, the cost of an urgent care visit to the patient is $422- the cost of a GP visit is half of that, and the cost of the visit to Emergency is about $270 for a very minor condition that does not require diagnostic tests. The high cost service lost money for BHB, and it cost the system dear. And we all pay for that in rising premiums.

“The closure of this service is just the start of the process. BHB has to look at all the services it provides and ask the same questions- are we mandated by law to provide it? Are there better value options for patients provided elsewhere? Can we reorganize how we provide services and improve collaboration and coordination to reduce the costs of care for Bermuda?

“The driver behind this strategic rationalization is financial- we are running out of money, just like many other private and public operations in Bermuda. The financial health of BHB is the Board´s mandated responsibility and I will tell you more about what we are doing to address it.

“The financial problems BHB is suffering relate to many things, including an increase in services that drove up costs and saw staff numbers rise from about 1,500 in 2007 to 1,850 today. The recently announced audit report reported loose controls that did not ensure best value. As mentioned, BHB lost the geriatric subsidy that paid for the $14 million a year Continuing Care service.

“Finally, the establishment of revenue caps against a backdrop of an unregulated healthcare system meant BHB lost millions of dollars in providing services for which it could not be paid. In addition, BHB was notified in September that there would be a charge for work permits. This is the first time for BHB, and we estimate it will cost BHB about $650,000 annually.

“It is true that the commencement of the service payments for the new acute care wing will cause us even greater pain when they start next fiscal year, and there will be the operating costs related to the additional space.

“If things do not change, BHB could be in debt to the tune of about $200 million over the next five years. If they get worse, that number looks even bleaker. BHB cannot afford to maintain the status quo. More importantly Bermuda cannot afford it. Since the Board was appointed at the beginning of this year, the financial issues have dominated.

“We have the benefit of reviews on our clinical and corporate governance, on our financial situation, physician compensation and the Auditor´s Report. The findings of these reports have a consistent message- BHB must modernize and implement best practices with regards to governance, financial reporting and clinical and operational decision-making.

“The benefit of all these reports, which are publicly available in summary form, is that BHB has a very clear roadmap of what it needs to do to meet these standards.

“It was also gratifying to see reduced costs at BHB, according to the unaudited financials we released in October´s latest quarterly report. But revenues also dipped – this was the impact of BHB controlling the use of diagnostic services.

“It helps keep us within caps, but it hurts us and requires even greater pressure on driving down costs. BHB and Bermuda have to rapidly address the strategic reshaping of services and greater regulation of the system. This is needed to help us on the road to financial sustainability.

“BHB needs to agree with stakeholders such as Government, physicians, the Bermuda Health Council and the general community what services it is best placed to provide at best value, and which services are more efficiently provided outside of BHB.

“Long term care is an obvious example, and great collaboration, coordination and communication is needed to ensure sustainable solutions that work for Bermuda are established.

“I have also established a BHB Financial Sustainability Steering Committee, which includes Board members, senior management and people from the community with economic, business and financial expertise. We will be making recommendations on greater efficiencies. A working group is also overseeing the implementation of the Auditor´s review recommendations.

“This will strengthen governance and decision making at BHB and in the long run will help us run a much tighter, more efficient ship. We are being held accountable by the Auditor General, and will be making a report on our progress in December of this year. Greater regulation in the entire system will also improve BHB´s ability to gain a firmer financial footing.

“Mrs Symonds will speak to this in more detail, but I was very encouraged by the Throne Speech last week, which announced that there would be greater controls on people bringing in healthcare equipment to compete in the market. That is a good thing for Bermuda and will help control new services that are not supported by a definite need.

“In conclusion, I want to assure you that the BHB Board which I chair is fully committed to ensuring that all Bermudians have access to high quality healthcare. The challenge we face is huge but we are undaunted and stepping up to make the changes needed. I thank you and look forward to your continued support.”

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