Column: Commissiong On Health Care Reform

[Opinion column written by Rolfe Commissiong]

“5,341 persons in Bermuda are without health insurance.” – The Ministry of Health

“Our aim is to provide universal access to healthcare through these reforms while bending the cost curve downwards.” - Minister Kim Wilson

So-called free markets left up to their own devices can produce public good but they can also at times produce public or social harm. Our health care markets are clearly producing the latter and are certainly broken. Certainly then, when this does occur only government intervention into these markets can restore balance and equity.

It is no secret that the cost of living in Bermuda driven primarily by the rampant growth of income inequality over the last two-plus decades has been ruinous.

Its major corrosive impact has been on low and middle-income Bermudian families that have been its chief victims. Foremost among their concerns has been the extraordinary rise in the cost of healthcare. They are falling behind in their ability to finance their healthcare cost as the aforementioned extraordinary growth of income inequality and it effect on the costs of living eats away at their incomes and increase their ability to pay for health insurance.

The key question of the day is whether the health care system as currently constituted in Bermuda around a largely U.S style fee for service model – is broken?

I believe that all of the relevant evidence seems to confirm the view that it is and that evidence in and of itself is fairly compelling in making the case for root and branch reform as opposed to the mere tweaking of a status quo that is no longer serving the public interest and/or public good.

That is why the government has proposed to place all of Bermuda’s residents into one insurance pool as opposed to the four or five major insurance pools [private and public sector] that currently provide health insurance coverage for Bermuda’s residents. Although, it is proposed that individuals much like in Canada and other countries that use a single-payer system or its variant and who do wish to purchase supplemental private-sector coverage will be able to do so under the prospective plan that Minister Kim Wilson has touted.

The big change under this prospective reform will be that the government will be responsible for paying health care claims. As to the basic consumer and businesses this reform will provide a significant reduction in premiums for their health insurance coverage while providing more coverage.

Now there are a very small number of countries that have attempted to implement a pure single payer system that would provide free health care services for their citizens and have for various reasons – most commonly cost felt that they could not pursue that option. Although as cited in part two many more have in the developed world implemented these types of health care systems successfully.

But note the Minister and her government are not proposing a model that would provide a system of health insurance that would be free. Persons will still under the proposed model have to pay a premium to access the health insurance plan or plans that will likely be adopted. This will be a model that will be a variant or hybrid of what is called a single payer system. The key point is that the coverage will cost significantly less and provide more in terms of benefits for the vast majority than currently available. The path to universal coverage is not a cookie cutter one.

However, it is important as the consultative period unfolds that we keep the conversation focused on the broken system itself; with the operative word being system. No one including me will contend that we do not have some of the more highly qualified health care professionals and infrastructure relatively speaking in the world. The reality is we do. Their dedication and professionalism have been exemplary. Tens of thousands over the years have benefitted by the standard of care they have provided us. We also have private health insurers who have for decades in the post-WWII era provided a good product to the consumer through their employers with fairly good coverage.

But those days are gone and the current status quo that operated fairly optimally then is no longer sustainable now especially with a population that is rapidly ageing. Bermuda now has one of the oldest populations in the world with a median age of 44 years rivaling in that regard Germany and Japan. Accompanying that fact is that the aging population contributes significantly to a declining health profile of the overall population as will be highlighted in the second part of this two-part Op-ed.

Having said that it is inevitable if nothing substantially changes that the private insurers will increasingly face the Hobsons choice of adverse selection and be either unwilling to underwrite the risk associated with aging clients or be forced to offer plans that will see only the affluent and highly wealthy having access to their health insurance offerings. The latter would appear to be already happening. And that is one of the key factors driving up the cost of private health insurance.

In part two I will more fully examine the model being proposed by the government as the keystone of reform and seek to demonstrate that this direction is more consistent with best practice globally. In fact, Bermuda along with the US have been outliers in the so called developed world terms of the respective systems in place in both countries.

Finally as to the 5,341 persons without health insurance coverage cited above; once one adds in the thousands who are effectively underinsured and who are mostly on HIP – it represents a full 20% of our population who are either uninsured or underinsured. Stunningly, a full 91 percent of those persons are black.

- Rolfe Commissiong

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