Ministerial Statement by the Minister of Health Hon. Kim Wilson JP, MP
Mr Speaker
I’m pleased to give this statement today to update this Honourable House and the listening public on the Government’s intentions with respect to reforming the way healthcare is financed in Bermuda.
This is timely, Mr Speaker, because health insurance premiums have just been adjusted for their annual increases and the public is feeling the impact.
While HIP and FutureCare were shielded from premium increases, we have received reports, Mr Speaker, that some persons experienced insurance increases of up to 18 and a half percent. For a $540 premium – which would be low in most cases – this means an ordinary working person will have to find $100 dollars every month to pay their health premiums. This cannot be easy for most working families, Mr Speaker.
Now, to be clear, we understand how things like this have come to be. We are not here to blame insurance companies or the previous Government for such premium hikes. And we appreciate fully that an increase of this magnitude was not experienced across the board. But it’s a very real example of why we so urgently need to reform the way we finance healthcare.
Mr Speaker
We are using more healthcare services, and this caused the standard premium rate to increase by 6.4% from July 1st. There were no fee increases and only negligible benefit changes. So the only reason the premium for the minimum package increased is because our people are sicker, older and receiving more healthcare.
However, Mr Speaker, what is rarely understood by many is that the standard package is protected from larger increases because it covers a large pool of persons. The minimum package takes the full Bermuda insured population of over 48,000 people as one group, as opposed to supplementary benefits which only pool small groups.
So although someone may have had a health incident requiring intensive care and a long hospital stay, they didn’t have to foot that bill alone because the minimum package shared that cost across the 48,000 insured people in Bermuda. Had that person been in a group of only 5, 10 or 20 people, sharing the cost among their small group would have been a very heavy burden.
Mr Speaker
This way of pooling the risk among a very large group is the best way to protect all of us. It prevents large sways due to one or two catastrophic and expensive events. A large community pool spreads the risk, minimizing the potential impact on a few people And it averages out the premium among more people too, which also helps to reduce the impact on any one individual or small employer group.
However, Mr Speaker, the reason our health system currently can’t protect people from 18.5% premium increases is because the proportion of healthcare that is protected by that large risk pool is limited.
The minimum package, or standard health benefit, covers only hospitalization and a few non-hospital services. Everything else –most of the healthcare most of us use – is left to be priced in tiny pools among small and medium-sized employers or for individuals without group coverage – they are the most exposed of all.
It is examples like this that highlight the urgent need to change.
Mr Speaker
I have said in this House previously that in December 2012 the Finance and Reimbursement Task Group of the National Health Plan had produced, together with our actuaries, proposals on how we could reform our health financing.
These proposals were developed to protect policy holders from these large sways, to stabilize health costs and to move us towards ensuring everyone could have decent health coverage without breaking the bank.
The proposals were developed with wide consultation and were priced actuarially. The full report is now available online, on the Government web site as well as the Bermuda Health Council’s.
Mr Speaker
Given the bipartisan membership of the Task Group that produced this report, and the detailed analysis and consideration it provides, we are looking at those proposals again and are now considering how to advance them.
Two options are presented as well as a draft benefit package, and we are looking closely at how we can select an option, a package and roll out the reforms. Because I never want to hear again that anyone had to endure an 18 and a half percent premium increase, Mr Speaker.
The 2012 “Report on a Health Financing Structure in support of Bermuda’s National Health Plan” presents two ways in which our health financing can be improved and made more efficient. It assesses them on a number of criteria, including their capacity to pool risk, their financial strength, sustainability, administrative efficiency, and capacity to contain healthcare costs. And it provides tentative costs for a draft package.
At that time, the projected cost, if Government’s existing funding contribution remained, was around $450 a month per person for a package that included not just local hospitalization, but also some primary care, prescription drugs, dental care, long term care and overseas care.
That is correct, Mr Speaker. A solid, decent package that would protect anyone from a serious health event and give them preventive and primary care to help them stay healthy.
Since that time prices and utilization have increased, so the projected cost today will not be the $450 of five years ago. But it will be better than what most people pay for this level of coverage today.
This is within our reach and it’s achievable if we change the basic package and pool it differently. So that small groups don’t take those hits and 18 and a half percent premium hikes. And that is what I would like to see for all of our people: real protection when poor health befalls us, and decent premiums when we’re well.
Mr Speaker
While we are clear on the direction of travel, I understand fully that developing a defined roadmap to get us there is necessary at this stage. That is what my technical teams are working on, and I will be pleased to come back to my Honourable colleagues and update you again in the coming months as this work progresses.
But in the meantime, Mr Speaker, I want to acknowledge that work has advanced over recent years. Even without the large-scale reforms I seek now, there has been progress over the past three years, including under the tenure of the previous Government.
The Health Council and the Health Insurance Department assisted the Ministry in advancing some of these initiatives up to 2017, and periodic update briefs were provided. While health financing reforms or actual systemic changes were not generated during that time, other important advances that will contribute to reforms were made and are being continued.
For example, the standard hospital benefit became the standard health benefit, and more non-hospital services were added, including home medical care.
Fees for long term care at the hospital were reduced dramatically, protecting Government funding for long-stay nursing care patients with nowhere else to go.
And, the system began the intended experiments with different payment mechanisms and better management of chronic diseases.
Mr Speaker
I pause here to provide an update on the Enhanced Care Pilot, which has been running since February 2017. A total of 206 participants are enrolled in the programme to date, and 88 have completed a full year within the programme, which targeted persons with chronic non-communicable diseases like diabetes, asthma/COPD, obesity, cardiovascular disease, and hypertension.
The annual cost of the ECP has been $672,540 for a full year. This is an average cost of $3,265 per participant. And in that one year participants’ overall measurements for cholesterol, blood pressure and body weight were improved by the enhanced care interventions.
Most significantly, Mr Speaker, participants enrolled in the programme had substantial reductions in their use of the emergency department and in hospital admissions. Emergency visits dropped by 50%, from 178 to 88; and Hospital admissions dropped 44%, from 41 to 23.
This means that the health system saved over $68,000 in avoided emergency room visits; and close to $105,000 in avoided hospital admissions.
These results are similar to those of the hospital-based sister-programme, the Patient-Centred Medical Home, and we are very pleased to see these programmes prove successful.
What I am also proud of, Mr Speaker, is the bipartisan genesis of these programmes which proves how much good we can achieve when we share a vision for healthcare. The groundwork for these programmes preceded the previous Government; and they had the tenacity to implement them. In turn, we have been pleased to continue the programmes and look to expand them further given their proven success.
This is the way we must work on health reform, Mr Speaker. With a unified vision, shared goals and for the benefit of all of Bermuda.
Seeing the success of these programmes as early grass-shoots of what we can achieve in reforming our health financing, gives me great hope, Mr Speaker. Hope that we will be able to bring these full reforms to fruition. Hope that better, more affordable health coverage is within our reach. And hope that the precedent we’ve established of shared goals and vision will bring us more successes like this one.
Thank you, Mr Speaker.