Financing health care and prevention

On September 1, Chief Executive Officer of the Queen Elizabeth Hospital (QEH) Dr Dexter James, at the fourth annual QEH Healthcare Financing Symposium, yet again delivered a grim diagnosis of the hospital’s ill health, as well as the general state of health care in Barbados.

He pointed out that the hospital was racking up an annual deficit of about $35 million with no immediate end in sight and that taxpayers’ dollars only account for $155 million of the $190 million operating costs. What he did not say (or was not reported) is that the average hospital expenditure over the last decade has remained static and not increased either with inflation, routine maintenance needs or increasing demands.

He concluded that the island had a virtual cancer on its hands, and asked how the financial gap is going to be sustained and resolved. While every system is bedevilled with inefficiencies, including sometimes major over-investigation with costly tests such as MRIs or X-rays, sometimes done through a fear of litigation, the fact is that the huge majority of the health budget is spent on salaries, so estimated efficiency gains are only a minor part of the solution.

In a report on September 7, the Minister of Health announced that “a White Paper (on financing health care) will be produced for dissemination within the public”. In fact, there is a widely available discussion paper on health financing reform on the web, last updated on January 15 this year. In it the political imperative of universal health coverage was clearly stated as were the three most obvious contenders for solving the financial gap.

These were further expounded by Dr. Reginald King, emergency medicine consultant, suggesting perhaps a combination of all three –  the public purse (from taxes), insurance and user fees. A fourth source of funds is meaningful taxation of alcohol, cigarettes, sweet drinks and other potential food candidates, but this could not be an adequate solution on its own.

What has received little attention in the discussion so far is the value of effective prevention. An expanded health promotion unit with research and training capacity could have a major impact on the morbidity of the chronic non-communicable diseases (NCDs).

The health promotion unit at the Ministry of Health, responsible for implementing much-needed public health programmes to tackle our dangerous NCD epidemic, is grossly under-staffed and under-funded. The old adage that prevention is better than cure rings true – we could realize huge savings by investing more at the public health and primary care level.

The Chronic Disease Research Centre is also addressing these issues. Meanwhile, the emphasis must be on bridging the gap.

It is widely acknowledged that health coverage must be equitable, and user fees at the point of delivery victimize the poor and indigent, the unemployed and the disabled. Insurance schemes are affordable only by those with a significant and reliable income, and invariably require co-payments. Furthermore, their management is extremely costly – perhaps prohibitively so.

The third option is the public purse, but there is wide agreement that we are highly taxed, and the National Social Responsibility Levy (NSRL) has rubbed salt into the wounds, so any kind of tax needs to be carefully targeted with transparent benefits.

A dedicated health levy of 1 % of income was introduced in 1980 to fund the Barbados Drug Service. There was no protest, no out-cry, because Barbadians realized what they were getting, realized that it was greatly needed, and greatly appreciated it. This drug levy raised far more than the cost of the Drug Service but it went into the Consolidated Fund and was not dedicated to the Drug Service. It was abolished when the government changed, adding a large burden to the health budget.

We are proud of having a fairly comprehensive health service, which is reputedly the envy of many of our neighbours. (And if improved it will also be a source of income from catering to our neighbours, with profit.) Our per capita health expenditure is third in the region, after only the Bahamas and the British Virgin Islands. If we wish quality care, the funds must be found in an equitable way, to provide an equitable service.

As I suggested in a meeting with the Minister two years ago, a similar health levy today to the drug levy of old is a no-brainer. One estimate is that a health levy of 1.5% of taxable income would raise far more than the annual financial deficit of the hospital quoted by Dr. James. It would be an equitable and democratic way of sourcing funds because obviously the wealthy would contribute more, in proportion to their income, and subsidize the destitute and the disabled.

It would be the cornerstone for balancing our health budget, supported and supplemented by significant taxes on the “indulgences bad for your health”, improved efficiency in healthcare delivery wherever possible, and in the long term better health resulting from a more aggressive assault on the debilitating nutrition and behaviour linked chronic diseases that are making ever increasing demands on our health care delivery.

But this new version of health levy must NOT go into the Consolidated Fund – it must be managed like National Insurance … perhaps by a special unit in the Ministry of Health. It is by far the most practical, economically manageable, acceptable and realistic solution.

Source: (Professor Emeritus Sir Henry Fraser is a physician, independent senator and retired dean of the Faculty of Medical Sciences at the University of the West Indies, Cave Hill Campus.)

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