We are facing challenging times and the financial effects are being felt in every major economy worldwide. The cost of HealthCare is top of the agenda for many governments, including the USA where 30 Million citizens remain uninsured. All countries are facing major issues as the forces driving up the cost of care are supported by the demand for more care created by an aging population. There are serious implications for future generations.


So who is responsible for the increase in the cost of Health Care? Who is the big bad wolf?

Perhaps there is no one body responsible. Technology and our scientific capability to deliver healthcare is potentially outstripping our ability to pay for it. Technology is providing ever more expensive options that offer improvement in the quality of Life and the promise of longevity.

Drug companies seek to recover major investment in potentially life changing therapies and everyone is operating for a profit.

The Heath Insurance Industry is an easy target for politicians. The President of the USA has accused the Industry of excessive price increases and bad practice. In Bermuda the Minister has made similar remarks. It is therefore important to understand that, although the Insurance Industry sets the cost of insurance, it is not responsible for the increase in the cost of HealthCare payments from which the premiums are derived. That is driven by the cost of Medical Care services delivered by Hospitals, the Physicians, Clinics, Labs and the Pharmacies.  For every $1 of Premium collected the following deductions are planned:  5¢ is paid for Government Tax or Mutual Re Fund, 13¢ is for the Administration, 76¢ is payment of claims Medical Services, 3¢ goes to reinsurance costs.  In summary, the cost of health insurance premiums is primarily a reflection of the overall cost of health care services with the bulk of the premium going to pay for the cost of health benefits, such as hospitals doctors, etc.

Health Insurers provide a number of functions:  In short, the industry is responsible for providing administrative excellence. We incur and charge for the cost of the effective administration of eligibility, the collection of premiums and the disbursement of payments to the practitioners who provide care. We also aid and facilitate the transfer of patients to overseas facilities.  The second contribution we make is to make sure that overseas care can be accessed at the best possible price. Overseas contracts are a vital part of the major medical process since many of the most serious illnesses have to be treated in the USA. We coordinate access to hospitals and providers along with Emergency Air evacuation services when necessary. Insurers contract with providers who give discounts for the use of their services.  This role is often confused by all concerned who feel that insurers are controlling costs to make profits. But in fact we are contracting with quality providers that are willing to extend preferred rates. The Cost savings made are in fact passed on to the consumer.

In summary, I think that it is counter-productive to criticize any one party in the healthcare system and to hold them solely accountable for the increases in the cost of healthcare. Bermudians are used to getting the best of everything and until recently have been lucky to live in an affluent economy. However we now have to face certain realities that the rest of the world has been wrestling with for a number of years.   There are certain pragmatic decisions that have to be made: As consumers, if we want to have access to more services, have access to advanced treatments that enable us to live longer, more productive lives, we have to be prepared to pay for them. At the same time the providers of healthcare have to be held accountable for quality outcomes and be realistic in the level of care that can be provided in a community of 60,000 at a cost effective price. It is not always feasible or economically viable to provide certain types of secondary or tertiary care. We do not have the volume or frequency to sustain certain expensive services.  Government too has to be realistic about the reforms that they are seeking to implement in difficult economic times. Open public debate and further education is needed so that people can decide whether they want to pay more for their health care in return for the provision of more services locally.

There is no simple solution but a social partnership with all the key stakeholders who are committed to making informed decisions will allow us to move forward.