In the interest of transparency and fairness we must state up-front that we do support some form of National Health Insurance. Additionally, we must state that ColinaImperial Insurance Limited, a provider of health insurance is an associate company of CFAL.

Recently we came across the government proposed National Health Insurance Act. Upon reviewing the Act, we find it to be "a pig in a poke" as the saying goes. In the 21 pages of the Act there was virtually nothing to review. All of the key elements of which citizens might want to be informed before making a decision on a bill which could potentially reshape healthcare and its delivery, the tax system and the economy itself were not included in the Act. Not included in the Act are:

What's the health plan and what is included? Is it a fully-insured plan, a catastrophic plan or a plan aimed at those currently uninsured?

What's the nature of the NHI scheme and how will it be implemented?

What's the relationship between the scheme and healthcare providers? How will they be contracted? How will they be paid? Will they still be allowed to have private practices? Will they be required to participate in NHI? Will they be paid on a fixed fee schedule? Will they be paid on a per capita basis?

Is the financing of the scheme realistic? What bureaucracy will be required in order to collect and manage these fees?

How will the NHI budget be established? What will prevent the contributions from rising ever skyward, WHEN the NHI runs a deficit? Are the caps on beneficiary contributions realistic?

What will happen to private health insurance? Will it still be allowed to exist? What will happen to the private insurance companies, their hundreds of employees, and the hundreds of employees in businesses related to the delivery of insurance and healthcare?

What infrastructure will be put in place to meet the demands of the public?

This is just a quick review of the unanswered questions. With more time for analysis, the actual number of unanswered questions would be much greater. Every one of these questions can have a tremendous impact on the cost and viability of the scheme.

What is truly frightening in the Act though, is the one thing it does accomplish: it establishes an unaccountable Commission made up of government "wise men" and other elites with the authority to completely restructure the financing and delivery of healthcare in The Bahamas, as well as the authority to collect taxes from employees, employers and self-employed persons. Apparently the only accountability that this commission will have as envisioned by the Act is a review to be performed every three years by a government-appointed actuary. The Act as written is essentially a blank check to take over a significant portion of the economy, and to introduce the endless trough of government spending created by personal and corporate taxation.

It is not surprising that the government would not want a lot of details about the scheme to be known. There is enormous information available as to the results and efficacy of "Single-Payer Health Care Systems" as is being proposed here. Drawing from years of history of Single-Payer systems in Canada, the UK and other parts of Europe, certain outcomes will definitely occur within a single-payer system:

Health Care Rationing – by definition, single-payer systems require the rationing of health care. There will no longer be private insurance companies to absorb healthcare cost and usage overruns. The NHI Fund will have a fixed amount of money which can only be increased by raising new taxes. Typically single-payer systems ration care through long wait times of up to many months to receive services or by disallowing certain services and procedures, which are considered too new or experimental or without sufficient history of good outcomes or are otherwise determined to be inefficient users of health care resources. Typically, the very old and very sick are discriminated against and refused services, because to treat them would be an inefficient use of healthcare resources, resources that could be better used on the younger and healthier with a better chance of recovery.

Spiraling Health Care Costs – Typically in a single-payer system, healthcare costs are almost always underestimated. Normally initial cost projections are made using a static model that assumes all participants will continue to have the same behavior as they did before NHI. The health needs of the uninsured, indigent and elderly brought into the system are normally underestimated. The healthy, currently privately insured, attempt to expand their usage of healthcare once it is considered "free" under NHI. This doesn't even begin to address the changing behavior of providers. A government faced with cost overruns has a choice of continually expanding taxation to support the scheme, or of inserting itself ever more deeply into other peripheral sectors of healthcare delivery, such as drugs, in order to control costs. From our initial analysis we project an adequately funded scheme to cost between $500 million and $750 million or 10.2 percent and 15 percent of one's salary, using comparative numbers from countries that presently provide this service.

Inefficient and Inequitable use of Healthcare Resources – The key element of a single-payer system is Central Planning to establish a budget and priorities as to how much money, and on what types of care, will be available. No longer are price and market forces determinants as to the availability of services and procedures but the opinions of the "wise men and women" of the commission. Because market forces no longer determine priorities, the systems become massively open to political influences. Additionally, the systems must be administered by newly established government bureaucracies. The efficiencies of private entities versus government entities are well established.

Development of a Two-Tier Health System - Single-Payer systems almost always result in the development of a two-tiered system of health care delivery – those with the means to opt out and those who are stuck within the NHI. Pre-NHI, most privately insureds have access to top-class health care both within their home country and without. When the NHI brings in the uninsured, the indigent and the elderly into the system, either the nation's entire healthcare expenditures expand massively or the healthcare coverage of the current insureds must be reduced to cover the cost of the new entrants. The rich will continue to be able to afford to pay for either private coverage in addition to the NHI, or to travel abroad for their healthcare. However, the vast, previously privately insured, middle class will no longer have the means to purchase private insurance or travel abroad and pay their taxes. The rich still get their good care while the middle class are stuck in an inefficient government scheme.

Additionally, medical advancement typically stagnates under NHI. Those providers dealing with the private healthcare sector have the profits and incentives in place to continually update their healthcare technology, while those providers associated with the overly cost conscious NHI schemes typically have neither the funds nor the incentives to stay on the cutting edge of healthcare.

The objectives of the NHI Scheme as defined in the Act are "promoting a healthcare policy to protect, foster and restore the physical well-being of insured persons, persons in receipt of assistance and the dependents of both such persons and to facilitate their reasonable access to a defined package of healthcare services," whatever that means.

The normal objectives of NHI schemes as given by proponents are: Access to healthcare for all citizens; efficient use of healthcare resources and sustainability of healthcare advances. Single-payer systems typically fail in all three of these objectives:

Access – while the uninsured may gain access to healthcare, through rationing and central planning, access and availability for those currently privately insured is reduced.

Efficiency – With resources allocated by an unaccountable monopolistic government agency and administered by a newly created government bureaucracy, the supposed gains from having a single purchasing source always disappear in corruption, incompetence and lack of incentives.

Continuing Advanced Medical Services – Healthcare atrophies within NHI schemes, as there are no profits with which to invest in current technologies nor are there any other incentives to do so. Nor with central planning are there any market indicators pointing the way to where investment should best be made.

It seems to us that the government is attempting to address one problem with their scheme – the matter of the uninsured and the elderly. While it certainly is not a small problem, the question is, is it worth the risk to the Bahamian economy as a whole to completely restructure healthcare delivery and financing? Is it worth reducing the quality and level of care to the vast middle class (the rich will take care of themselves) in order to address this one problem? Is there another way to accomplish the noble objective? We believe there is another and better way.

By establishing an unaccountable command structure for a significant sector of the economy and introducing personal and corporate taxation into an economy whose most attractive feature has always been its lack of personal and corporate taxation, one wonders if the government may have some other unstated objective in mind.

With so many good free-market options available to address the problem of the uninsured, the massive unproven solution being proposed seems to be inappropriately ambitious with no appearance of service and cost being considered, or at a minimum "brush" over by the authors. And unfortunately, the mere vagueness of the Act would grant the government a blank check which could affect not only the personal health of the Bahamian economy, but also the financial health and stability of the economy for generations to come.