Changes to the island’s health financing are predicted to save millions for the hospital while the Government’s mandated premiums remain unchanged, Kim Wilson, the Minister of Health, announced yesterday.

The revamp entails a switch from the hospital’s fee-for-service model, in which all services are separately paid for, to the hospital working within a less costly block grant of

$330 million.

Ms Wilson said that the ministry had arrived at the figure after discussions since January with Bermuda Hospitals Board.

In the event that the hospital broke the $330 million cap, the minister said: “Clearly, the Government is not going to allow the hospital to go under.

“If there was an event such as some kind of epidemic with increased costs to the hospital, the Government would have to step in.”

She said the island was currently saddled with the developed world’s third most expensive health system, with below-average results.

This included a national cost of $78 million a year to deal with diabetes and kidney disease alone, which she called “staggering”.

Ms Wilson said there would be no increases this year to the public’s standard health insurance premium.

Nor would premiums rise for the Health Insurance Plan, or HIP, as well as FutureCare.

However, from June 1, the Government will triple the mutual reinsurance fund’s contribution to the standard premium rate.

The SPR is the premium for the mandated and basic health package that is part of every insurance policy on the island, and the MRF is embedded within it.

Ms Wilson said: “What this means is that whereas currently $101.97 of your standard premium is transferred to the MRF each month, leaving the balance for insurers to pay hospital claims and the other standard benefits, from June 1, $331.97 of the standard premium will be transferred to the MRF, and BHB will receive the bulk of this funding to operate the hospital.”

The minister said the changes to BHB’s funding would make “no difference to the ordinary public”.

“Actuarially, it makes no difference to private insurance premiums either,” she said.

“People will pay their insurance premiums just as always. Children, seniors and the indigent will be subsidised as before, and access to hospital services will remain as it is now.”

Further consultation is in store, Ms Wilson added, calling it “paramount” that the island develop a better way of paying for healthcare.•To read the minister’s statement in full, click on the PDF below “Related Media”.