Argus Insurance is trying to encourage the use of Canadian hospitals for neo-natal care and high-risk pregnancies in a bid to keep costs down, it reported in its latest annual report.

?Recently we have made a decision to encourage certain patients to use high quality Canadian hospitals which charge considerably less for their services than hospitals in the US,? the report stated.

?Specifically, this change pertains to neonatal, congenital abnormalities and very expensive high-risk pregnancy cases. We have had several cases over the last two years and their average cost was in excess of $550,000. The alternative to using Canadian facilities would be to implement a maximum benefit on claims paid during the first year of life, which we would only consider as a last resort.?

The report noted that health insurance claims continued to rise at more than three times the inflation rate ?and this has resulted in a third year of double digit premium increases.

Advances in both medical and pharmaceutical sciences and significant increases in the utilisation of medical resources have caused this escalation.?

Over the last two years, the report continued, Argus payments for local hospital services had risen 27 percent ? ?ten percent due to price increases while 17 percent was due to additional utilisation by insureds.?

Contacted at his home last night, Argus CEO Gerald Simons said that the Canadian hospitals can shave off up to 50 percent of the bill when compared to the American facilities.

?The average costs of large claims is $550,000 so we can easily save one or two hundred thousand dollars,? he said.

He added that the cases had become more frequent and there had been roughly half a dozen over the last two years.

?We?ve had enough cases of congenital procedures and very premature babies with difficult pregnancies and we?re no longer surprised when these cases arise.

?So it was important to try to reduce the cost without compromising the quality. These hospitals are as good as the best of the American hospitals in the area of neonatal care,? Mr. Simons said.

He said local paediatricians and obstetricians had already been consulted and a month ago the insurer arranged for Canadian hospital representatives to come to Bermuda and meet their Bermudian counterparts.

?We recognised we were suggesting a major change so we thought it was important that they meet their counterparts in Canada.?

Locals have typically gone to Children?s Hospital Boston for such procedures.

Mr. Simons could not immediately say by how much the number of procedures had risen over the years, only that the increase was ?enough to have an impact on premiums.?

?In the past, not so long ago, babies born very prematurely very often died so we now have the science, the techniques, nursing care and the technology to save the overwhelming majority.?