HEALTH insurance costs are likely to rise significantly as a result of the arrival of a second MRI scanner on the island, according to Shadow Health Minister Michael Dunkley.

And Health Insurance Association of Bermuda (HIAB) president Gerald Simons has warned that health insurance premiums will rise by a percentage "well into double digits" this year.

In its first year of operation at King Edward VII Memorial Hospital (KEMH), the island's first Magnetic Resonance Imaging (MRI) machine has performed 1,700 scans.

Now Transport Minister and physician Dr. Ewart Brown is to import a $1-million MRI machine, arriving next month, for use at his private practice, Bermuda Health Care Services.

While accepting the medical need for the machine, Mr. Dunkley questioned why the number of MRI scans at the hospital had been so much higher than expected ? more than double the figure of 750 to 800 that doctors and insurers had been led to believe.

And he suggested the arrival of a second machine would put more upward pressure on already spiralling health care costs.

Only last Friday, it was announced that hospital fees were set to rise by five per cent ? for the second successive year. And today, five items related to hospital fees are due to be debated in the House of Assembly.

"At the end of the day, someone must pay," Mr. Dunkley said. "Hospital fees have gone up by five per cent, but you can guarantee that people will be hit by much higher rises in health insurance fees and that is where the rubber meets the road.

"The cost of HIP (the Government health insurance plan) is going up this year by 11 percent and people insured with private companies can expect their premiums to go up in that range.

"That is four times the rate of inflation and this has been the case for the last couple of years. That is a scary situation.

"There is a need for people to have MRI images done and before we had one on the island people had to go overseas to get it done.

"But since we've had the scanner at the hospital, usage has doubled and it's not clear to anyone why.

"You have to ask whether every one of these 1,700 scans was an absolute necessity or a means of getting revenue for the hospital."

The MRI machine is a diagnostic tool which gives doctors images of the inside of the body, often avoiding the need for exploratory surgery. Each scan costs more than $1,200 at KEMH.

Mr. Simons backed up Mr. Dunkley's argument that the extra scanner would be a factor in higher health insurance premiums.

"Generally speaking, the more diagnostic equipment or medical professionals there are, the more people spend on those services," Mr. Simons said.

"The costs of premiums depend on usage of health services and usage continues to increase at three to four times the rate of inflation.

"Increases will vary from company to company, but you can be sure that they will generally be well into double digits this year."

Before the arrival of the hospital's MRI scanner, Mr. Simons said insurers had questioned whether the machine was necessary.

And the HIAB favoured this and other long-term health care factors being determined by a health council, comprising members of the medical profession, insurers, the public and Government.

"One thing the health care community has debated for years is whether it is better for expensive diagnostic equipment to be at the hospital or in the private sector," Mr. Simons added.

"This equipment has a high fixed cost which has to be covered. Where there is competing equipment, it is likely that the hospital will not be able to cover its costs so easily."

Bermuda Hospitals Board (BHB) chairman Jonathan Brewin told the this week about Dr. Brown's plans to bring in an MRI machine: "If we see a dilution of revenues as it relates to the more profitable areas of health care being hived off by entrepreneurs, it makes the budget setting rather more complex."

Mr. Brewin has also reported a huge improvement in hospital finances in this financial year ? a $3-million surplus compared to last year's $3.5-million loss.

Mr. Dunkley said: "While the hospital has to function like a business, we have to remember that a huge portion of the cost of each MRI scan is paid for by the insurers.

"That is why we in the UBP are concerned about the second MRI machine coming here. It will lead to an ever-higher burden on our health insurance and that is a scary thing to think about."

The improvement in hospital finances was welcomed by Mr. Dunkley, who gave credit to Mr. Brewin and hospitals CEO Joan Dillas Wright for their achievements so far.

But he stressed that more urgency was needed in moving forward plans to either renovate the ageing KEMH or build a replacement.

"There is no doubt the management of the hospitals was in a mess a few years ago, after some bad appointments by the PLP Government," Mr. Dunkley said.

"This is a very large business that receives a tremendous amount from the Government ? $80 million ? so it is comforting that we now have a management that looks more closely at the finances."

But he said more information was needed on how that improvement had been achieved ? whether staffing levels had been cut or positions had remained vacant for some time, for example.

"There are still major issues we need to focus on. We had a report done by Kurron that cost half a million dollars and it's never been tabled in the House of Assembly.

"And Mr. Brewin has said the hospital building has a life of another ten to 15 years. We in the UBP support the master plan to build or renovate 100 per cent, but we feel things should be moving faster.

"We don't want to be faced with a situation where the hospital is literally falling down around us.

"This would be a much bigger project than Berkeley. The tenders need to go out, then it will need to go through the BHB and through Cabinet. Breaking ground is still at least a couple of years away.

"The time we have wasted has gone. We can't afford to waste any more, or throw any more good money after bad."