Bermuda is on the verge of a "revolution" in health care, Health Minister Walter Roban said yesterday.

Mr. Roban did not provide details but said there could be changes in the standard hospital benefit system, a move towards generic drugs and new legislation to oversee the private sector.

And he admitted that changes in the way the hospitals charged for services had increased costs for insurers, although he said it had not increased the overall cost of health care.

Mr. Roban's comments came after private insurers last week told the Bermuda Industrial Union that health costs were rising faster than inflation and, as Argus Insurance Chief Executive Officer Gerald Simons put it, "the whole system is going to come crashing down".

Sen. Roban said yesterday: "Whilst there certainly is cause for concern regarding the rising cost of health care, concluding that our health system is close to failure and alarming the public is not helpful or constructive and suggests that nothing is happening today to ensure sustainability into the future. That is certainly not the case."

Mr. Roban added: "The introduction of diagnostic related group reimbursement at the Bermuda Hospitals Board in April 2009 has started a cost shift across the system.

"Although the insurers have had to pay a higher share of the burden this year, this did not represent an increase in costs within the system. Instead, it was a rebalancing of the costs to bring about equity amongst all payers."

He added that since Government announced it would be developing a national health strategy in last year's Throne Speech, Government entities have been examining all aspects of health care.

"The second phase, which will occur in the fall, will see external consultation to test our conclusions and this work will include the general public and health care providers." he said.

"The Government must develop and implement policies and regulation that ensures access to safe services at an affordable rate.

"The Ministry of Health, including its quango partners, has several regulatory proposals at various stages of completion.

"This work will determine more efficient ways to deliver services in Bermuda, and ensure that those who provide the services do so to the highest standard in a financially sustainable way."

In a press release Mr. Roban also said Government was looking at ways to modernise the Standard Hospital Benefit and reviewing the cost of pharmaceuticals in order to determine alternate sources and greater use of generics.

"The first step in any change programme is identification of the problem and getting buy-in amongst stakeholders," he said. "The events of the last week suggest that although we have our work cut out for us, we are all in agreement that the work must be done. I look forward to engaging with the entire community to move this agenda forward. In my mind, our health system is on the verge of a revolution."

Mr. Roban did not respond to a request for more information on the foreign consultants or the proposed legislation.