warned yesterday.

That's the prospect if costs in Bermuda keep rising at the present rate, said manager of Somers Isle Insurance Mr. Nick Warren.

"Costs will escalate and will hurt everyone's pocket,'' he said.

"Apart from the damage to our bank accounts, out-of-control costs will lead to elitism, which goes against the grain of the universal system available in Bermuda.'' Mr. Warren's warning is the latest from a local industry worried about booming health care costs in Bermuda and abroad, especially the US.

It comes after a near-doubling of the cost of overseas claims since 1989.

This helped cause this year's hike of around 20 percent in premiums.

Mr. Warren told a Rotary lunch in Hamilton that new medical technology was causing costs to rise.

Employees had little incentive to worry because insurance firms picked up most of the tab.

Meanwhile, most medical professionals continued to treat patients with maximum resources, without considering the most cost-effective care.

He outlined how his company -- the biggest health insurance firm in the Island -- is keeping a closer watch on overseas treatment.

One method was to appoint a nurse or doctor to manage a patient's treatment, while keeping medical decisions in the hands of the hospital physician.

This was designed to maintain or improve the quality of care while hunting out waste, like an unnecessary stay in hospital.

Another method was to audit the hospital bill, picking up errors or problems a computer could miss.

"The mere thought of a hospital bill audit is often sufficient to generate a reduction,'' he said.

There had been an increase in Bermuda residents getting overseas treatment, and such methods were vital.

It was necessary to preserve resources and therefore preserve access to care for those who really needed it.

Patients could also be sent to hospitals who specialised in the required care and were willing to negotiate discounts.

"While originally designed primarily to control costs, the focus now is equally on the appropriateness and quality of the care.

"This is leading to a fundamental change in the way decisions are made about a patient's medical care.

"Decisions that have traditionally been the exclusive domain of the doctor and patient may now be examined at the time or even in advance by an external reviewer.'' People needed to be educated on health costs and healthier living.

Wealth and lifestyle were the two main factors deciding how long people lived and how healthy they were.

"Japan spends approximately half as much as the US on health care, and life expectancy there is four years longer,'' Mr. Warren said.

Insurance firms might even introduce policies containing incentives to adopt a healthier lifestyle.

"In the end, the cost awareness of patients will probably have the most impact on premiums.

"However, I still don't believe there is even a clear understanding that there is a problem.'' Generally speaking Bermuda had a good, efficient health care system. "But it is not guaranteed and will require constant vigilance.'' He called on Government, insurance firms, employers, medical professionals and patients to continue working together on the issue.