Hospital fees will increase 2.5 percent this year to cover salaries and the rising cost of health care. MPs approved the hike under the Bermuda Hospitals Board (Hospital Fees) Regulations Act 2010.

Health Minister Walter Roban told the House of Assembly on Monday night: "The Legislature appropriates funds for the operation of our hospitals. This is done in two ways. Firstly, the Government provides a grant to support hospital services provided to youth, the aged, geriatric and indigent patients.

"Secondly, the Government sets the rate at which hospital services are charged to the general public for any hospital visit.

"This proposal seeks approval for a 2.5 percent (less than $5 million) increase in hospital fees with effect from April 1, 2010

"The proposed increase consists of a 1.5 percent inflationary increase plus one percent for the new hospital. It should be noted that the [BHB] did not request funding for any new initiatives."

Minister Roban said the cost of providing health care has risen in the last few years and it was expected to rise again this year. But he said the BHB was committed to keeping costs down and would pay for any additional costs above the grant received from Government.

The BHB had estimated the cost of medical supplies would increase by $3.5 million this year. Half of the BHB's operational expenses go to pay salaries and employee benefits, which cost $3.7 million.

"The impact of these initiatives adds over $7.2 million to the cost of operations for 2010/11," he said. "Therefore, it is proposed to increase BHB fees by 2.5 percent as a contribution to these increased costs."

But Shadow Health Minister Louise Jackson said Bermuda had some of the highest health care costs in the world and there was a growing gap between the rich and the poor. "Poor people are spending almost eight percent of their income on health care, as opposed to three percent for wealthy people," she said. "I think that's a pretty dramatic increase. This is a Government that is a labour government and it would appear to me that they really ought to try to point in the direction of helping Bermudians."

Commenting on the amounts people pay for health care, she said: "Are we really getting the bang for our buck, and if so why have we got so many people voting with their feet and going abroad for treatment?."

She pointed out that with the fee increases, it would now cost $137 for an office visit to a cardiologist, or $917 for a "more serious" level three visit. She added palliative care of the elderly was now set at $143 a day.

Premier Ewart Brown said that although Bermuda's health care system was "not perfect" it was on its way to becoming the envy of the world. "We have a health care system that is in evolution," he said. "It has come a long way since I can recall entering it as a professional provider in 1991.

"As the system evolves it is becoming better and fairer to more people. That's the objective.

"It is not perfect. We're talking tonight about FutureCare, warts and everything, but at least we are talking about a concept that prior to now had not been introduced, so we are getting there."

Dr. Brown said: "Prior to this hospital renewing its rates the insurance company would pay the hospital a daily rate, a fixed daily rate. You don't pay for something as complex and variable as health care with a fixed daily rate. We're working on this system now where services are paid for as rendered."

The Premier said: "I happen to believe that within three years, Bermuda will boast the best and most effective health care model in the world.

"We'll be able to say, 'Look at our health care system if you want to fix yours'. We are working on a Bermuda model which has a little bit of this and a little bit of that. I am proud of the health care professionals which are leading this effort, even though the Opposition take the time to single out the cost of the contract of the company which provided us with the chief of staff, Donald Thomas (Greeley Company), just as they did with the contract with Ambling (International Consulting). We will talk about that later, because that runs deep. But of all the millions of dollars of contracts, they chose to choose those two."

He added: "I am proud of the professionals leading this effort in healthcare and I admire the steps being taken in Bermuda to help us arrive eventually at a system which will be envied around the world."

Mr. Roban said: "We acknowledge the issue of cost of health care is serious. Setting these rates, there is ongoing consultation which goes on. Complication is a regular ongoing issue as it relates to these rates."