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New medical facility would not have reduced medical costs

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Appeal: Hamilton Medical Centre medical director Dr Jay Jay Soares (File photograph by Akil Simmons)

The Bermuda Health Council has called on the Court of Appeal to overturn a decision to allow a clinic to offer services under the Standard Health Benefit.

Ben Adamson, counsel for the BHeC, said the body reasonably refused the Hamilton Medical Centre, a clinic operated by Jay Jay Soares, SHB status to prevent greater costs to patients and taxpayers.

Mr Adamson said on Friday: “In a perfect market, the amount of demand will be fixed by the health of the population and demand does not react to additional supply unless it’s medically indicated.

“All the literature says that the healthcare market is not a perfect market and you increase supply, you increase demand, and Bermuda has some of the highest diagnostic levels in the world.

“The ideal world is not the real world.”

He added that an increase in the amount of diagnostic tests on the island would cause increased costs on the healthcare system and, in turn, on taxpayers.

In 2019 the Hamilton Medical Centre applied for permission to offer services under the SHB – which would allow FutureCare or HIP coverage for the services.

But the BHeC refused the application after it voiced concerns that the facility would “self-refer” patients and provide unnecessary treatments.

Dr Soares launched an appeal to the decision, and in September 2020 a BHeC appeal panel upheld the refusal.

Dr Soares then appealed the decision to the Supreme Court on the basis the BHeC had acted unfairly and acted unreasonably.

On April 8, Puisne Judge Larry Mussenden quashed the decision of the BHeC and ordered the approval of Dr Soares’s application, but the body filed an appeal against that decision.

In the Court of Appeal yesterday (FRI), Mr Adamson said that for the judicial review it was important to consider the facts in front of the decision-maker at the time of the decision.

He said: “That means we look at things as they stood in September 2020. You cannot look at things through a rear view mirror.”

Mr Adamson said that at the time there was a plan to reform the system, so the BHeC decided to “carry over” incumbent providers in late 2019 to avoid going through an “exhaustive” analysis process.

A moratorium on new applications was announced on March 6, 2019, but Dr Soares’s application was heard because it was received on the same day as the announcement.

Mr Adamson said it was believed at the time that the reform would be completed by April, 2020.

He said Dr Soares needed to demonstrate to the BHC that there was a need in the market for another provider and that the result would be a decrease in costs.

Mr Adamson said Dr Soares’s application argued that there was a need for greater competition in medical diagnostics and promised more modern equipment.

He said: “The argument is that he has better equipment that may help certain people, but there’s no analysis on how many people will be helped or whether people are going untreated due to the lack of this particular equipment.”

Mr Adamson said that a review carried out by experts raised concerns that the new facility would result in an increased number of diagnostic scans and there was a risk of “unfettered” self-referrals.

He added that it was determined that the utilisation of the testing equipment already on island was “low” and waiting periods were “nominal”, so there was no need for the additional equipment.

Mr Adamson said: “That is based on a scientific analysis, not an assertion.

“These are industry experts, they are referring to industry data and this is their conclusion.”

He said Dr Soares had failed to show there was a need for another provider or that the facility would reduce costs if included in the SHB system, and the BHeC committee voted against the application on that basis.

Mr Anderson said: “All applications for the provision of additional services must show a market gap and need for the provision of additional services.

“Mid-year applications must additionally show a budget neutrality, or technically, a reduction in costs.

“The SHB committee found that this application had not demonstrated either requirement.”

He said Dr Soares argued on appeal that the application should have been treated as a full-year application, bypassing the requirement for budget neutrality, but the BHeC appeal panel rejected that suggestion in 2020.

Mr Adamson said that while Mr Justice Mussenden found the application should have been treated as a full-year application in 2019, there was no suggestion it was supposed to be a full-year application until the following year.

He said: “I don’t accept that we acted improperly or unfairly in what we did in 2019 and in September 2020 the appeal panel could not re-engineer it or turn back the clock.”

Mr Adamson added that even if the panel had treated the application like a full-year application in 2019, there was no guarantee it would have been approved as construction of the facility was only completed this year.

The hearing will continue on Monday.

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