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Bermuda on course for $1b health bill by 2015

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Bermudians could spend up to $1 billion on health in 2015 — and still get less value than similar countries. Our spending is “very high”, the Bermuda Health Council CEO Jennifer Attride-Stirling warned, even when compared to jurisdictions with unhealthy populations. In an overview of the Island’s spending, Dr Attride-Stirling showed

The Royal Gazette that our national health spending trends most closely mimic those of the US. Examining total health expenditure for the fiscal year ending 2011, Dr Attride-Stirling pointed out: “Our health system cost $679 million in that year. “When we look at public versus private sector spending, it’s a 50-50 split — most countries in the Organisation for Economic Cooperation and Development (OECD) show more on the public sector side. In Bermuda, we’re more similar to the US in our expenditure. “Financing versus expenditure is a very important distinction. The majority of the public sector spending is the Bermuda Hospitals Board, and then the Department of Health, followed by Ministry of Health ‘administration’ which it basically grants to associated entities and the charitable sector.” The Island’s health system financing is heavily reliant on the private sector, and to a much greater degree than other high-income countries, she said. For financing, “about 30 percent comes from Government and nearly 70 percent comes from the private sector — basically from employers and individuals”, Dr Attride-Stirling noted. “Less than one percent of health system financing comes directly from non-profits. When it comes to financing, we do things very differently compared to the OECD and rely less on Government. Financing in the US is about 40 percent public, 60 percent private, and in the OECD it’s 70 percent public, 30 percent private.” The reason for the difference lies in the complex and individual make-up of Bermuda’s health coverage. “Why we differ is a complicated thing to answer,” she said. “It’s not our proximity to the US. It’s just the particular way that Bermuda’s health system is structured.” The BHeC’s ranking of per capita spending by population shows Bermuda falling just short of the top spender. “In terms of healthcare spending across OECD countries, Bermuda is second to the US, when we convert the spending figures into equalised dollars — what are technically known as purchasing power parity dollars.” Dr Attride-Stirling added: “It’s an imperfect method, but it’s better than nothing when it comes to comparisons. “In terms of health spending per capita, when you take our $679 million of expenditure and divide that up by 65,000 people, you can see that Bermuda’s spending is very high, compared to most other countries.” Turning to projected spending, she said: “If it keeps going up at this rate, it’s going to reach $1 billion a year by 2015 — which is not far away. Our population is shrinking, as well, so the less people you have to divide that number by, the bigger the impact. We will feel that.” Asked at what point expenditure would become unsustainable for Bermuda, Dr Attride-Stirling said: “That would be now. It’s not that spending has to reach $1 billion to be unsustainable; it’s pretty challenging now.” In a final measure of Bermuda’s healthcare performance, a graph of health systems and life expectancy shows the Island lagging considerably. Recent figures show Bermuda spending roughly the same per capita as Norway — but residents’ lifespans fall nearly two years behind. Dr Attride-Stirling said: “This is a very good measure for the health system’s value for money: it’s showing life expectancy at birth on the vertical axis, by health spending per capita on the horizontal axis. If you look at the graph, in short, the lower right corner means you’re spending more and people are not living as long. “Bermuda on this graph is too far from the average, and on the wrong side. The poor man’s consolation is that the US is even farther over. We can see that Luxembourg is the closest OECD country to us.” “The conclusion we can draw from this is that we’re spending a lot and not producing the life expectancy that we potentially could. The conclusion many people draw, in particular some in the medical profession, is that we have an unhealthy population and that’s why our costs are high. “But in terms of chronic health conditions, we are not that different from the US and Britain, which have very different health costs. We do have more diabetes, but we don’t have more cancer and heart disease than these countries, we are all pretty unhealthy when it comes to chronic diseases, but each one delivers care and prevention very differently.” Reining in spending was the main reason of the Island’s previous administration for launching a National Health Plan. Currently the Plan is said to be “on hold” as Government reviews it.

Jennifer Attride-Stirling
Graph detailing the Island's projected health expenditure