Savings can be made without affecting health services
Dennis Fagundo makes a number of interesting points and observations in The Royal Gazette of October 17. I think it may be helpful to the community to place these in context.
The Bermuda Hospitals Board was informed in November last year that pressure on governmental spending in Bermuda would require a change in how the BHB was paid: the portion of funding previously paid by insurers for BHB claims that came under Standard Health Benefit was going to be replaced with a fixed payment from the Government's mutual reinsurance fund.
The total funding from the Government was capped at $322 million — the $330 million often referred to includes the BHB's estimate of funding from other sources such as overseas patients. This amount was lower than the BHB's expenses in fiscal year 2018-19, so savings would have to be made for the BHB to achieve its statutory break-even duty in 2019-20.
Our estimated savings requirement this year is $14.1 million or 4 per cent. International evidence suggests that the maximum level of ongoing savings, which can be delivered by a healthcare organisation without affecting clinical services, is between 2 per cent and 2.5 per cent. The BHB determined that a portion of these savings could, therefore, be delivered from one-off means to meet the one-year shortfall. The balance of 2.5 per cent is being delivered through productivity and efficiency improvements.
This includes optimising how our operating rooms are rostered, obtaining best value for the prices we pay for medical devices and equipment, and ensuring overtime is rigorously managed and used only where operational pressures require it.
These cost savings can be sustainably delivered only when developed and implemented with the full participation of clinicians. This means being fully aware of the clinical impact, adverse consequences and hidden costs of each initiative, and adopting robust sign-off processes to ensure such impacts are minimised.
Mr Fagundo highlights the challenges inherent in making savings within a constrained cost base where fixed payments for the Acute Care Wing and union collective bargaining agreements clearly have an impact. However, it is possible to improve space utilisation in buildings, and optimise the use of overtime as highlighted earlier while remaining compliant with the CBA, and without affecting the number of full-time employees. Equally, utilities can be a variable cost and be reduced through energy efficiency, recovery and management.
Finally, the BHB reviews wait times for its services on a continuous basis to ensure that emergency and urgent care are prioritised, and routine care is delivered within internationally acceptable clinical standards. The needs of our patients remain our priority.
Quality and Patient Safety Data is shared quarterly on our website for anyone who wants to follow how well we are performing. In September, our average wait times for non-urgent diagnostic imaging tests ranged from one day (radiology, mammography), to two days (nuclear medicine, bone density), to four days (ultrasound), to 13 days (CT) to 18 days (MRI).
To summarise, Bermuda, like much of the developed world, faces the conundrum of delivering high-quality health outcomes while checking the inexorable rise in per-capita costs.
The BHB put reducing these costs at the heart of its 2016-2021 Strategic Plan. While the level of savings we have had to achieve this year — 4 per cent or $14.1 million — cannot be delivered year on year without impacting services, the existing position is a temporary step and we will continue to work with the Government as it develops a permanent funding solution based on payment related to value, drawing on international experience of successfully implemented solutions.
Working towards a quality and cost-effective healthcare service for all of Bermuda is something that needs to involve all stakeholders and the community. We welcome the interest and discussions, are happy to share the BHB's data, and look forward to continuing to play our part in helping to deliver high-quality, better-value care for all of Bermuda.
Chief Financial Officer
Bermuda Hospitals Board