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BHB and the healthcare system: Cost control

I arrived at the Bermuda Hospitals Board immediately after the incumbent Chief of Staff was placed on administrative leave, with Island-wide curiosity surrounding that event. Additionally, the CEO of four months understood that financial commitments made during a robust economy would be difficult to honour during the economic downturn. The hospital was also being forced to function with less revenue. All of this was occurring against unsustainable costs of healthcare that were related to lack of control in the Bermuda system.

Bermuda has a US-style, fee-for-service health system, but without the US controls. The entire medical community takes advantage of the absence of controls by performing more services to generate more fees, and many patients believe that more tests equate to better care. As a result, healthcare costs are escalating and are capable of bankrupting the Island if not contained.

Most jurisdictions with fee-for-service systems either abandoned them for a government-run system or introduced controls that guide which tests and procedures are really needed. It is clear there is a problem with over-testing in Bermuda, and MRIs are a good example. MRIs are performed at the third highest per-capita rate in the world, second only to the USA and to Greece. This only reflects BHB statistics, as the statistics from the other MRI provider on the Island are not known. Yet our life expectancy has not improved. More tests do not necessarily save lives.

While the status quo is unsustainable, it is hard, and often unpopular, to introduce controls, even though it is actually better care. Unnecessary testing is not always risk free; not only is it costly, stressful, and inconvenient, but it can also overexpose patients to X-rays or contrasts. Unfortunately, physicians would be unlikely to voluntarily constrain their practices; it is counterintuitive. If commercial payers believed they would lose a competitive edge, they might not institute controls. Government should take the lead, as it is probably the biggest payer, and mandate other payers to follow. The lessons learned from entitlement programmes in the US, such as Medicare, demonstrate that when government takes the lead with reducing healthcare costs, the methods used are quickly adopted by commercial insurers.

BHB is responsible for 43 percent of all healthcare costs in Bermuda. As Bermuda healthcare costs have soared, BHB is expected to take a lead in cost cutting. BHB has instituted measures to reduce the use of services as one response to the problem. For example, BHB stopped providing elective MRIs on weekends and evenings. However, a non-BHB imaging centre has already extended its hours to offer the service that BHB has withdrawn, thus negating whatever savings BHB has generated. There has to be the political will to dictate that any utilisation restrictions adopted must be enforced Island-wide. Otherwise, no savings will be generated, and the hospital alone loses out.

Additionally, it is harder to change established processes. For example, Bermuda’s isolation results in patients being transferred overseas for interventions that are more sophisticated. Strict guidelines exist which govern the transfer, but it is not uncommon for personal influence to be brought to bear to accommodate a request for transfer that does not meet the requirements. The policies that govern the selection of patients to be transferred overseas should be reviewed, updated and enforced.

The increasing elderly population, and their need for long-term care, are also driving healthcare costs up. Although it was not a problem that I could solve, having people in acute-care hospital beds because they could not be safely discharged needs a community solution. When I first noted that the length of stay at BHB was 9.5 days, it was difficult to comprehend. When I recognised, however, that half the patients on acute-care wards — mostly seniors — were there because they had no place to be safely discharged, the explanation was clear.

The reasons centred on a shortage of nursing-home or continuing-care beds in the community, as well as a reluctance of community residents to assume, or resume, the home care of relatives ready to be discharged. This is not only costly, but it also causes ‘blockages’ in the system, whereby people in emergency have to wait longer for admissions as there are fewer beds available.

* Dr Victor Scott joined BHB in August 2012 and worked as Interim Chief of Staff until March 2013. Born in Bermuda, Dr Scott is the son of two trailblazing educators, Edna May and Victor Scott. He moved to the US to train and then work as a gastroenterologist. He is a graduate of the Howard University College of Medicine, from which he retired in 2008 at the rank of Professor of Medicine. Dr Scott is a Fellow of the American College of Physicians and American Gastroenterological Association. In 2010 he was elected to Mastership in the American College of Physicians and has served as President and Councilor of the Association of Academic Minority Physicians. Dr Scott has been named to Washingtonian magazine’s list of top area gastroenterologists three times.

* Tomorrow Dr Scott will look at Physician Costs and Quality of Care.

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Published May 15, 2013 at 9:00 am (Updated May 14, 2013 at 4:40 pm)

BHB and the healthcare system: Cost control

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