The combined losses of the Health Services Authority and the Cayman Islands National Insurance Company (CINICO) will total $17.8 million in the current budget year.
The amount government required to bailout the HSA this year was actually reduced from an expected $11.3 million to $9.8 million. However, CINICO’s operating loss shot from a projected $1 million to $8 million.
CINICO was also recently granted a $9.2 million letter of credit to keep it afloat and allow it to maintain a ‘Class A’ insurance licence.
It appears some of the recent operating losses within the health care system were shifted from the HSA budget to cover CINICO.
In discussions before the Legislative Assembly’s Finance Committee Friday, Health Minister Anthony Eden revealed that at least $500,000 cut from HSA operating losses was used to settle CINICO’s shortfall.
HSA Acting CEO Lizzette Yearwood said the two agencies cover different patients, with the HSA handling local health costs and CINICO having responsibility for patients who need care overseas.
But money to cover both agencies’ losses will come from public coffers.
‘It…boils down to 100 per cent coverage for the beneficiaries of CINICO is simply unsustainable,’ Mr. Eden said.
The HSA has recently raised fees it charges for certain services, and expects to implement new charges soon. The system currently covers all civil servants, their spouses and children, and pensioners at no cost to those who are covered.
Ms Yearwood told finance committee members that the HSA had reduced its operating losses mainly by not filling some vacant positions and managing energy costs more carefully.
Some of those vacant positions, such as doctors’ and nurses’ jobs , are critical to the HSA mission and will have to be refilled, Ms Yearwood said.
However, she said other jobs such as hospital porters were not considered critical and may not be filled again.
CINICO CEO Gordon Rowell said his company, which was created in 2002, has struggled with many of the same problems the rest of the world’s health care industry if facing: higher operating costs, and a population which is generally aging.
‘We have to address changing demographics and I’m not just talking about the Cayman Islands,’ Mr. Rowell said.
Bodden Town MLA Osbourne Bodden questioned whether CINICO was being managed as efficiently as possible, and urged government to look at other methods of covering patients who have to seek care outside Cayman.
Mr. Rowell said administrative costs for CINICO were hovering around 10 per cent.
‘We are relatively efficient, but I’m not going to deny there are other options,’ he said, adding that a review of third party administrators was underway.
George Town MLA Alfonso Wright asked whether CINICO and the Cayman Islands health care system in general were subsidising patients who could afford to pay on their own.
Mr. Rowell said most of CINICO’s operating losses in the past two years were due to coverage provided under government programmes. He said pensioners made up three-fourths of those costs.
He said most programmes CINICO provides for the elderly or indigent ‘break even.’