CINICO makes first profit


For the first time, the Cayman
Islands National Insurance Company has made a profit.

According to the government-owned
company’s financial statements, CINICO earned $5.8 million in the 2008/09
budget year. Those earnings, combined with a $3 million government subsidy,
gave the company a nearly $9 million ‘equity position’ – three times what is
legally required – as of 30 June, 2009.

“CINICO was able to curtail the historical
growth in overseas (health care coverage] losses, enabling the company to earn
a profit,” the report states, adding that its administrative costs were also reduced.

The company noted referrals for
patients to overseas medical facilities continued to increase slightly for
2008/09, but that the average cost per case had decreased from US$24,000 to

Moreover, there were fewer
participants in the CINICO plan – overall membership decreased by about 2 per
cent in 2008/09.

This was due mainly to a ‘hiring
freeze’ in the Cayman Islands civil service, which reduced the number of
government employees covered by 3 per cent; and a large, 15 per cent drop in
participants from the government’s standard health insurance contract.

“The decline in membership was
largely driven by terminations of (health care) policies for non-payment of
premium in the low income (patient) category,” the financial report stated.

Savings on overseas claims were
offset partly by increased losses on local health care claims cases, the report

The most expensive overseas
referral cases processed by CINICO included the following types: carcinoma
(cancer), cardiovascular (heart disease), musculoskeletal (various, but
typically trauma-type injuries), neonate (infants) and neurologic (brain,
nervous system).

In particular, neonatal cases in
2008/09 – of which there were only 10 – cost CINICO more than $160,000 on
average per case.

“An example of a complicated case
is a premature baby,” the report stated. “Many years ago, an infant born at 20
weeks was not able to survive, but with improved technology, the chances of
survival have greatly improved.

“However, the improved technology
leads to greater costs in some cases,” the report continued, adding that
premature infant care can cost between US $10,000 and US $15,000 a day.

Heart disease also continues to be
a major factor in overseas health care costs for CINICO and the Cayman Islands.
Some 127 cases were referred overseas in the 2008/09 budget year.

Many of those referrals were “due
to the low levels of in-house specialists” at the Cayman Islands Health
Services Authority – which runs the hospital in George Town.

Despite the good news on the
financial side of things for CINICO, the company noted some serious issues it
will be facing in the future.

In 2008/09, the number of civil
servant pensioners on the health care rolls increased by about 4 per cent. That
figure is only expected to rise further.

“Due to the age demographics of
this group…it is expected that the funding for the health care benefits will
increase exponentially year after year,” the CINICO report stated.

Also, the number of indigent people
covered by the CINICO/Health Services Authority system was expected to increase
with the continued economic downturn.

The CINICO annual report also noted
that the agency has been without a chief executive officer since the departure
of Gordon Rowell in August 2008.

“In the long run, it is at the
detriment of CINICO to be lacking an additional designated position to fully
focus and drive the company’s long-term strategy,” the report stated.


In efforts to improve health care
services to Cayman Islands residents, and thereby cut coverage costs, Health
Minister Mark Scotland announced the start of the CayHealth initiative earlier
this week.

“(CayHealth) is specifically
designed to take the pressure off emergency and acute services by focusing on
implementing preventive health care measures and providing primary health
care,” Mr. Scotland said.

The general idea is to encourage
people to first adopt a healthy lifestyle, and second, to seek regular
preventive care at local clinics and their doctor’s office – rather than running
down to the emergency room when problems occur.

Under the CayHealth plan, Mr.
Scotland said Health Services Authority patients could schedule all
appointments with a preferred general practitioner.

“It allows the physician to build
up a body of knowledge about the patient’s complete medical history,” Mr.
Scotland said.

He said available services in the
district clinics will  be improved so
that patients will not have to travel to George Town to seek care all the time.

Residents will also be able to fill
prescriptions at the district health clinics.

Education classes about fitness
programmes, lifestyle choices, risks of diabetes and other health education
will be held routinely, Mr. Scotland said.

CayHealth will be phased in over a
number of months. Mr. Scotland said several clients of the Department of
Children and Family Services would be the first participants in the new

 The company noted referrals for patients to
overseas medical facilities continued to increase slightly for 2008/09, but
that the average cost per case had decreased from US $24,000
to US $19,000.


Mr. Scotland