HSA budget by the numbers

The Cayman Islands Health Services Authority is keeping its revenues just about in line with its expenses, but the public health agency is also still dealing with customers who won’t (or can’t) pay what they owe, and also have challenges similar to other public authorities in regard to obligations to future costs for pensioners and retirees. 

The authority’s financial statements for the budget year ending 30 June, 2011, were tabled in the Legislative Assembly this March. 



According to the financial records, the authority’s revenues in fiscal year 2011 were $83.5 million and its expenses were $83.7 million. 

Much of the authority’s revenues are tied to other government-related entities. According to the notes to the financial statements, the authority’s management estimates that transactions with government-related entities account for at least 71 per cent of the authority’s revenue, and between 5-10 per cent of its 
operating expenditures. 

For example, during the year the authority billed Cabinet $28.9 million for services such as medical care for indigents and children, and other government programmes. Additionally, the authority took in revenue of $30.9 million for providing health care to government employees and dependents (reimbursed via the Cayman Islands National Insurance Company), and for providing ancillary services to government entities. 

Free medical benefits are offered to the authority’s employees and dependants. The portion provided by the authority totalled $4.5 million in 2011. 


Debts, liabilities  

In 2011, the authority wrote off bad debts of $38.5 million that had accumulated over a two-to-seven year period. 

According to the financial statements, the authority serves a group of “self-pay” customers who do not have insurance coverage (or sufficient coverage). The amounts owed by “self-pay” customers “are estimated to be 65 per cent uncollectable”. 

The financial statements show $18.5 million in accounts receivable from the “self-pay” group of customers. 

The authority had some $94.4 million in total assets, compared to $10.1 million in total liabilities, for a net worth of about $86.2 million. 

The authority had a $3.4 million net liability arising from unfunded pension obligations in regard to the defined benefit plan, in which 104 employees were enrolled. (The defined contribution pension plan covered 598 employees, by comparison.) 

An additional potential liability concerns how much the authority will be on the hook for its retirees whose medical coverage was dropped by the Portfolio of the Civil Service. The authority has paid for those retirees’ medical bills since April 2010. 

According to the notes to the financial statements, “The continued payment of these medical bills constitutes a constructive obligation on the Health Authority to be liable for future medical bills of such retirees although there is no policy decision yet issued by the POCS as to who should be liable for the medical costs of these retirees. 

“Such liability has not been estimated or recognized in these financial statements and the Health Authority is currently trying to engage an insurance company to cover the retiree’s medical benefits.” 


Auditors’ take  

The Cayman Islands Auditor General issued some disclaimers to his opinion on the authority’s financial statements. According to the auditor’s report, he wasn’t satisfied that the authority’s reported patient revenues of $68.5 million were complete. For similar reasons, he couldn’t determine the completeness and valuation of patient-related accounts receivable. 

The auditor general also was unable to determine the accuracy of accumulated deficit as reported in the balance sheet, due to previous disclaimers of opinion on the authority’s financial statements for the previous five years. 

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