$70 million more: Put it on the tab

Another numbing number.

We refer to the $70 million in unpaid bills the Cayman Islands Health Services Authority expects to be owed by the end of June 2015.

It’s the latest in a long series of staggering figures — $35 million for Cayman Islands Development bank loans, US$312 million in soon-to-mature government bonds, $178 million for public pensions, $1 billion or more for public health liabilities — that represent money Cayman’s government has already spent or committed to spend, with little obvious benefit to the average taxpayer, and with few government solutions aside from proposals to keep our creditors at bay.

Take the unpaid bills, unfunded liabilities and looming debts, and combine them with the public funds tied up in personnel costs ($242 million for central government employees), payments to service existing debt (about $74 million) and ritualistic subsidies for loss-making entities such as Cayman Airways ($23 million) and Cayman Turtle Farm ($9.5 million) — and central government’s $658 million budget begins to seem tighter than it may have at first glance.

Factoring in all the hundreds of millions of dollars that are out of lawmakers’ control (for practical, personal and political reasons) helps to dispel the mystery of how Cayman — which is not only one of the wealthiest jurisdictions in the history of mankind, but is also one with the least amount of international obligations — cannot afford necessary infrastructure projects such as highways, landfills and ports, and indeed is hard-pressed to fulfill basic governmental functions, such as maintaining roads, collecting garbage and delivering the mail.

It may not be fair to declare categorically that Cayman’s government, over recent decades, has flat-out wasted the tax revenue (tens of billions of dollars) it has received from financial services and tourism (not to mention the windfall in duty that resulted from post-Ivan repair and reconstruction), but enormous sums certainly have been cavalierly squandered.

Setting aside some of the largest numbers for now, we’ll focus on one that’s a bit smaller but as inexplicable as any: The $29.3 million in unpaid bills owed to the Health Services Authority just for the two-year period from June 2013 to June 2015.
A pair of comments from lawmakers outlines our thoughts on the subject:

First, Finance Minister Marco Archer: “While there is a legitimate case of some people being unable to pay, there are some people who believe they do not have to pay.”

Second, North Side MLA Ezzard Miller: “We’re talking about $30 million. How can we have $14 million in bad debts for the year?”

While the amount of unpaid bills due to any organization, especially a healthcare provider, will never be zero — how could it possibly be $29.3 million over two years … in a country of only 55,000 people … where more than 90 percent have health insurance coverage?

We can imagine a handful of scenarios resulting in unpaid healthcare bills, including:

Visitors who receive treatment while in Cayman, then board an airplane or cruise ship, never to be seen again.

Uninsured residents who are not, or cannot, be enrolled in CINICO, and who truly cannot afford to pay.

Insured residents who cannot, or will not, pay the portion of health expenses not covered by their insurance policy.

Such cases exist, but surely they must be anomalies, those who slip through the proverbial cracks in the system.

But when we’re talking about a cost of $14 million per year or more, we’re no longer talking about a crack. We’re talking about a crevasse, and one that Cayman cannot annually afford to fill.


  1. The whole health insurance industry in the Cayman Islands is nothing more than a big scam. The truth is that by the time you pay the high annual deductible and then pay for what the insurance companies say is not covered under the policy there is very little benefit, if any, to the vast majority of people with health insurance. Also, if the figures stated are correct, would it not be better for the government to have some form of national health insurance and do away with the ponzi schemes that are currently masquerading as legitimate health insurance coverage?

  2. I am pretty sure they did not try or know how to collect. Or there something else hidden behind those numbers. Island’ visitors and uninsured could not generate so much receivables. No costly medical services provided on this island and those in need of costly services are sent someplace else. Something is wrong with numbers here.

  3. Accounts receivable should be investigated for a potential fraud. Hospitals where
    administrative systems are not well developed or transparent, making it hard to
    distinguish between intentional fraud, and abuse due to incompetence or ignorance are particularly vulnerable to fraud. In
    addition, hierarchical structures and personnel management systems may discourage
    people from voicing concerns or pointing out poor performance for fear of retaliation. Here are 2 types of
    fraud that particularly common in hospitals. These include: 1) diversion of patient fee revenue at point
    of service; 2) diversion of accounts receivable, or checks submitted by patients or
    companies to pay debts owed on their accounts.
    One way in which fraud occurs in the process of collecting and recording of fee revenue is through the use of a refund account. Another way to divert fee revenue is by altering receipts.
    Patients may come in to settle their debt with a check, or a company
    may send a check to pay for services provided on credit to company employees.
    Accounting clerks who open the mail or receive the checks from patients may deposit the
    check into a personal bank account. Since the debt still appears as owed by the client,
    the accountant may later write off the client’s outstanding balance as bad debt or may
    wait for another check from a different patient/client and apply this to the account whose
    check was stolen. This is termed lapping, or teeming and lading.

  4. While the knee jerk reaction is to assume this is down to the customer either being unable or unwilling to pay.
    The numbers don’t reflect that, it is far more likely that the lions share of this ‘was’ or ‘should have been’ covered by insurances and the process for reimbursement was not correctly followed – either claims denied or the patient not being correctly connected to their policy (administrative errors); resulting in a windfall for the insurance companies.

  5. This isn’t as unbelievable as it may seem, that only comes out an average of 254.00 per resident. This can be folks coming in that have no insurance and never paying the bill or folks with insurance never paying the copay, not to mention the visitors that get treated and then get back on the ship or plane.

    The answer to this isn’t as complicated as it may seem. For visitors all they need to do is ask for a Credit Card when they arrive at the ER and for the local people they just have to actually try to collect the money. In such a small country Collections can easily find people, hell just go knock on their door, if they don’t pay file a claim. Do they even have a collection department. As for the potential fraud, we could ask Mr Swarbrick or the financial crimes unit to take a look at that.

  6. Average per person doesn’t apply here. Most professional expats are healthy young people and they go to Chrissie Tomlinson Memorial Hospital where they pay in full at the time of service. 10% of the remaining population of approx. 30,000 might be uninsured or under-insured. Assumption that they ALL had heart/kidney/liver transplant, open brain surgery or required prolonged life support is unreal. Gastric bypass and expensive dental work is done in Miami.

  7. Thanks for putting that into perspective, Lucia. I wonder how many of the staff drive expensive fancy cars or live in homes they could never afford on their regular salary. Sounds like the only way to clear this up is for a full audit of their books to find out what went where. Sounds to me like there’s a lot of people in Cayman with their hands in the cookie dish.

  8. I wonder if this has anything to do with insurance reimbursement rates versus what the hospital charges. In the states, hospitals charge a rate for services which is usually what self payers pay, however insurance companies usually have their own schedule of what they will pay for services which is much lower than the hospital’s base rate. The government then pays an even lower reimbursement if you’re on a government insurance plan. It’s a silly game but it does let hospitals charge inflated rates to rich individuals or smaller insurance companies and keep wishfully thinking on all other services. In most cases the difference between the base rate and the insurance company’s rate is just written off as bad debt. It’s pretty standard practice but doesn’t necessarily mean anything is done wrong.
    Of course that’s just a possibility. The other possibility is that since it’s Cayman – a lot of people just aren’t paying their bills.