Daily reports to reconcile the Cayman Islands public hospital system’s cash collections cost too much money and wasted office space in the hospital as the daily data was printed out and piled up in administrative offices, according to a government audit.
The audit of the Cayman Islands Health Services Authority completed in June noted that three reams of 8×11 paper were used each day to print cash reconciliation reports that quickly clogged up storage space and made it painstakingly difficult to find any information via a manual search.
“The retrieval of documents was…noted to be tedious,” an Internal Audit Unit review of the health authority’s operations stated. “The same information could be readily accessed [from the HSA computer filing system] when required.”
Auditors also noted that a number of HSA staff spent hours printing out billing statements and stuffing them into envelopes to be mailed.
“We were informed that staff tasked with collection and credit control spent a significant portion of their time placing statements into envelopes…time that could have been better spent on credit control and collection,” the report stated.
“We are concerned that the current operations of the HSA, which require a high consumption of paper, limit the HSA’s efforts to reduce costs.”
In response to a number of other concerns identified in the June 2014 review, health authority officials reported low staffing levels as being at least partly responsible for difficulty in collecting past-due accounts from healthcare clients who were not 100 percent covered by the Cayman Islands National Insurance Company.
The HSA expected to have nearly $70 million in unpaid bills from services to patients by the end of the government’s current budget year in June 2015, according to government financial records.
The amount is referred to in the government’s 2014/15 budget ownership agreements as a “provision for doubtful debt,” meaning debts that have been owed for more than a year. If the projection of the additional unpaid bills occurs as finance managers expect, the HSA’s unpaid receivable will increase from an estimated $45.8 million to $69.9 million in just two years.
The total allowance for unpaid receivables has been compiled over a period of more than 10 years, and some of the bills owed are more than decade old.
Then-Health Minister Osbourne Bodden said in June that the HSA faced a number of daunting problems – not just staffing – as the public health agency tried to collect on massive unpaid patient bills. Included among those difficulties was that the “swipe-card” payment system used by the public hospital since early 2011 was not able to collect patient deductible payments for services outside of regular business hours.
Most public healthcare system patients who are insured through the Cayman Islands National Insurance Company, or CINICO, do not have to pay deductibles on health services. However, some do owe payments for hospital services, and most other private insurance companies do charge deductibles for hospital services. It had been the intention to extend the swipe system to private sector insurers as well, but that never happened.
Other problems with uncollected hospital bills include the more common situation of insurers refusing to cover services, or employers not keeping up with insurance payments for employees, Mr. Bodden said. Issues also arise with transient workers who leave the islands without paying medical bills, or when tourists receive medical treatments for which they can’t pay.
“But this is not just a visitor issue. Many of these nonpayments … are from our own residents,” Mr. Bodden said.
Looking at bad debts accumulated over the past three-and-a-half years, Mr. Bodden noted that some $10 million owed consisted of individual bills of less than $1,000 each.
“If these patients would even pay these small bills, it would make a substantial contribution [toward resolving the debt],” he said. “It is not good enough to think government will take care of this.”