The Cayman Islands Health Services Authority’s “bad debt” will reach $80.5 million in little more than a year’s time, according to estimates contained in the government’s budget.
Last year, the Health Services Authority expected its unpaid bills dating back one year or longer would total just under $70 million as of June 30, 2015.
According to the government’s figures, the authority underestimated the shortfall.
The “provision for doubtful debt” in the health authority’s spending plan is expected to reach $72.4 million by June 30, 2015, including some $14 million in unpaid debts amassed over the past year.
By June 30, 2016, that “bad debt” is budgeted to reach $80.5 million, according to the Health Services Authority’s own estimates.
If that comes to pass, the HSA will have nearly doubled its unpaid receivables in just three years, from an estimated $45.8 million in “doubtful debt” during the 2012/13 budget year.
The health authority’s chief executive officer, Lizzette Yearwood, warned the Legislative Assembly’s Public Accounts Committee in late March that the situation with the bad debts was likely to persist in the near term.
Ms. Yearwood told the committee that the public hospital system had been “more consistent in enforcing our payment policy,” particularly with elective surgeries.
However, she noted that public hospitals still have a mandate to deliver care to those who can’t, or won’t, pay for it. “There’s still a culture in the public that a number of persons feel that healthcare is free,” Ms. Yearwood said in March.
The total allowance for unpaid receivables has been compiled over more than 10 years, and some of the bills owed are more than a decade old, Ms. Yearwood said.
An analysis last year by government of the amounts owed indicated that about $10 million of the old amounts owed to the health authority consisted of individual bills of less than $1,000 each.
In addition, Ms. Yearwood told the Public Accounts Committee that the HSA is seeking vendors to computerize hospital records, which should help ensure bill collections are better tracked and kept up to date.
According to a government audit released earlier this year, daily reports to reconcile the Cayman Islands public hospital system’s cash collections cost too much and wasted office space in the hospital because the data was printed out and piled up in administrative offices.
The audit of the Cayman Islands Health Services Authority revealed 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 very 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.