The Cayman Islands government’s estimated unpaid hospital bills have risen from an estimated $30 million in 2010 to what’s expected to be $80 million by the end of the next budget year.
The unpaid debts, all of which date back at least one year, increased to their current levels following a government decision to “scale down” collection efforts by the Treasury Department’s debt collection unit, Financial Secretary Ken Jefferson said last week.
“Perhaps as far back as 2010, a decision was made by the then-government that … the unit was told not to pursue the collection of debts through the courts,” Mr. Jefferson told the Legislative Assembly’s Finance Committee.
Mr. Jefferson said he didn’t wish to leave the committee with the impression that no efforts were being made to collect the past-due debts.
“Since , the unit has continued … to pursue debts that are due to government,” he said. “That pursuit can take the form of telephone calls to the debtors. That also includes writing letters to them to remind persons they are due to pay the government.”
The government can, in certain cases, place a charge against a property for payment of a past-due medical bill. However, Mr. Jefferson acknowledged that some of the past-due debts – dating back 10 years or more – are likely a lost cause and government needs to do something about them.
“The government … financial statements do actually reflect a considerable bad debt provision,” he said. “The auditor general has recommended that government clean up its financial statements by removing, on one hand, the debt receivable and, on the other hand, removing the provision so that overall there’s no impact on the government surplus or deficit for that particular year.”
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 current 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, 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 authority’s own estimates.
If that comes to pass, the HSA’s unpaid receivables will have nearly doubled 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.
Mr. Jefferson put most of the blame on unpaid medical bills for extensive overseas medical treatment, which in some cases could total $500,000 or more for a single patient. The financial secretary noted that unpaid debts from such treatments alone total somewhere in the region of $12 million to $15 million.
“Often in these situations, it is said to be a matter of life and death … and a decision needed to have been taken on the spot [to provide the overseas treatment], Mr. Jefferson said. “There’s often a promise by a family member who is well … that they would return and allow the charges etc. to be placed. We have sought promissory notes in the past. There’s a question as to whether those have any legal effect.”