Public health: Cayman's dire case of 'bad debt'

Riffing on the topic of public libraries, which allow people to check out books, free of charge, on the promise that they’ll return them when they’re finished, comedian Jerry Seinfeld quipped: “It reminds me of like this pathetic friend that everybody had when they were a little kid who would let you borrow any of his stuff if you would just be his friend.

“That’s what the library is. A government-funded pathetic friend. And that’s why everybody kind of bullies the library. I’ll bring it back on time … I’ll bring it back late … Oh, what are you going to do? Charge me a nickel?”

The topic of the joke could just as well have been the Cayman Islands public health system. The butt of the joke is, of course, local taxpayers.

During a span of five years, from mid-2011 to mid-2016, officials project that Cayman’s public health system will have accumulated unpaid debts at a pace of $10 million per year, going from $30 million in past-due debts to $80 million (which works out to more than $1,300 for each of the roughly 58,000 residents in our country).

All of those debts will be at least one year overdue, which means, as anyone with experience in receivables knows, that it is highly unlikely they will ever be paid back, in the absence of coercion. But coercion is precisely what has been missing from the government’s approach to debt collection.

Indeed, Financial Secretary Ken Jefferson told lawmakers last week that his staffers had received explicit instructions from policymakers years ago not to take legal action against people who owed money to government for medical debts. (For the record, this would have happened during the UDP administration led by then-Premier McKeeva Bush.)

“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.

He added that the Treasury Department’s debt collection unit had done what it could within the confines of those parameters by sending reminders to debtors in the form of telephone calls and letters. This is not meant to denigrate the efforts of our Treasury officials, who have been effectively declawed and kenneled by higher-ups, but without the credible threat of legal action, even the most sternly toned phone call or strongly worded letter is, in a word, “pathetic.”

The government’s conscious inaction and deliberate passivity on the collection of healthcare debts has encouraged, even validated, the widespread belief in Cayman that, as Health Services Authority CEO Lizette Yearwood described it, “healthcare is free.”

That’s because healthcare has been free, at least for those who would rather dodge phone calls and toss unopened letters into the waste bin.

Mr. Jefferson said a significant portion of the $80 million in unpaid debts is because of expensive overseas medical treatment, which he estimated amounted to somewhere between $12 million and $15 million. Cayman taxpayers deserve to know how the other $65 million or more accumulated, and who owes it – indigents, deliberate non-payers, visitors who absconded, or insurance companies that have proven recalcitrant.

If it is the case that most of the healthcare debts are owed by people who truly can’t pay, then Cayman officials should demonstrate honesty in accounting, and write off those “bad debts” as advised by the auditor general. If Cayman lawmakers don’t have the political will to force people (including likely voters) to pay their debts, then they should demonstrate honesty in government by formulating an explicit policy of who has to pay, and who doesn’t, that is in line with reality.

If the government is serious about collecting unpaid healthcare debts from those who can, but won’t, pay, then they should allow the Treasury’s debt collection unit to do its job, and sue in court for the money that is owed to the people of Cayman.