The Cayman Islands Health Services Authority expects to end this month with $90.3 million in “doubtful debts” – hospital bills which have not been paid for at least a year and which have less chance, in the authority’s view, of being collected.

On June 30, 2015, the figure for doubtful debts, often called “bad debts,” stood at just over $70 million, meaning those debts increased by about $20 million in one year by the authority’s estimates.

The $90 million figure contained in the authority’s financial statements is about $10 million higher than the HSA expected to end with by June 30, 2016. A year ago, government financial planners estimated the total bad debt would be around $80.5 million by this time.

According to future estimates, the doubtful debts amount would not be reduced or even contained over the next 18 months of the 2016/17 budget. By Dec. 31, 2017, the provision for bad debts in the HSA budget was expected to be more than $108 million.

During the 2012/13 budget, the provision for bad debts at the HSA stood at $45.8 million.

Health Services Authority Chief Executive Officer Lizzette Yearwood has repeatedly warned lawmakers that the bad debt troubles would persist in the “near term.”

Ms. Yearwood said the hospital system had been “more consistent” in enforcing payments since 2014, particularly with patients who underwent elective surgeries.

However, the total allowance for unpaid receivables dates back to more than a decade ago, and some of the bad debts date from the 2004-2005 era.

Government officials have acknowledged the bad debt accumulation, at least in the public hospital service, is partly due to a decision made several years ago not to take debtors to court.

The unpaid debts increased to their current level following a government decision to “scale down” collection efforts by the Treasury Department’s debt collection unit, Financial Secretary Kenneth Jefferson confirmed.

“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 said.

Mr. Jefferson said other efforts were being made to collect the amounts due. He said that can take the form of telephone calls to the debtors and  writing letters to them to remind them they are due to pay the government. The government, in certain cases, can place a charge against a property for payment of a past-due medical bill.

The government’s own evaluation in relation to the unpaid debts in the public hospital system noted: “This position is not sustainable.” The government advocated addressing the health authority debts as a “high priority” via a system redesign to ensure bad debts do not continue to accumulate.

That acknowledgement came in 2014.

About the only thing government can do, according to Acting Auditor General Garnet Harrison, is write off the debts – accept that they will never be collected and agree to lose the money.

“If the full provision is eventually written off, the Health Services Authority will have written off at least $120 million in receivables in the last nine to 10 years,” Mr. Harrison confirmed in a previous report to the Legislative Assembly.

“Ultimately, the financial performance and position of the Health Services Authority reflect the rising cost of providing healthcare and the challenges in collecting its revenues.”

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9 COMMENTS

  1. This is not good news, but I still listen to locals chiming that most of these bills are not from the Cayman people majority, and many are from persons who were on work permit and some still on work permits here and most on illegal immigrants.
    If this is so I really do not see the problem with getting them paid because as “Town Talk has it” many of these debtors have big homes, businesses and in position of paying. I believe the general public would like to see a public breakdown of which countries has a share in these unpaid bills.
    Other excuse chimed were that persons were not getting the good service from HSA, so why pay. I agree that may have been in the past, but now-a-days I see the HSA has been getting there. Many areas is walking briskly and showing more attention in getting their job done. Big noticeable changes have been made, and it is good. I do not know, if it is because of the watchful eye of Ms. Lizette Yearwood, which I can safely say is among the Best of the Best. However, all the praises wont get our bills paid, and I do hope they will find a way and then be in a position to a new beginning.

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  2. I don’t understand how this can happen – another $20 million in debts this year. I was asked to pay my bill to the hospital in full this year before any treatment would even take place, plus a deposit towards other unplanned costs just in case. And the decision not to pursue people for their unpaid debts, well then why would anyone even bother paying when they know there are no consequences. This decision should be reversed. People should be required to pay in full up front, or if they cannot for example in the event of an emergency procedure, then non-payment should be prosecuted, with a charge put against their earnings or property until the debt is paid off in full. There is no free health care system in this country. The good people of this island are basically subsidising those who choose not to pay their bills.

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  3. Unfortunately the problems with revenue will continue. I had a GT hospital visit in September and I had beg the hospital to bill my insurance by December (for a September injury) so that I had a complete picture of the costs of my injury. The other hospital billed my insurance within a week and was paid. By the time GT hospital billed my insurance, my ‘out of pocket’ had been paid but they didn’t know that, therefore I was owed a refund and that took two months to get a refund. The response I got from the GT hospital was that they didn’t have to bill for six months…. that kind of relaxed attitude toward billing an insurance company for payment is a problem.

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  4. There are types of fraud,theft that can be conducted in perpetuity, especially if payments are made in cash. If I remember correctly auditors were not able to test controls over accounts receivable.
    Twyla, even if there are uninsured foreigners and illegals on this island, they all got to have an open brain or heart surgeries to accumulate such amount of debt. Something is fishy here. All professional expats are fully insured, and the rest wouldn’t be here if they were seriously ill.

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  5. Really, blame it on the expats, blame it on work-permit holders? There’s no $ for an ambulance–blame it on the expats. There’s too many Caymanians out of work, blame it on the expats. Oh right, your sources for blaming expats, the chatter in the community. Keep up the divisiveness, keep up the badgering, and see how people who should live and work as a community, for the greater good of Cayman, allow it to fall apart. It’s happening and only gets worse with this kind of non-researched, ill-informed opinion.

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  6. You know what I think about this bad debt at the hospital , is that the Government makes these laws and rules , then when they do it you can expect loopholes, whiteholes, sinkholes , an any other kind of hole to be in it that’s why the debts gets so high , and stop the divisiveness and go back to work and live like real people live .

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  7. I recently was taken to the hospital by ambulance. I received good treatment in the ER and the doctor said I was OK to leave.
    On leaving I went to the cash desk and paid. But it would have been just as easy to walk past the cash desk and go.

    How to stop this? Just make sure that when someone is discharged they are accompanied to the cash desk.

    What if they have no money? Set up payment terms.

    But is a tough problem. Do you just let people die if they can’t afford treatment?

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  8. To those wondering why Health City doesn’t have an emergency department for East Enders, here is one reason I’m sure. They are able to select their patients and ensure their ability to pay, unlike CIHSA.

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  9. might be worth a Freedom of Information request – How much is owed by Caymanians, non Caymanians on work permits, tourists, cruise visitors and ‘others’?

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