EDITORIAL – The unhealthy condition of public healthcare

The unpaid bills owed to the Health Services Authority, now exceeding $100 million (please pause and re-read: $100 million!) is merely one of the myriad public healthcare problems threatening the physical — and economic — health of the Cayman Islands.

At the outset, let us draw a clear distinction between the caregivers at Cayman’s public hospital and clinics — doctors, nurses, technicians and other support personnel, many of whom toil long hours through nights, weekends and holidays to deliver exceptional care to their individual patients — and the government’s behind-the-scenes “business side,” with its ongoing financial disarray that might well be considered administrative malpractice.

We won’t recount here the sorry saga of when political interference played a role in advancing mere incompetence into scandal and prosecutable corruption. Exhibit A, of course, is the CarePay matter, where the former chairman of the Health Services Authority board, Canover Watson, has now changed his address from the executive suite to a cell in Northward prison.

The Editorial Board of the Compass does not pretend to know how to operate a healthcare system, but the government should not pretend to know how to run one either — because it doesn’t.

The Health Services Authority, which most residents still rely on for their primary healthcare needs, has seemingly been unable to deal with issues that every business would consider mundane or routine, such as billing and managing payables and receivables. We constantly hear tales, including in our own newsroom, of individuals who may have received treatment years ago at the Cayman Islands Hospital — and are just now being invoiced for services rendered. How can this be?

Last week, a parade of HSA officials appeared before the Public Accounts Committee to answer questions about exorbitant growth in “accounts receivable” — $94.5 million in so-called bad debt, much of which the appointed HSA board is reluctant to write off.

During last week’s meeting, PAC member Chris Saunders (an accountant by trade who represents Bodden Town West in the Legislative Assembly) pursued a keen line of questioning of HSA Chief Executive Lizzette Yearwood, trying to get to the bottom of how HSA managed to accrue $53 million in unpaid debts over two years (following a 12-year period where “only” $69 million in unpaid debts had accumulated).

Astonishingly, Ms. Yearwood told the committee the source of much of the dramatic increase was the government-owned Cayman Islands National Insurance Company, which was switching its third-party insurance provider, causing accounts to be not adjudicated and thus unpaid.

Mr. Saunders listened to administrators’ explanations, then declared: “These numbers aren’t adding up.”

Mr. Saunders is correct to press HSA officials about their shoddy billing practices and spotty collections history, but Cayman’s healthcare challenges are far more critical than unpaid bills.

Most troubling is the astronomical amount of unfunded public healthcare liabilities — now pegged at a breath-taking $1.7 billion. That figure is the future amount the government estimates it will have to pay to provide healthcare coverage to retired civil servants and certain other citizens (such as former seamen) over the next 20 years.

The U.K. should be paying particular attention to this matter. If at some point, the Cayman Islands government is not able to satisfy this obligation to its former employees, the issue will arise as to whether England has an enforceable contingent liability which would obligate it to make good on Cayman’s unfunded largesse.

Unfunded healthcare liabilities are a near-universal problem (see Dan Mitchell’s column, also on this page) that, if not addressed seriously and swiftly, can and will eventually kill companies and countries.

One need not be a doctor, an accountant or an actuary to make this prognosis: Without a radical course of treatment, the long-term outlook of Cayman’s public healthcare system, and by extension the country’s economy and residents’ quality of life, is at serious risk.

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