PHILIPSBURG–St. Maarten Hospitality and Trade Association (SHTA) says authorities should not implement General Health Insurance (GHI) until the country’s economy has sufficiently recovered from the impact of the 2017 hurricanes.
The association made the statement in an invited comment from The Daily Herald on GHI. SHTA said that with the exception of the name change from National Health Insurance (NHI) to General Health Insurance, there have been no meaningful changes to the law proposal over the past 19 months, when the association was first asked to weigh in on the issue.
SHTA told this newspaper 19 months ago that it is cognizant of the fact that something needs to be done to guarantee the sustainability of the healthcare services in St. Maarten and indicated that it fully supports the solidarity principle.
SHTA has attempted to engage with the Health Ministry on NHI by providing alternatives.
“We have always recommended a piecemeal approach – i.e., tackling some of the most pressing issues that are easy to resolve on their own – for the fragmentation that is heralded as one of the primary issues. OZR [the civil servants package – Ed.] is to a large extent part of this fragmentation. This is up to government to address with the civil servants through the GOA. As far as we know, this hasn’t started yet. This also touches on the solidarity issue,” SHTA said.
It said GHI is a framework law that sets out to regulate “all sorts of things” through a ministerial decree, including issues such as defining groups and percentages. “In effect, this law proposal attempts to make a framework to levy a second progressive income tax, rates to be established through ministerial decree.”
There are several aspects of GHI about which SHTA, a private sector/employer representative, is concerned. SHTA said government refers to the Dutch instruction and the Committee for Financial Supervision CFT as the reason for GHI.
“This indicates that they have not learned the lessons that should be learned from the ZV/OV fiasco. The reason that government’s health expenditures became unmanageable (the cause for the instruction) is because they did not make the hard decisions when they needed to be made,” SHTA said.
According to the SHTA, as the care consumption grew, the financial sustainability of the ZV/OV funds became worrisome. At the same time, care providers, primarily St. Maarten Medical Center (SMMC), medical specialists and family doctors, started complaining because medical tariffs were not increased/adjusted in time.
Government never adequately budgeted for ZV/OV and FZOG funds deficits and was confronted with those deficits after the financial statements were prepared, resulting in large payables to SVB and later Social and Health Insurances SZV.
In an effort to not increase deficits, medical tariffs were not adjusted. As a result of the unpopularity of premium rate increases, ZV/OV rates were not adjusted and the premium income level was not sufficiently increased. Because of below-par remuneration of medical specialists, the care provided on-island decreased and medical referrals abroad increased as of 2011.
“This increase became more serious as we went along without adjusting the tariffs and premium rates. As a result, the fund deficits increased more and the whole thing became unmanageable, SHTA said. “This is the real cause for GHI, but if that is not recognised, we are set up for failure again, this time for much higher amounts.
“We do not agree with the interpretation that the CFT is ‘forcing’ the implementation of GHI. This has been discussed with government as well as the CFT. On the one hand government says that CFT is pushing the timeline for implementation, while the CFT indicates that they (CFT) have always been told that government would resolve the healthcare deficit issue by implementing GHI.”
SHTA said its concerns still stand that rushing through with the GHI law will do more damage than it is worth.
“SHTA has been advocating that the influence of government on SZV is too strong. Politicians are looking to SZV funds to finance projects important to government. We just mention the acquisition of the Government Building and the financing of the hospital. Both create clear conflicts of interest and both should not have happened.
“The distance between SZV and government needs to be increased by creating a Supervisory Board that appoints the management and auditors of the organisation, to be formed by representatives from the (real) private sector, labour unions and government. Without this change, SHTA will never agree to the implementation of GHI in this manner.
“In addition, government owes SZV considerable amounts of money (at this time in excess of NAf. 80 million). As a result of the close relationship between SZV and government, the collection efforts of SZV are close to non-existent and consist solely of stopping payment of OZR bills from care providers and pharmacies.
“Mind you, this only happened after government’s OZR arrears topped NAf. 18 million. After a few months of this, it is these service providers and pharmacies that do the collection for SZV by stopping providing services and medicine without compensation. As a result, government made upon implementation of GHI, SHTA fears that government will again build up arrears without SZV putting sufficient effort in collection and no longer being able to single out government employees.”
According to SHTA, at this moment SZV is insufficiently transparent. “The last published financial statements (SZV website) are those for the year 2014. SHTA has been informed that the cumulative balance of all funds (ZV/OV, FZOG, AVBZ, OZR (balance, not a fund)) at the end of 2018 is more than NAf. 100 million negative. It was government’s intention to roll over existing funds into the GHI Fund. It is SHTA’s opinion that you cannot start GHI with a negative fund balance of more than NAf. 100 million.”
SHTA said many of its concerns outlined in its last statement made to this newspaper 19 months ago still stand. It said that although its concerns had been raised many times, a year and a half down the line it is still being asked the same questions and when it puts positions forward in writing it receives no response.
SHTA says its concerns can be addressed if authorities are very clear in the actual law proposal and by sharing information and putting a proper working group together that will really look at attempting to solve some of the issues that exist, “but only if the Ministry is willing to start the review process all over again, as we feel the changes required are not insignificant.”
Message to authorities
SHTA has suggested in the past that a roadmap towards GHI be formulated that consists of a few steps. These include to merge and harmonise the existing funds; start paying premiums for civil servants and PP card-holders at the same level as the private sector and increase ZV premium by 2 per cent from 12.5 per cent to 14.5 per cent evenly divided over employers (+1 per cent) and employees (+1 per cent); and at the same time reduce the AVBZ premium from 2 per cent to 1 per cent, by reducing the employee’s share from 1.5 per cent to 0.5 per cent (-1 per cent).
The road map should also include increasing the ZV/OV income limit to NAf. 100,000 per year (this significantly increases premium income and reduces the average expenses per insured, the fund will cover in excess of 90 per cent of the residents of St. Maarten, it creates access to care for all, assuming persons with income in excess of NAf. 100,000 will have private insurance or are able to cover their medical expenses), and changing the supervisory board and management set-up of SZV to create sufficient independence from government.
SHTA also suggests building up the trust level between government and the private sector by meeting payment obligations, awaiting economic recovery (post-Hurricane Irma) and implementing full GHI.
“SHTA’s advice to government is to make the changes mentioned above while you finalise and improve the framework legislation and develop the additional legislation required.
“Wait with implementation of GHI until our economy has sufficiently recovered (all hotels and resorts re-opened, visitor levels in excess of pre-Irma levels) and develop proper data and work on the relationship with the social partners.
“And when actually moving ahead with GHI, be very, very careful. Once you have increased the premium income level to NAf. 100,000, any further increase will only result in very limited income increases, as very few people earn in excess of that income level. Managing fund deficits can then only be achieved through decreasing the level of care (which will be very difficult to achieve) or by increasing the premium percentage or government’s contribution to the fund.
“The latter will create the same problem that was the cause for the need to make changes to the existing system. It would mean that implementation of GHI did not solve anything. Start now working on those parts that can be addressed, like fragmentation, etc. Don’t waste any more time,” SHTA said.