1 OVERVIEW OF 2019 SPR, BHB FUNDING & HEALTH FINANCING REFORM May 2019 The Hon. Kim N. Wilson, JP, MP Minister of Health
2 Overview Context: Bermuda’s health situation Standard Premium Rate status BHB funding change Health financing reform Bermuda Health Strategy update
3 THE CONTEXT Bermuda’s health situation
4 We have some strengths and some challenges Good outbreak control
5 Our health system does not get value for money Bermuda: 3 rd most expensive, 13 th life expectancy
6 Health costs consume 11.5% of GDP
7 Bermuda has bent the healthcare cost curve and averted at $1 billion fiscal cliff In 2010 it was projected health spending would reach $1 billion
8 75% of adults are overweight or obese Prevalence of overweight and obesity (BMI 25 and over), OECD Comparison, 2014 (or nearest prior year available) SOURCE: Health in Review, 2017OECD Health Data 2017
9 12% of adults have diabetes
10 54% of Adults have one to two chronic disease risk factors: smoking, low fruit/ veg intake, inactivity, overweight or raised blood pressure SOURCE: Health Survey of Adults 2014 (STEPS)
11 $78 million is spent on just 2 preventable conditions. That’s 10% of all health spending SOURCE: BHeC
12 STANDARD PREMIUM RATE 2019
13 “Status Quo” Scenario: An $84 actuarial premium increase unacceptable to the public and employers. SPR of $355.31 vs $439.32 By streamlining the way BHB is funded we protect the standard premium to pay for healthcare only
14 The SPR, HIP and FutureCare premiums will not increase in 2019 BHB block Funding funding for NCDs Dialysis funding No premium increase Healthcare $ are protected for healthcare Basic health benefits are kept Fiscal space for chronic disease benefits
15 BHB FUNDING CHANGE
16 46% of health spending is on hospital care and over 95% of SHB/SPR spending
17 Most components of health spending have been stable over the past 15 years
18 Currently 4 BHB funding sources
19 Moving from paying for volume to paying for value A mixture of payment systems is recommended in any health system to incentivize desired behaviours
20 The streamlined funding model prevents $20 million added spend and created more opportunity for oversight and utilization review
21 While the standard premium will stay the same, the MRF premium will form a larger part Current premiums 1 st June premiums Supplemental Premium Supplemental Premium e.g. $900 e.g. $ ?? SHB SHB Premium Premium $355.31 $355.31 Mutual MRF Reinsurance Fund (MRF) Premium $101.97 ($331.97)
22 The new BHB funding system will ensure health premiums only pay for healthcare
23 To improve health outcomes and lower costs we have to change the way we pay for healthcare
24 HEALTH FINANCING REFORM
25 The National Health Plan 2011 started the reform process: a Task Group was appointed to reform health financing, an RFP contracted actuaries and Harvard advisor, and an ‘options report’ was produced in December 2012 Finance & Reimbursement Task Group Kevin Monkman, MOH 1. Collin Anderson, HID 2. Jennifer Attride-Stirling, BHeC 3. Delia Basden, BHB 4. Dr. Kyjuan Brown, Physician 5. Teresa Chatfield, Business 6. Michael Fisher, Business 7. Nicola O’Leary, Cabinet Office 8. Larry Peck, Insurer 9. Marcelo Ramella, Economics 10. Gerald Simons, Insurer 11. George Spurling, MS 12. Richard Winchell, ABIC 13. Michelle Ye, BHeC Economist 14.
26 The Government didn’t waste time re-inventing the wheel, but chose to use the work of the FRTG to progress health financing reform 2013 NHP 2015 2017 Re- in Rebranded started abeyance as BHS HFR work
27 In 2012 FRTG considered all possible options to finance healthcare and settled on the two presented as the most viable to achieve the reform goals Models Considered Reform Goals Medical Savings Accounts Universal coverage Individual risk rating Decent basic package National Health Service o Financial risk protection Single payer system o Prevention and management Affordable Status quo with guaranteed issue Cost containment Status quo
28 The 2012 Health Financing Options were developed with consultation and expert advise, considered all possible options, and proposed the most viable models for Bermuda, designed to reduce duplication and increase efficiency
Current Health Insurance Financing System Repayments RESIDENTS Government Taxes Employers Consolidated Fund Funding Premium Individuals Standard Premium Rate Funding MOH Grant Grant INSURERS Out of pocket payments (e.g . copays) GEHI Argus Claims Reimb. Financial HIP LCCA Assistance BNTB BF&M Premiums FutureCare Veterans Fund HSBC Colonial Fixed budget Premium Transfer Claims Claims Reinsurance Mutual Reinsurance Fund Kidney Claims & Out of pocket payments PROVIDERS KEMH Patient Care Local Subsidies Providers Overseas NOTES: Hospitals 1. Insurers light = SHB MWI dark = supplemental benefits. 2. Excludes Public Health Services and Version 5– Jan2019 Residential Care Homes
30 Two health financing options were developed that achieve the health system reform goals of efficiency, sustainability and improved healthcare access
31 Both options improve on the current system and achieve universal coverage
32 To improve health outcomes, access, and lower costs we have to change the way we pay for healthcare
33 The HFR initiative is led by the Ministry supported by the Health Council a Steering Committee, and a Stakeholder Consultation Group MINISTER OF HEALTH Directs Policy HFR STEERING COMMITTEE BHeC Assesses and advises Technical support STAKEHOLDER CONSULTATION GROUP Stakeholder perspective, input and feedback
34 Next steps in health financing reform Q4 Implement in phases with Working Groups Q3 Develop a roadmap with consultation Q2 Finalize Government’s policy direction Q1 Consider Stakeholder Consultation Group Report and updating modelling Update Health Strategy for 2020 – 2025 to create unifying vision for health
35 THANK YOU
Current Health Insurance Financing System Repayments RESIDENTS Government Taxes Employers Consolidated Fund Funding Premium Individuals Standard Premium Rate Funding MOH Grant Grant INSURERS Out of pocket payments (e.g . copays) GEHI Argus Claims Reimb. Financial HIP LCCA Assistance BNTB BF&M Premiums FutureCare Veterans Fund HSBC Colonial Fixed budget Premium Transfer Claims Claims Reinsurance Mutual Reinsurance Fund Kidney Claims & Out of pocket payments PROVIDERS KEMH Patient Care Local Subsidies Providers Overseas NOTES: Hospitals 1. Insurers light = SHB MWI dark = supplemental benefits. 2. Excludes Public Health Services and Version 5– Jan2019 Residential Care Homes
Government Taxes Employers Consolidated Fund Premium Individuals New Standard Premium Funding INSURERS Argus Grants Out of pocket payments (e.g . copays) Premium Public Insurer BF&M Subsidy Subsidies Administrator GEHI (current plus Colonial supplemental additional eligibles) Claims Transfer Reinsurance RISK PROVIDERS EQUALIZER Local KEMH Providers Overseas NOTES: MWI 1. Insurers Blue= SHB Hospitals Green= supplemental benefits. 2. Excludes Public 37 Health Services and Version 2.1 8 May 14 Residential Care Homes
Government Taxes / Health levies Employers Consolidated Fund Funding New Standard Premium Rate Premium Individuals Administration INSURERS for premium Argus Grants exemptions Out of pocket payments (e.g . copays) Unified SHB Insurer Supplemental Benefits Including premiums for BF&M indigent, DOH, Veterans, Prisons Colonial GEHI supplemental Supplemental Claims Claims SHB Reinsurance PROVIDERS Local KEMH Providers Overseas NOTES: MWI 1. Insurers Blue= SHB Hospitals Green= supplemental benefits. 2. Excludes Public 38 Health Services and Version 2.1 8 May 14 Residential Care Homes
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