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NHI's survival & sustainability @ high risk- Morneau Shepell Actuarial Report

The Actuarial Review of the NHI Plan, done for the Virgin Islands Social Security Board by Morneau Shepell Inc, has exposed the fragility of the scheme. Photo: VINO
The role of the BVI Health Services Authority (BVIHSA) is critical to the survival of NHI. Photo: BVIHSA
The role of the BVI Health Services Authority (BVIHSA) is critical to the survival of NHI. Photo: BVIHSA
Confidence in NHI is also dependent on the efficiency of the Social Security Board (left), which falls under the watch of Minister for Health and Social Development, Hon Ronnie W. Skelton (right). Photo: VINO/File
Confidence in NHI is also dependent on the efficiency of the Social Security Board (left), which falls under the watch of Minister for Health and Social Development, Hon Ronnie W. Skelton (right). Photo: VINO/File
ROAD TOWN, Tortola, VI- It seems that many, including the insurance companies who opposed the National Health Insurance (NHI) Plan in its current form, were right in their fears about the controversial scheme.

In a Actuarial Review of the NHI Plan done for the Virgin Islands Social Security Board by Morneau Shepell Inc., a consulting firm specialising in health care benefits issues, the many risks to the very survival and sustainability of the Government run programme were outlined.

The Report, which was laid on the table of the Ninth Sitting of the First Session of the Third House of Assembly on June 23, 2016, outlined what it labeled as the ‘summary of risks’ to the NHI plan.

Bad economy could kill NHI

The report advised the government that a bad economy could see the programme fail as “government contributions and government funding are inextricably linked to the performance of the economy and the rate of employment.”

In other words, a downturn in the economy and a change on the employment rate could pose a risk to the NHI.

Also Demographic is a challenge for NHI. According to the report “ageing of the population could pose a longer term risk to the NHI, as an ageing population would impose higher per-capita costs and a lower dependency ratio would imply fewer contributions per retiree.”

BVIHSA must have its act together or else!

The role of the BVI Health Services Authority (BVIHSA) is another area that could push the NHI plan to collapse. The report warns that it’s important for the BVIHSA to maintain quality and efficient operations. “The NHI will need to monitor the BVIHSA’s capacity and financial model for the delivery of services.”

The actuarial report said, “There is a risk that if the BVIHSA can’t compete effectively with the private sector or does not hold the confidence of the NHI participants, more care will be sought in the private sector than at the BVIHSA, which in turn may necessitate a reorganisation of the BVIHSA...”

If the Social Security Board who runs the NHI scheme does not have the capacity e.g., technical, financial, administrative skills, and cannot function to deliver a positive experience for all stakeholders, then the confidence in the NHI will not be maintained. 

Chronic Non-Communicable Disease another risk

The report also said that the absence of a capitation/managed care model unconstrained servicing could also lead to increases in cost. In addition, there is also the issue of the Disease Burden. The report stated that “the increasing incidence of Chronic Non-Communicable Diseases imposes higher costs and the prevention of down-stream cost related to untreated conditions is important.”

Another issue that could see the NHI become defunct is the relationships that providers have with the NHI and their continued contracting with NHI could be important for the success of the NHI.

The NHI can fail over extreme weather events and tropical viruses can have an unexpected impact on the programme. Furthermore, advancement in technology could lead to high cost, with increased demand for services, according to the actuarial report prepared by Morneau Shepell Inc.  

Short term break-even; long term NHI could fail

The report advised the government that in 2016 the NHI is estimated to break-even based on the $43.2 Million of funding from Government. This means that over the short term it can work, however, “it is noted that the NHI is exposed to numerous contingent events and risks which could lead to variable outcomes, for example the claims expenditure may range between $73.0 Million and $81.4 Million.

The report recommended that in order for the NHI’s sustainability, establishing a reserve fund at the inception is necessary. The report also advised that government, to help with the NHI programme, should immediately advance approximately $16.7 Million.

However, with the Dr Smith Administration leaving the country broke, this was not possible therefore the NHI programme could run out of money and collapse.

39 Responses to “NHI's survival & sustainability @ high risk- Morneau Shepell Actuarial Report”

  • Online Now (25/06/2016, 15:44) Like (28) Dislike (0) Reply
    very good report VINO keep the good works up
  • nagico n cil (25/06/2016, 16:26) Like (15) Dislike (0) Reply
    I told you so
  • bvibuzz (25/06/2016, 16:29) Like (19) Dislike (0) Reply
    Even when ot fails the NDP will deny such
  • Well Sah (25/06/2016, 16:42) Like (17) Dislike (0) Reply
    What a set of jokers!
  • Schups (25/06/2016, 17:25) Like (3) Dislike (7) Reply
    Everything is a risk. Is this the entire report? So nothing positive? Smh
  • Forward ever? (25/06/2016, 17:35) Like (6) Dislike (6) Reply
    Duh, why are we so gullible. The Govt had the sense to get an independent consultant to point out the risks so measures can be put in place to mitigate those risks. What on earth is wrong with that! You can copy, paste and apply the same risks to any NHI scheme in the world. Does that mean you do not do it? I dare you to point out one such program where the above does not apply. Should we ban scooters because of the risk when you ride without a helmet? And we want to be independent? Give me a break!
    • @ Forard ever (25/06/2016, 18:55) Like (8) Dislike (0) Reply
      While this article is fair, the people believe what they have been taught.
  • Eu (25/06/2016, 17:43) Like (20) Dislike (0) Reply
    hard times are coming
    • Treasury (25/06/2016, 18:11) Like (16) Dislike (0) Reply
      Harder times than you have ever imagined. Turn the clock back 40 years!
  • 4 real (25/06/2016, 17:52) Like (37) Dislike (0) Reply
    Wake up virgin islander worst to come.
  • concern (25/06/2016, 18:22) Like (16) Dislike (0) Reply
    As it stands right now, NHI is not paying benefits correctly. The people dealing with claims seem not to have a clue in dealing with claims.. For one thing one cannot recover even half of what is submitted as a bill. When their partner JIPA send NHI their bill, NHI bills the insured. Never in my life have I seen health Insurance operate that way. One needs to pay the deductible and let NHI pay their part. At this time they pay the insured what they feel is correct and that is wrong.
  • Wendy (25/06/2016, 18:33) Like (1) Dislike (9) Reply
    Wouldn't these anticipated possibilities of pitfalls apply to all health schemes?
    Matter of fact ,any busines ,startup or otherwise would have anticipated risks.
    Knowing what the risks are is a tool for damage control, in my opinion.

    However, the "chronic non_communicable disease "factor is the one to watch. This one is in the hands of each and every person. The VIP constituents are so pro NDP failure,they make them up..So badminded,they will be eating lard and pounds of sugar at one sitting to ensure they become diabetic with clogged veins from head to toe.

    Hmm, , then there would be fewer vipers,but heck,every cloud have a silver lining.
  • big question (25/06/2016, 18:52) Like (15) Dislike (0) Reply
    While people are waiting for the uncertainties of NHI to play itself out, we need to focus on fixing our domestic crime situation, so that people can invest at home to create income and employment for all B V Islanders who will be affected, particularly on the job lost front.
  • i from here (25/06/2016, 18:57) Like (7) Dislike (1) Reply
    Let's be honest. The NHI thing is a business just like any other
  • bigger risk (25/06/2016, 19:12) Like (11) Dislike (2) Reply
    A bigger risk to the economy and totally unsustainable is this nonsense of paying government employees a pension while they are in their 40' and 50's - total nonsense and will only lead to bankruptcy of the country - but who has the balls to bring that up as a debate?
    • ndp (25/06/2016, 20:48) Like (6) Dislike (1) Reply
      The biggest risk is the thiefing and no one going to jail
    • civil servant (25/06/2016, 21:38) Like (7) Dislike (1) Reply
      if i put in 25 or 30 something years don't i deserve something to live on when i retire
  • facts man (25/06/2016, 19:22) Like (17) Dislike (0) Reply
    I still maintain noth nhi & ndp must go
  • Our own peolpe n their greed failing us (25/06/2016, 19:36) Like (18) Dislike (0) Reply
    These Leaders, lord have mercy on us, they are not listening to the people.. How many times I read on blogs that since NHI doctor visits went bloom sky high..I myself had that experience, when I was with Naguco my doctor visit was $90.00 insurance will pay 80% of that. Then with the introduction of NHI It went to NHI it went to $176.00 I kept all my receipts.. Its crazy. How could it be.. Its our own people our politicians and their greed are failing us. Such a shame..
  • SMH (25/06/2016, 21:36) Like (13) Dislike (0) Reply
    this is what happens when you rush things through without proper planning, the pier park is also an example of a rush job gone wrong
  • watching (25/06/2016, 21:40) Like (11) Dislike (0) Reply
    Just more ignorance . Complete amateurs. Just like Obamacare is killing the people in the US . Socialism does not work long term ... see E urope.
    • SIDELINE (26/06/2016, 08:59) Like (6) Dislike (1) Reply
      Socialism does not work among greedy people who lack values and a sense of community spirit.
  • Capt. Obvious (25/06/2016, 22:55) Like (14) Dislike (0) Reply
    "Bad economy could kill NHI" and an infinite list of other things. Next time just ask me to do an actuarial review on NHI. I'll do it for cheaper and throw in a long list of other obvious risks. Let's see......tsunami, a comet, brexit, Armageddon....yup they all might do NHI in.... lol!
  • voiceofthevoiceless (26/06/2016, 00:28) Like (28) Dislike (0) Reply
    "The actuarial report said, “There is a risk that if the BVIHSA can’t compete effectively with the private sector or does not hold the confidence of the NHI participants, more care will be sought in the private sector than at the BVIHSA, which in turn may necessitate a reorganisation of the BVIHSA...”

    When there was no NHI, the majority of people still chose to visit a private health care provider rather than go to the Hospital. Peebles Hospital cannot compete with the private health care providers who are well financed and therefore are expertly staffed and well equipped. So should the priority not have been to get Peebles up to an acceptable standard so that it can be a viable alternative to the private health providers? With the implementation of the NHI more people who did not have insurance before are now frequenting the private providers leading to ballooning health care costs which would put the NHI's sustainability at risk.

    'If the Social Security Board who runs the NHI scheme does not have the capacity e.g., technical, financial, administrative skills, and cannot function to deliver a positive experience for all stakeholders, then the confidence in the NHI will not be maintained'.

    They do not have the capacity now and neither do they have the administrative skills to manage effectively the NHI. So why was this not sorted before the implementation?

    "In other words, a downturn in the economy and a change on the employment rate could pose a risk to the NHI".

    Was any survey done before the implementation of the NHI to determine the employment rate in the BVI? I could tell you just by being a Manager I advertised for a position recently and got at least 60 applicants in 2 weeks. Why did we proceed without having a picture of the employment rate?

    "In addition, there is also the issue of the Disease Burden. The report stated that “the increasing incidence of Chronic Non-Communicable Diseases imposes higher costs and the prevention of down-stream cost related to untreated conditions is important.”

    That has been a problem for some time now and I see no decrease in the frequency of these conditions in the near future.

    Seemed to me that the NHI was rushed and not well thought out.
  • voice (26/06/2016, 03:12) Like (24) Dislike (3) Reply
    This NHI was pushed to benefit some doctors and not the electorates. The whole thing is a greed factor. BV Slanders are not looked out for or protected by the politicians. They want to give everyone who comes to these islands status just to get votes. They care nothing about the people who toiled and build this country. The NHI is a scam to make some rich and poor people die. Check out the make up so the BVIHA. It is all a friend and party game. How many of our people are working in the hospital? Which country sets up a NHI to include those who are not nationals of the country? It is time for this government be accountable to the people of these islands. We put them in power. We are outnumbered. They talk global all the time. Watch the game.England leaving the EU is just the beginning. More to come. We will be poorer than our fore parents when this set in power is finished with us and they will be living in luxury with first class health care of which they are now depriving our people.
  • Papalin (26/06/2016, 08:01) Like (16) Dislike (0) Reply
    These mother f****** screw all of us now with them s*** make us drop our good health insurance and look now we can't even go back now to them cause they don't cover preexisting bun them
  • Back to the Drawing board. (26/06/2016, 09:52) Like (8) Dislike (0) Reply
    Be brave Minister. Go back to the Drawing board shake up you health board. Reduce the cost of doctors visits. Add more English speaking countries to the health service list. Now we can see the mistakes. Be courageous.. Step up...
    • voiceofthevoiceless (26/06/2016, 13:43) Like (13) Dislike (0) Reply
      "Be brave Minister. Go back to the Drawing board shake up you health board. Reduce the cost of doctors visits. Add more English speaking countries to the health service list. Now we can see the mistakes".

      If you are going to go back to the drawing board in an attempt to reduce costs and allow for a more diversified choice when it comes to health care practitioners then you have to literally go back to the drawing board. Adjust the mandate to allow persons to get their own private insurance for their families and that will at least bring down health care costs for those who remain with the NHI. It is no secret that the private insurers are better negotiators (motivation is profit) and will be able to keep costs down. You can charge a health tax for those who opt to go private. For those who have pre-existing conditions and who want to return to a private insurer then it must be made legally mandatory that private insurers cover those with pre-existing conditions.

      I have not seen the entire report and the media has only leaked some excerpts but it would be interesting to know what population size and the employment percentage they used to arrive at their figures. If they used 30,000 and 40,000 signed up and add to that the percentages are 30%-40% employed to pay for 60- 70% unemployed we in trouble. We need to know the true numbers and percentages to have a proper picture of the NHI's standing.
  • bad boyz (26/06/2016, 11:08) Like (0) Dislike (8) Reply
    I LOVE MY NHI I DO NOT CARE WHAT A MAN SAY
    • Vision (26/06/2016, 13:01) Like (8) Dislike (0) Reply
      you must like it ,for you is one help created this thiefing scheam .
  • jj (26/06/2016, 11:32) Like (7) Dislike (0) Reply
    Got to pay mandi tory a health insurance I am not interested in . A health insurance that is forced on me with little benefits a cost to me and a deduction from my salary of over 200 monthly. I am now forced to purchase a secondary health insurance to ensure that my family is OK. In the event emergency strikes. A cost altogether of 800 plus dollars. Decision made so that NHI will not have to make decision on whether I or my family should go away for treatment in the event of an emergency. COLUMBIA. AND PANAMA..Not any place I want to go for treatment. GOD help us
  • VG (26/06/2016, 14:14) Like (6) Dislike (0) Reply
    The NHI was told it would not work and they will only break even the first year. If Bupa who insured the government only did not make a profit how will NHI survived. They under estimate the obese,sick diabetic heart and cancer pateint exist in the small population.
  • Another issue (26/06/2016, 14:16) Like (7) Dislike (0) Reply
    What about investigating the doctors, clinics and private facilities that have raised their rates to unfair amounts. While NHI touts 10% copay's if the provider charges more than NHI will reimburse the difference falls on the patient to cover over and above their copay amount. So not only are they taking advantage of NHI they are taking advantage of their patients. NHI needs to make sure that their reimbursement schemes are fair and then government needs to investigate these providers and fine them since they agreed to participate in NHI they need to accept the payment and not ask the patient to cover the difference due to their greed
  • True (26/06/2016, 22:38) Like (21) Dislike (0) Reply
    The NHI needs to be removed from under the minister and the present director. They are scheming how to use and waste taxpayers pension for their own benefit. Stop troubling the people's tax monies. Theis plans must be fully investigated. Leave the people money alone. Social Security monies must be there for the people when they retire.
  • no kidding (27/06/2016, 04:05) Like (15) Dislike (0) Reply
    Two things about the government. They do not risk assess things before implementation and they only thinking short term i.e. how to break even or make a quick buck. They hired a consultant to tell them what the people been telling them all along...if this isnt enough for them to start listening then nothing is...


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