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Election Issues 17 Will voters pay for better health system? (edited version in The Fiji Times, 28 June 2014)


Election Issues 17:   Will voters pay for better health system?
Professor Wadan Narsey
(edited version appeared in The Fiji Times, 28 June 2014)

The most important issues for voters, according to the opinion polls, are jobs, cost of living, education and health, in that order.

But given that people will pay whatever they can to save the lives of their loves ones, health is probably even more important than education.

Yet health has not received as much funding, and from all governments,  as education.

And it shows.

Dilapidated public health system

There is general consensus that Fiji’s public health system, despite eight years of the Bainimarama Government,  is in a very poor state, which even our current political leaders and senior civil servants, are reluctant to use.

One only has to go to the Colonial War Memorial Hospital to see the terribly dilapidated state of the wards with paint peeling, with floor tiles lifting off, the over-crowding, the general shortages of beds, medicines and health equipment.

There is a shortage of qualified experienced doctors and nurses, with long shifts being the order of the day.

The Health Centers, which the MoH has tried to emphasize in a bid to reduce the demand on the main hospitals, also periodically suffer shortages of doctors, nurses, and medicines.

The low salaries of doctors and nurses have also encouraged our health professionals to emigrate to greener pastures.

 Basic fact:  our public health system needs more money.

Governments have always said: we are already giving enough and we just do not have any more.

Is that true?  I come to that later.

But the rich do have the money, and sadly for them as well, the private hospitals sometimes fail them.

The rickety private hospitals

Fiji’s richer people resort to the services of private hospitals, often paid for by private health insurance.

But their complaints are also mounting.

As profit organizations, private hospitals have to necessarily charge for every little service they provide, and their bills can become astronomical.

The private hospitals often do not have their own specialists on site or even on call, so must use CWM specialists, who often end up doing second shifts, sometimes with poorer quality of service.

The small scale of private hospitals means they cannot attend to multiple emergencies, and inevitably some patients suffer needlessly, and a few may even die, as also happens at our under-funded public hospital and health centers.

Private hospitals cannot stay open all night long and there are sad stories of emergency patients being turned away and told to go the CWM.   Again a few may die on the way while the logistics of transfers  are laboriously worked out.

Some doctors are even advising their emergency patients to go to the CWM first.

Clearly, the private hospitals cannot be the answer to the health needs of the bulk of Fiji’s population, most of whom simply cannot afford that generally higher quality of service which comes at a stiff price.

Clearly, the public health system must receive more funds.

But where will the money come from?

A mix of approaches is called for.

Must have private fees

The members of the public have always rebelled at the idea of paying fees on some kind of a subsidized a user pays basis.

But the current public health fees are ridiculously low, not even covering the cost of the food and linen, which the patients would have had to cover at home anyway: why should tax-payers pay for these costs when some one becomes sick?

Why should tax-payers not pay for some of the costs of medicines?  After all, they pay willingly for their consumption of cigarettes, alcohol, kava,  fatty chops and sugary fizzy drinks, all of which make their health worse, requiring the use of other tax payers’ funds?

Consumer pay for barbers, tailors and beauticians, engineers, architects, so why not for doctors and nurses?

With better revenues generated on a user pays principle, where the patients can afford to pay, the public hospitals would be able to provide a much better quality of services which the poor who do not have the means, could enjoy as well.

But, do political parties and candidates have the courage to tell the voters that they must not expect total hand-outs, and should pay for part of their medical costs if they have the means to pay?

Paying for Health Insurance: a part of VAT

Taxpayers can argue, with some validity, that the taxes that they pay to Government, ARE partly their health insurance premiums.

But government also has to pay for other essential public goods and not just health.

Tax-payers can argue that government can reduce their excessive allocations for totally non-productive expenditures such as the military, which many countries without any external enemies, easily do without.

Taxpayers can argue that Government should reduce their excessive allocations to large infrastructure projects, where they are being used inefficiently.

A few might argue that income tax could be increased by a small percentage, to fund the National Health Insurance Scheme.  But that tax falls on only some of the people in Fiji, not all.

The tax which virtually everyone pays is the Value Added Tax, currently at 15%.

Perhaps 3 percentage points (or one fifth of current revenues) could be “ear-marked” to the Ministry of Health as funds for a National Health Insurance Scheme, over and above their normal core expenditures such as salaries and wages.

The great benefit of this mechanism would be that VAT  rises automatically and very buoyantly as the economy grows, even when the economy may not be doing too well.

BUT WAIT:  that VAT revenue is already being used for other public purposes: how will that lost VAT revenue be replaced by government?

This of course, was media challenge ingenuously posed by Mr Khaiyum to Professor Biman Prasad, leader of the National Federation Party.

Professor Prasad argued that future economic growth would eventually replace the lost revenues (which it would, but only in the long run).

But two years ago the Bainimarama Government had quite unnecessarily reduced the corporate tax from 30% to 20% and also reduced income tax at the higher end from 30% to 20% thereby losing government more than $180 millions, while increasing the VAT from 12% to 15%.  This made the rich richer and the poor poorer, thereby eroding social justice in Fiji.

This was very conveniently forgotten by Mr Khaiyum at the recent launching of the Exporter of the Year Award Scheme,  when he attacked Professor Biman Prasad for sensibly proposing a VAT reduction to ease the cost of living for the poor.  It would seem that Mr Khaiyum, Minister for Elections etc,  is quite comfortable with using his official position in government to campaign for votes from the corporate sector and the rich, while attacking other parties’ candidates.

Health funds will are never enough

Every year, the media highlights sad cases where some seriously ill patient desperately needs overseas treatment, but cannot get it, and they die.

No doubt the National Health Insurance Scheme will be able to cover some of these cases and costs but not all,  as I pointed out in a Fiji Times article twelve years ago (“Who is to live and who is to die: the case of Jerry, Suka and Priya” The Fiji Times, 27 June 2001) also available on my blogsite, NarseyOnFiji.

This article also has a full elaboration of the moral dilemma involved for Health officials in making decisions over such issues, as well as suggesting other possible sources of funding for public services like health (including the avoidance of coups).

Basically, using the $50,000 or so for a well-publicized overseas treatment for one person must mean that the rest of the MoH must spend less on doctors, nurses, medicines, transport, equipment, with the result that far more people will die quietly out of sight of the media.

It is also unfortunate that other initiatives such as the Fiji National University Teaching Hospital together with providers from India, have taken far too long to get off the ground, for all kinds of avoidable and shocking reasons.

Three policies for political parties and candidates to consider:

(a) allocate a part of VAT (2% to 3%) for a National Health Insurance Scheme

(b) help pay for it by returning the corporate tax and highest marginal tax back to 30% it was before, thereby also improving the equity and social justice in our tax system.

(c) institute a “partial user pays system” where patients pay for part of the costs of their treatments, where they can afford to, with those who cannot and who pass a means test, being covered by tax-payers through the National Health Insurance Scheme.



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