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Minister Lee: “Investing in existing facility makes no sense”

St. Maarten News: – It does not make sense to invest further in the St. Maarten Medical Center’s current facility, Minister Emil Lee (Public Health, Social Development and Labor) said yesterday morning during the continuation of a parliament meeting about a national ordinance that contains regulations related to public health.

The minister showed that the losses at the hospital are steadily increasing. Expanding the hospital without addressing its business model would result in more transactions and more losses. Between 2012 and 2015, the accumulated losses amount to 27.2 million guilders. In 2015, the losses were five times as high as they were in 2012.

“The current tariff structure is outdated. The costs for treatment are higher than the income the hospital received for it. Without addressing that issue even a new hospital does not make sense.”

The ministry wants to bring about in the short term a temporary increase of the tariffs. For the long term, the minister wants to review the tariff structure, keeping in mind the viability of social insurance agency SZV, while making sure that these costs are not passed on to patients.

Minister Lee said that there are no concrete architectural drawings for a new hospital at this moment, there are only ideas. One of those ideas is to build a new wing first, while keeping the existing facility operational, and to add a wing for medical tourism later.

There are several issues with these ideas, the minister said. First of all, the medical tourism wing would require an investment of $30 to $35 million, but currently the hospital does not have a private sector medical tourism partner. “This would mean that the SZV and the government would finance the medical tourism section of the hospital. That does not make sense.”

The next question is obviously whether medical tourism as such makes sense for St. Maarten. Let’s says that 80 percent of necessary medical services can be provide in a financially viable manner, that there is 10 percent we could never afford in a small community and that another 10 percent are serviced we would like to have but we do not have the population size to support it, Lee said, emphasizing that these numbers are just a basis for further discussion.

“Then we would have to bring in those remaining services. There could be conflicts with a private sector medical tourism partner, because their objective is first and foremost financial. Whatever we do has to be in the best interest of the country.”

Minister Lee told parliament that SZV had sent a letter to the ministry on October 19 about a proposal for a new hospital. The cabinet of the ministry of public health issued an advice three days later and the same day the proposal went to the Council of Ministers. On October 28 the ministry – at that time the responsibility of Rafael Boasman – sent a letter back to SZV.

Lee took office on November 19. “On December 15 I sent a letter to SZV instructing them not to make any binding decisions. For clarity’s sake: I have no issues with the Austrian company Vamed. The issue I have is that the letter from the ministry gave SZV broad authority without an open bidding process. It is clear that the current hospital facility is lacking and continued investments in the facility are not in the best interest of the country. A $105 million plan for a new hospital isn’t either. Where do we find the sweet spot? Somewhere in between those two positions.”

Adjusting the tariff structure will stop the financial bleeding at the hospital. SZV is looking at ways to improve efficiency and to enforce payments where they are due.

Minister Lee said that there is a lack of quality data and that this hampers the decision making process. “We are in the process of collecting better to make sure that the design of a new hospital is in the best interest of the country.”

The aim is to reduce referrals for medical treatment abroad – that currently eats up around 30 million guilders a year – by increasing the services at the hospital.

“The hospital’s cash flow is difficult,” the minister said. “Sometimes they are slow in paying providers; they have to choose which bills to pay. The hospital therefore is not in a strong position to negotiate about prices. Sometimes you need money to save money. As the brand improves, revenue will increase as well.”

Minister Lee said that there are no terms of reference yet for a turnkey developer. “We are working on them and then we will go to an open tender process,” he said.

The ministry furthermore puts a strong emphasis on prevention and on maximizing the use of its resources. One survey among 191 employees of three local entities showed that 30.9 percent had elevated levels of cholesterol versus 12.9 percent in the USA and 23.2 percent in the Netherlands. An alarming 51.1 percent was qualified as obese –far outpaces the average for even the United States (35.1) and the Netherlands (11.8). “This gives us an indication about the health issues of our population,” the minister said.

The ministry owns a public health bus that was once bought for 720,000 guilders, and a dental Youth Bus with a price tag of 360,000 guilders. “The Public Health Bus went out once per month for one day, and the Dental Youth Bus we found in the bushes, unused. We want to mobilize these assets and get the bus out at least twice a week. The government pays for the healthcare of its civil servants, so it should make use of this; there is a huge incentive to maintain the health of our civil servants.”

For the long term, Minister Lee envisions restructuring the tariffs for SZV-insured treatment, reviewing the SZV-premiums and an assessment of the population’s needs for medical services. Lastly, he intends to rebrand the St. Maarten Medical Center and designate it as the country’s national hospital.