REPORT

Monday, November 22nd, 2010

Fairmont Hamilton Princess, Bermuda

The Health Financing Summit 2010 Report

Contact Us:
If you would like more information on the Health Financing Summit 2010, we would be happy to hear from you.

Mailing Address:

PO Box HM 2160, Hamilton HM JX, Bermuda

Street Address:

Sofia House, 2nd Floor 48 Church Street Hamilton HM 12, Bermuda Phone: (441) 295-9210 Fax: (441) 295-9213 Email: hip@gov.bm Website: www.hip.gov.bm or www.hfs2010.gov.bm

Published by:

Ministry of Health, Health Insurance Department (November 2011)

Table of Contents
Message from the Minister ..........................................................................................................4 Executive Summary .....................................................................................................................5 Introduction & Summit Purpose...................................................................................................7 Healthcare Debate ......................................................................................................................6 Presentation Summaries & Speaker Profiles .................................................................................8 1: KEMH Redevelopment Project and Financial Implications, David Hill .......................................... 9 2: Health System Performance Bermuda vs. OECD, Dr. Jennifer Attride-Stirling......................... 10 3: Update on Oughton/Andersen Healthcare Reports, John W. Cann, MD .................................... 12 Keynote Address: Smarter Healthcare, Dr. Paul Grundy ................................................................. 13 4: Modernization of the Health Insurance Department, Kathleen Young, Linda Wilkin, Collin J. Anderson..................................................................................................................................... 15 5: Analytical View of Bermudas Health Financing System, Howard Cimring, Al Kiel ..................... 18 Panel Discussion: Bermuda Healthcare for the Future-Enhancements & Sustainability, Dr. Stanley Lalta, The Hon. Gerald D.E. Simons, OBE.................................................................................... 20 Banquet Keynote Address: Lessons Learned from the US Healthcare System Implications for Bermudas Future, Kevin E. Lofton ............................................................................................. 21 VI. Ministerial Statements & Profiles.............................................................................................. 24 Welcome Remarks by the Premier and Minister of Finance, the Hon. Paula A. Cox, JP, MP ......... 24 Closing Remarks by the Minister of Health, The Hon. Zane De Silva, JP, MP.................................. 26 VII. Banquet ................................................................................................................................... 28 Selected Milestones in Social Health Insurance .............................................................................. 28 Pioneers in Social Health Insurance ................................................................................................ 29 VIII. Next Steps............................................................................................................................... 30 XI. Conclusions ............................................................................................................................. 31 X. Appendix ................................................................................................................................. 32 i. Feedback Summary & Comments............................................................................................... 32 ii. Press Coverage ............................................................................................................................ 34 iii. Sponsors...................................................................................................................................... 35 I. II. III. IV. V.

I.

Message from the Minister

The Health Financing Summit held on November 22nd, 2010 was a resounding success. It was a fitting follow-up to the Health Summit of 2005. 2010 marks fourteen years since the publishing of the Bermuda Healthcare Review 1996, also known as the Oughton Report, which was the seminal publication that recommended the formation of the Bermuda Health Council. The Bermuda Health Council became operational within the last four years and is producing industry-wide statistics and detailed recommendations to address some of the systemic issues being faced today. This year also marks four decades of social health insurance in this country after the passage of the Health Insurance Act 1970. The 40th Anniversary Banquet celebrated the milestones and pioneers who have contributed over that time period. Within this context, the Summit not only reviewed our successes and challenges, but also looked forward to envision the future direction for the healthcare system. The sessions were designed to engage all stakeholders in Bermudas healthcare system and to draw the public into the debate about the changes needed to improve our system. It is difficult to discuss solutions without all stakeholders having a common view of the problem. The Summit went a long way in ensuring we have a common problem definition. At a time when many governments are looking at austerity measures and at making hard decisions about health financing, Bermuda is already focusing attention on the twin issues of affordability and sustainability. Bermudas healthcare system has both quality and access to basic services for the majority of our population. Our health indicators are among the best in the world, however, we must recognize the future financing challenge before us and continued to engage in dialogue.

Yours sincerely, Hon. Zane DeSilva JP, MP Minister of Health

II.

Executive Summary
The Health Financing Summit 2010 engaged the health insurance industry in a vital dialogue about addressing the issue of rising healthcare costs. Its primary success was in gathering the leaders of industry and ensuring the awareness of baseline healthcare statistics and issues. It was not possible to reach agreement on detailed implementation plans and approaches to reducing cost within the limited one day format, however, the Summit provided a platform for us to start the process. Bermudas health system performs well as compared to baseline information from the healthcare systems among members of the Organization for Economic Cooperation and Development (OECD). Bermuda has a wealth of studies and strategic analyses of its healthcare system and what is required to improve it, however, over the last few decades implementation of the recommendations has not always been effective. The Bermuda Hospitals Board provides a significant portion of the healthcare delivery in Bermuda and proportionately contributes to the cost. The Hospitals redevelopment is vital to continued improvements in the quality of acute care delivered in Bermuda, but the Hospital is also incorporating elements of wellness and prevention into its services. The Bermuda Hospitals Board anticipates an additional one percent of the Hospitals revenues is required to provide the long-term financing for the Public-PrivatePartnership. Bermudas healthcare system is based primarily on fee-for-service payments and the significant reliance upon specialized care. The absence of an enhanced primary care model that delivers more comprehensive, timely, coordinated, and personalized care at lower cost, is one of the deficiencies in the systems current design. Opportunities exist through improved technology, communications, critical pathways for excellence and contracting to re-engineer the reward system for medical providers are all approaches that will make healthcare smarter. From an actuarial perspective Bermudas system could be improved by expanding the risk pool to allow for more vulnerable segments of the population to be subsidized by the more healthy segments of the population. The current healthcare spend across the system has grown at 7.3% per annum over the past five years and will reach $1 billion by 2017 if this trend continues. Sustainability of the system is, therefore, a major issue from a fiscal, economic, social, political, and wellness perspective. The question to be answered is, how will the economy support increased healthcare expenditure in the future? By examining the recent reforms in the United States healthcare system it is clear that Bermuda is in a comparatively positive situation. Some of the excesses and abuses in the United States do not appear here in Bermuda. There is room for optimism as the scope of the problem in Bermuda is solvable if a collaborative approach is taken. The management of administrative expenses, the greater utilization of improved technology to produce better data, reduce duplication of efforts, improve turnaround times and reduce errors is a challenge that all stakeholders must confront. Government along with the private sector has invested heavily in recent years to bring about improved efficiencies. New partnerships and approaches along with careful project management is required to ensure the success of projects aimed at modernizing systems, processes, and human resources. An industry-wide approach must be undertaken to address the multi-faceted and complex problems of misalignment of

incentives, unnecessary care, poor lifestyle choices, gaps in financing, reliance on expensive overseas care, and inefficient processes. All stakeholders will be asked to make their contributions and compromise for the betterment of the system. Some of the key themes discussed during the Summit include utilization, demographics, and new technology, as drivers of rising healthcare costs. The redesign of benefit packages to include more wellness and prevention can lead to improvements. The use of greater communication and technology, can improve decision making, clinical outcomes, and reduce costs. Overseas treatment must be reviewed and all improvements to the system should be tied to a long term National Health Plan that allows for prioritization and an orderly approach to system improvements.

III.

Introduction & Summit Purpose

Recently, Bermuda's employers, workers, unions and retirees have focused their attention on the joint issues of affordability and sustainability of the healthcare system in Bermuda. Why healthcare are costs increasing so quickly compared to inflation? What are driving these costs? The objectives of the Health Financing Summit 2010 were three-fold, to: engage industry stakeholders in discussion about rising healthcare costs and possible solutions; inform the public of the drivers of healthcare increases and how they can help change this; and celebrate the 40th anniversary of social health insurance in Bermuda.

IV.

Healthcare Debate
The Healthcare Debates aim was to educate Bermudas youth and future leaders. The search for these talented youths began with a Casting Call on September 18th, which resulted in twelve finalists. In the following weeks, these finalists participated in debate coaching sessions lead by Dynamic Debaters & Learners coach, Mr. Gladstone Thompson, culminating in a Debate Tournament on November 5th and 6th 2010 to select the six winners. We are happy to present our student debaters:

Name: Keishaun Augustus, 17 School: Berkeley Institute, Grade 12

Name: Akeila Richardson, 16 School: CedarBridge Academy, Grade S3

Name: Miles Cave, 14 School: Saltus Academy, Grade 11

Name: Eron Hill, 14 School: Bermuda Institute, Grade 10

Name: Glenn Simmons, 15 School: Berkeley Institute, Grade S2

Name: Michael Cabot, 17 School: Warwick Academy, Grade 12

V.

Presentation Summaries & Speaker Profiles

Session 1: KEMH Redevelopment Project and Financial Implications

The Bermuda Hospitals Boards is a large, complex, 24/7 acute care hospital with multiple specialties and services. The BHB has 1,700 staff, 232 beds, and is undergoing a modernization project. The Johns Hopkins Report estimates $55m in upgrade costs for the renovation project to be paid for from BHBs capital investments programme. For the new build, the report estimates $260m in construction cost and BHB seeks a private partner to pay for and construct the new building. Public-Private Partnership Delivery Model -BHB enters into an agreement with a private partner to design, build, finance and maintain a facility which meets the output specifications developed by BHB. BHB does not make any payment until construction of the building is complete (anticipated in early 2014). The private partner accepts responsibility for design, construction and maintenance of the new facility. BHB accepts responsibility for: a significant substantial completion payment (2014); annual service payments for the term of the contract; procuring and maintaining medical equipment. BHB has met every milestone: three bidders shortlisted; Request for Proposal released; preferred bidder and design selected. BHB has planned in advance for payments to our private partner beginning in 2014 and anticipates a contribution from Bermuda Hospitals Charitable Trust at substantial completion. Hospital fee increase of 1% above inflation annually for a five-year period (already agreed by Government for September 2010 and October 2011). This translates to less than a 3% increase in health insurance premiums by 2014. Once the building is complete, BHB will make a lump sum payment, as well as make annual service payments for the duration of the concession (30 years). The annual service payment covers the capital cost of the project, including design, construction and financing, as well as building maintenance and lifecycle costs. As a large employer, BHB understands the impact of increasing healthcare costs and premiums. More On-Island Services mean better access, lower cost. New Billing Methods can be benchmarked, and provide better data for planning

David Hill has been CEO of Bermuda Hospitals Board since November 2006. He has over 20 years experience in healthcare services. Before joining BHB, Mr. Hill was the Chief Executive of the James Paget Healthcare Trust, a 550-bed acute care hospital with a staff of 3,000. Mr. Hill worked at the James Paget Healthcare Trust for fifteen years. Prior to being appointed as Chief Executive in 1999, Mr. Hill was the Deputy Chief Executive from 1996 and the Director of Finance from 1991. Mr. Hill had previously worked in the Finance Department of the East Norfolk Health Authority and in other finance posts for local government. Mr. Hills

Speaker Profile David Hill

accomplishments prior to joining BHB include leading his hospital to a top UK ranking for clinical excellence and ensuring accreditation for all services. He oversaw a major transfer of local services, expanded acute hospital services and was involved in capital fundraising for his Trust, while delivering on key financial and service targets. A qualified accountant with the Chartered Institute of Public Finance and Accountancy, Mr. Hill has a BSc (Hons) in Mathematics from the University of Exeter.

Session 2: Health System Performance Bermuda vs. OECD

What is a health system? A health system is defined as all the activities whose primary purpose is to promote, restore, or maintain health (WHO 2000). The four functions of the WHO are stewardship, resource generation, service delivery, and financing. Organization for Economic Cooperation & Development (OECD) utilizes a conceptual framework for health system performance assessment. Health systems produce outcomes which contribute to the goals of health status, responsiveness, and financial risk protection. Why does it matter? Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services (Universal Declaration of Human Rights, Article(1)) The right is largely met in Bermuda; our role is to ensure that it is met even more equitably and sustainably. Healthcare is not a consumer good. It is a public good. How to assess performance? Assessing health system performance involves looking at the achievement of health system goals, measuring this achievement by level and distribution, and benchmarking against historical trends and against other countries. How does Bermuda perform? Per 1, 000 people, Bermuda has an average 1.9 physicians compared to OECDs 3.1, and 8.2 nurses against OECDs 9.6. Bermuda has 44 dentists, compared to OECDs 61 per 100,000 people. Bermuda ranks high with an average of 31.2 CT scanners compared to OECDs 22.8 per million. Bermuda is second only Japan with its 31.2 MRI units compared to OECDs 11 per million. With 3.5 acute care hospital beds per 1,000 population, Bermuda is almost on par with OECDS 3.8 average. Bermudas total health expenditure as a proportion of GDP is 8.5% compared to OECDs 8.9% Bermudas healthcare financing for 2008/09 totaled $557.8 million of which 28% is from the Public Sector, and 72% from the Private Sector. OECD average is 70% Public and 30% Private. Bermudas total health expenditure is broken down as follows: Bermuda Hospitals Board, 40%; Overseas care, 16%; Local physicians & dentists, 15%; Insurance

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administration, 8%; Ministry of Health, prescription drugs, and other providers & servicers each make up 7%. The occupancy rate of acute care hospital beds in Bermuda is 70% compared to OECDs 75%. The average length of stay for acute care in Bermuda is 8.4 days, whereas OECDs is 6.5 days. In Bermuda, the average length of stay for normal delivery is 2.3 days, compared to OECDs 3.2 days. The percentage of caesarian deliveries per 100 live births in Bermuda is 29.4 higher than OECDs 25.7 average. In Bermuda, the percentage of Influenza vaccination for people aged 65 and over is 76%. OECD average is 55.9. The percentage of women screened for cervical cancer in Bermuda is 80.2% compared to OECDs 64%. Bermudas life expectancy at birth is 79 years old, on par with OECDs 79.1 average. 24% of Bermudas adult population is obese, compared to OECDs 15.4%. Per 100,000 population, the diabetes lower extremity amputation rate for women in Bermuda is 46, and 48 for men. For OECD, the rate for women is 15, and 8 for men. The ischemic heart disease mortality rate in Bermuda is 61 per 100,000 population, and 66 for OECD. The cancer mortality rate in Bermuda is 103 per 100,000 population, compared to 126 for OECD. Bermuda has the lowest percentage of adults (over 15 years of age) that smoke daily at 8%. OECD average is 23.6%. Bermudas road accidents mortality rate soars above OECD and other countries at 59 per 100,000 males (0 for women). OECD average is 14.9 for males, and 4.6 for women The percentage of adults reporting good health in Bermuda is 87.8% compared to 69.1% for OECD. Most OECD countries cover 100% of the population. In Bermuda, the total health expenditure as a share of household consumption is 17.8%, compared to OECDs 12.9%. Bermudas life expectancy at birth is 79 years old, and its health spending per capita is $7,885 = PPP US$4,959, which is a 8.5% health share of GDP. Put in context against other developed countries, Bermuda is a higher spender but overall level of wealth is still average (OECD 8.9% and 2,000 PPP US$). In summary, Bermuda has achieved its health status goal of a healthy population; however, it is still working its consistency within different groups. The level of coverage and who receives this coverage is a goal that Bermuda is struggling with. Overall, users and the public seem to be satisfied with their healthcare services, however, it is not known who is satisfied and who is not satisfied. Bermuda Health Council action The Bermuda Health Councils goals for 2009-2012 are: 1. Quality: To enhance the regulation of health services, insurers, professionals and prescription drugs, in order to assure quality and patient safety 2. Equity: To enhance coordination of health services to assure equitable access to essential healthcare for all residents.

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3. Efficacy: To promote healthcare developments in service provision and insurance that will enhance the financial sustainability of the healthcare system. 4. Accountability: To ensure all of our functions are conducted in an impartial manner

Dr. Attride-Stirling is the Chief Executive Officer of the Bermuda Health Council. Prior to joining BHeC she was the Health Promotion Coordinator at the Department of Health from 2004. Dr. Attride-Stirling has worked at the regulatory body for the National Health Service in England and Wales, and lectured at the London School of Economics, where she obtained her doctoral degree in 1998. Dr. Attride-Stirling has published articles on health regulation, health promotion, mental health and research methodology. Her work in Bermuda has led to the introduction of various national initiatives by the Department of Health.

Speaker Profile - Jennifer Attride-Stirling, Ph.D.

Session 3: Update on the Oughton/Andersen Healthcare Reports

The Healthcare Review The Health Care Review (The Oughton Report) addressed the concerns of rising healthcare costs and the quality of healthcare. The objective of the Health Care Review is to determine whether the healthcare system satisfies the needs of the population, is cost effective, is efficient, provides a minimum level of care accessible to all, and then make recommendations. The report focused on healthcare needs, quality of care, financing of healthcare, and healthcare costs, and concluded with 160 recommendations. Of these recommendations, 23% have been done, 26% have not been done, 48% have either been partially done or currently being done and the remaining 3% of the recommendations are no longer relevant. The Arthur Andersen Report The Arthur Andersen Report used the following criteria to assess the potential success of implementing many of the recommendations in the Health Care Review: feasibility of implementation; improvement in the quality and access to care; and maintenance or reduction of healthcare expenditures. The initiatives outlined in the report include: Promote the use of alternative and preventive care services, sites and personnel. Develop partner relationships and contracts with overseas providers. Implement disease management and prevention programmes. Evaluate and address physician-owned ancillary services and equipment. Develop a universal billing and coding format. Create a central data repository for all health care data. Develop alternative reimbursement methodologies for hospitals, physicians, and ancillary providers. Provide mentoring, technical expertise, and overall direction to the health care system. The implementation teams recommended in the report include: reimbursement; disease management and prevention; eldercare; and formulary.

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Challenges and Results Formulary this does not exist Eldercare the progress of these initiatives are at various stages 1. Standards The National Office of Seniors and the Ministry of Health have implemented the Seniors Abuse Register 2. Facilities - The seniors homes in Bermuda have been undergoing a longterm facilities upgrade. Disease Management - the progress of these initiatives are at various stages 1. Asthma the Ministry of Health has launched a comprehensive Asthma program in partnership with the Bermuda Hospitals Asthma Centre. 2. Cardiac The Bermuda Hospitals Board has introduced a Cardiac Care program over the past several years. 3. Diabetes The Ministry of Health has launched a Diabetes Passport program, which aims to increase awareness and prevent diabetes patients from allowing their conditions to get out of control. Reimbursement The Bermuda Hospitals Board has implemented a new in-patient billing methodology, however, reform is still needed among providers outside of the Hospital

Speaker Profile - John W. Cann, MD

Dr. John Cann is currently the islands Chief Medical Officer. Dr. Cann has been with Government since 1979 and served as a Medical Officer and the Senior Medical Officer before he was promoted to his current post. Dr. Cann is a long serving member of the Board of Governors of the Sandys Secondary Middle School. In addition, he sits on both the Bermuda Hospitals Board and the Health Insurance Committee. He is a graduate of the Howard University College of Medicine and the School of Public Health, the University of North Carolina at Chapel Hill.

Keynote Address: Smarter Healthcare

Factors affecting sustainability of healthcare systems Key forces influencing the sustainability of healthcare systems: Globalization and its impact on expectations for country healthcare systems, as healthcare shifts from local to regional and national to global settings The activation and engagement of consumers as they assume more financial responsibility for their healthcare and demand accountability The growth of aging and overweight populations that add to already overburdened health systems The growing incidence and cost of treating chronic disease and re-emerging infectious diseases New medical technologies and treatments that, while promising to revolutionize risk assessment, diagnosis and treatments, raise new questions (e.g., who will pay). Factors threatening to maintain the healthcare status quo: Worldwide, hospitals are facing profitability issues. Societal expectations/norms are being called into question (e.g., how much healthcare is a right).

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Incentives for financial, service quality and clinical outcomes arent aligned, especially in the United States. Government responsibilities to address tough challenges conflict with consumer reluctance to adopt healthy lifestyles. Across the ecosystem, processes, information and IT infrastructure are fragmented, suffering from the lack of robust, widely-accepted standards. Ecosystem constituents are attempting to balance new demands with the need to contain healthcare spending. Smarter Healthcare At the center of smarter healthcare is an increasingly more personalized experience, focused on the wellness of the individual. Health system members will need to work as an integrated team with individuals to deliver collaborative care at every point of interaction with the individual. A smarter health system forges partnerships in order to deliver better care, predict and prevent disease and empower individuals to make smarter choices. Bermuda spends $7,730 for every man, woman and child today and about twice that by 2016. This is even more than the $7,538 per person spent on health in the U.S., according to OECD data, and more than twice the $3,000 average for all OECD countries. The cause is due to the mostly unregulated fee-for-service payments and an over reliance on rescue/specialty care. Stark evidence that the U.S. healthcare industry and Bermudas has been failing us for years. Commonly cited causes for the nation's poor performance are not to blame it is the failure of the delivery system. Healthcare is a business issue, not a benefits issue Patient Centered Medical Home (PCMH) Patient Centered Medical Home (PCMH) is an enhanced primary-care model that delivers comprehensive and timely care to patients, emphasizing the central role of teamwork and engagement between caregivers and patients. Opportunities exist to incorporate aspects of PCMH into existing OEM physician practice. With PCMH, patients get superb access to care; patients have the option of being engaged partners in their care; clinical information systems support high-quality care, practice-based learning, and quality improvement; specialist care is coordinated and systems are in place to prevent errors that occur when multiple physicians are involved; integrated and coordinated team care depends on a free flow of communication among physicians, nurses, case managers and other health professionals; patients routinely provide feedback to doctors ; patients have accurate standardized information on physicians to help them choose a practice that will meet their needs. Current payment systems reward downstream cost, penalize quality, prevention, primary care and reward volume. Health costs can be reduced but needs to be moved upstream to reduce downstream cost. The PCMH model impacts stakeholders across the continuum of care. Payer: Improved member and employer satisfaction, lower costs, opportunity for new business models Hospital: Lower number of admissions and re-admissions for chronic disease patients; able to focus on procedures. Primary Care Provider: Increased focus on the patient and their health, greater access to health information; higher reimbursement; more PCPs.

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Patient: Better, safer, less costly, more convenient care and better overall health, productive long-term relationship with a PCP. Specialists: Better referrals, more integrated into whole patient care, better follow up less re-hospitalization. Government: Lower healthcare costs, healthier population. Employer: Lower healthcare costs, more productive workforce, improved employee satisfaction. Pharma: Improved communication platforms and relationships with healthcare providers, patients and payers; increased sales through improved patient identification, diagnosis, and treatment; recognized as a key player in the patient health delivery value chain.

Speaker Profile - Paul Grundy, MD, MPH, FACOEM, FACPM

Dr. Paul Grundy is IBM Corporation's Global Director for IBM Healthcare Transformation. In this role, he develops and executes strategies that support IBM's health care industry transformation initiatives. Part of his work is directed toward shifting health care delivery around the world toward consumer-focused, primary carebased systems through the adoption of new philosophies, primary care pilot programs, new incentives systems, and the information technology required to implement such change. He also serves as the president of the Patientcentered Primary Care Collaborative, and is an adjunct professor in the Department of Family and Preventive Medicine at the University of Utah. His work has been reported widely in the New York Times, BusinessWeek, The Economist, New England Journal of Medicine, and newspapers, radio, and television around the country. His numerous awards include three US Department of State Superior Honor Awards - one for handling the crisis surrounding the two attempted coups in Russia, one for work done in opening up all the new embassies after the fall of the Soviet Union, and one for work on the HIV/AIDS epidemic in Africa. He also won four Department of State Meritorious Service awards for outstanding performance in the Middle East and Africa.

Session 4: Modernization of the Health Insurance Department

The Health Insurance Departments Journey Prior to the initial implementation of the Automation Project, the Health Insurance Department was in chaos. Some of the challenges facing the Health Insurance Department were: An AS400 application existed that supported policy administration and billing for one customer segment. All the other work was processed using paper and Excel spreadsheets. If policies and procedures were documented, there were many different versions that individuals personally stored. Most of the policies and procedures resided with a few employees. Some claim types had not been processed for a number of years. Very few, if anyone knew the full end to end processing. The staffing levels were not sufficient to support the volume of work. In response to the chaos, HID developed short, medium, and long term initiatives along with the Automation Project.

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The initial scope of the Automation Project was claims management. It quickly became apparent that the required scope for automating the Health Insurance Department was larger. The Department needed a Health Plan Administration System. The Health Insurance Departments Current Functionality During the past two years, functionality has been rolled out in the areas of eligibility, claims, enhanced tools, and reporting. After a rigorous and competitive tender process, including local and foreign bidders, Apollo Health Street Inc. was selected as the preferred Business Partner. The Apollo Group is the largest healthcare-focused BPO/KPO Company in the US. They have 3,000 highly qualified professionals, and offer global delivery from 13 locations. They were ranked #1 Healthcare BPO by Black Book of Outsourcing, have an impressive roster of more than 170 global healthcare clients. Ebix, Inc. is a leading international supplier of software and e-commerce solutions to the insurance industry, ranging from carrier systems, agency systems and exchanges to custom software development for all entities involved in the insurance and financial industries. Benefits of the Automation Project: Reduced claim turnaround times, improving relationships with providers, policyholders and other stakeholders. Ability to operate more efficiently, resulting in more efficient use of resources. Ability to capture data throughout the processes resulting in information available, which will enable transparency and improved audit results. Reduced claim costs by standardizing processes and using the available information to manage claims more effectively. Improved customer service and reduced complaints. The solution allows HID to focus on value-added functions not previously performed in the past. The implementation of the Automation Project was completed on October 2010. HIDs re-organization is being implemented and includes three sections: Relationship Management, Claims, and Finance. Each group will be headed by a Manager who reports to the Director. Lessons Learned Requirements, Requirements, Requirements Strategy and policies not documented in sufficient detail prior to start Scope was not understood by Executive Sponsors Operations were unstable Operations and Project initiatives not split Significant back-log was handled simultaneously Ability to bring correct resources to the project quickly Project had visibility, resources & political will No substitute for a good process Project Governance established: Steering Committee; Weekly Project Status Meetings; Change Order Process. The Future of the Health Insurance Department Health Insurance Reform Standard Hospital Benefit Reform EDI with medical providers

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Transition Planning Relationship Management Electronic Medical Records Case Management 2.0

Kathleen Young is the IBM Project Manager currently working with the Health Insurance Departments Modernization Initiatives which includes the Health Insurance Automation Project. Kathy has over 25 years of experience within the insurance industry and has been with IBM for over 10 years as a Project Manager working within insurance, banking, and government agencies focusing on project management, strategy, process improvement and information technology. Kathy has assisted her clients in developing strategies and roadmaps to help them achieve their corporations vision and business objectives while becoming more efficient and effective in their business processes; information technology strategies to support their business strategies, and new business processes to assist them in acquiring new blocks of business either through the distribution of new products or the acquisition of new companies Prior to joining IBM, Kathy was at a major Canadian bank as Vice President, Underwriting and Policy Administration within their Insurance Operations. Kathy was responsible for the overall companys administration, including new business, underwriting, policy administration, reinsurance and life operations support. As a member of the banks Insurance executive team, Kathy provided strategic direction for the life insurance and property & casualty insurance operations.

Speaker Profile - Kathleen (Kathy) J. Young

Ms. Wilkin has been with Apollo for over 5 years. With almost 20 years in healthcare payer operations and management information systems, Linda has held several senior management positions in commercial payer and managed care organizations. She has significant experience with all segments of the payer sector including claims adjudication, claims repricing, medical/disease management, network management and HIPAA-compliant EDI. Prior to joining Apollo, she spent 6 years as an independent business management and technology consultant to insurance companies, MCOs, TPAs and PPOs.

Speaker Profile - Linda Wilkin

Collin J. Anderson is the Director of the Health Insurance Department within the Ministry of Health, which is the Department that delivers the governments health insurance products offered to the public, including FutureCare, HIP (the Health Insurance Plan), the Mutual Reinsurance Fund and the Government Subsidy Program. Mr. Anderson began his career in government in 2006 as the Assistant Director for Health Insurance for the Department of Social Insurance, within the Ministry of Finance. He was Project Manager for the Health Insurance Sections re-organization in 2008 and for the eradication of the Departments back-log of medical claims. He also was the Project Sponsor for the Sections Automation project and change management programs. Mr. Anderson has five years experience in underwriting and administration and has worked in the political risk insurance industry in London with ACE European Group Ltd. and at the Lloyds market. Prior to that Mr. Anderson worked in Washington, DC at the World Banks insurance arm, MIGA. Mr. Anderson is a graduate of the School of Risk Management and Actuarial Science at St. Johns University where he concentrated in Risk Management and Insurance.

Speaker Profile - Collin J. Anderson

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Session 5: Analytical View of Bermudas Health Financing System

The Need for Health Insurance From an individuals perspective the need for healthcare has the following questions: When will I need healthcare services? Why will I need healthcare services? How much will the services cost me? There is tremendous uncertainty in the answers to these questions. A small number of people can constitute a significant percentage of total cost. According to the Bermuda Hospitals Board in-patient admissions for 2010, 15% of admissions add up to 50% of the total cost and 3% of admissions constitute 25% of all costs. For an individual there is significant uncertainty as expenditure is unpredictable and erratic. A health related catastrophic event can lead to financial hardship and / or ruin. There is a need for a mechanism by which risks can be transferred and shared. Pooling of Risks and the Landscape in Bermuda Risk pools are created and costs are spread across the pool. Typically these risk pools can be financed through Insurance Schemes ( e.g. Private Insurance, the Health Insurance Plan, FutureCare), Employers (e.g. Approved Schemes such as the Government Employees Health Insurance Plan), and Government (e.g. the Age Subsidy, the Youth Subsidy). Residual costs are borne at the individual level. The Standard Hospital Benefit (SHB) is the minimum package of inpatient and outpatient benefits. It must be provided within each health plan and is compulsory for the employed or the self-employed. The Standard Premium Rate sets the maximum rate for the Standard Hospital Benefits. It is set with reference to the costs across the insured population. According to the Bermuda Health Councils National health Accounts Report 2010 the financing cost in 2009 for: Government Youth Subsidy was $10M; Government Aged Subsidy $61M; Insurance Plans, HIP, Approved Schemes and FutureCare $297M; and residual financing by individuals was $81M. Coping with Risk The Mutual Reinsurance Fund is a catastrophic fund which covers high claims under the SHB. It can be a mechanism to introduce benefits into the SHB where there is uncertainty and transfers funds to risk pools that carry additional risks. It is funded through a part of the Standard Premium Rate, and acts as a reinsurance facility. SHB procedures that are currently paid from the Mutual Reinsurance Fund are: Haemodialysis, Kidney Transplant (up to $30,000), Anti-rejection drugs, Long-term stay (in hospital), Home Health care. Paid Claims of $11.5m in 2009. High cost individuals are undesirable to insurers. Access is denied or exclusions are applied. Premium rates can be discouraging. The high cost is absorbed by Health Insurance Plan or FutureCare. Transfers from the Mutual Reinsurance Fund enable the ability to absorb additional risks. Sustainability Challenges - Statistics According to the National Health Accounts Report 2010, the total 2009 Bermuda Health System Financing was $557m or (9.2% of 2008 GDP), with an Expenditure Ratio of

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$8,661 per capita (growth of 7.3% per annum over 2004 2009). Costs will grow to $1 billion by 2017 if trends continue. Growth in Standard Premium Rate of 12.6% per annum (2004 2010) which has more than doubled over this time. Sustainability Challenges - Costs Escalating costs cause sustainability challenges due to: growth in demand for services (e.g. new technologies, new drugs, better educated patients); costs and insurance premiums increasing at rates in excess of price and wage inflation (could double every 5 - 6 years at current pace); and additional risks and costs are possible due to a pandemic (think back to SARS and H1N1). Sustainability Challenges - Demographics Compared to those of working age, a retiree is 2 - 3 times more likely to be admitted to hospital and the cost is 4 - 5 times as much. Changing demographics Bermuda has an ageing of the population. In 2000 there were 6.5 workers for every retiree. In 2030 there will be 2.8 workers for every retiree. Better healthcare results in longer lifespan. The average number of years spent in retirement could increase by 2 4 years. Sustainability Challenges - Financing Government subsidy costs are growing at a rapid rate. Demographic changes will accelerate these costs Can the economy support the expenditure? Healthcare could consume a greater share of GDP if costs grow faster than economic expansion. How will increasing costs be financed? How might healthcare commitments impact other programs? Financing of healthcare is tied to many system wide issues - what will the next 40 years look like?

Speaker Profile - Howard Cimring

Howard is a Partner in Morneau Sobecos Consulting Practice. He has twenty years of healthcare, pension, insurance and investment experience. Since joining Morneau Sobeco in 2002 he has been providing actuarial and consulting services to regulators, pension funds, and healthcare providers in North America, Bermuda and the Caribbean. Howard has been involved in all aspects of plan design and valuations for public sector and private sector clients. He provides actuarial valuations of post-employment health benefits to many hospitals in Ontario as well as for the Government of Bermuda. Howard also provides actuarial reviews for the Bermuda Health Council, the Bermuda Ministry of Health, the Bermuda Government Employees Health Insurance Plan, the Cayman Islands Health Insurance Commission, and the Cayman Islands Ministry of Health. Howard graduated with a Bachelor of Science from the University of Witwatersrand in South Africa. He is a fellow of the Canadian Institute of Actuaries, the Faculty of Actuaries, and also has a Chartered Financial Analyst designation.

Al is a Senior Partner and the National Practice Leader of the Morneau Sobecos Regulatory Practice. He has more than twenty-eight years of insurance and pension experience, and has been providing actuarial and consulting services to regulators and supervisors of insurance

Speaker Profile - Al Kiel

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companies, pension funds, social security schemes, and healthcare providers in North America, Central America, South America and the Caribbean since 1998. Al is the Lead Partner responsible for servicing government ministries and regulators in the Bahamas, Barbados, Belize, Bermuda, Cayman Islands, Jamaica, and Turks & Caicos. He has also provided assistance in regulatory training and development to several Eastern Caribbean jurisdictions including Antigua and Barbuda, Grenada, St. Lucia, and St. Vincent and the Grenadines. His international experience also includes providing regulatory assistance to the Brazilian pension supervisory agency.

Panel Discussion: Bermuda Healthcare for the Future Enhancements & Sustainability

The panel was comprised of David Hill, Dr. Jennifer Attride-Stirling, and the Hon. Gerald Simons, OBE, and moderated by Dr. Stanley Lalta, Each panelist provided their viewpoints on the following questions: What are the drivers of healthcare increases in Bermuda? What are the solutions that we can put in place to make the healthcare system more sustainable? What are the specific cost-containment measures we can implement that can significantly reduce healthcare costs in the next five years? What specifically can the hospital do to lessen the increases on healthcare costs? What are the strengths of Bermudas Healthcare financing system? What is your wish-list for a proposed roadmap for Bermuda? Where do you see the healthcare system going in the future?

Speaker Profile Dr. Stanley Lalta

Dr. Stanley Lalta is a Health Economist currently working as Consultant on development of national health insurance and chronic disease prescription drug financing plan in The Bahamas. He was previously Health Economist at the Ministry of Health in Jamaica. He is a graduate of the University of The West Indies, University of Cambridge, University of York and University of London. He has written several papers and consultant reports on health financing, national health insurance, evaluating health financing systems and health reform in the Caribbean.

Speaker Profile - The Hon. Gerald D. E. Simons, OBE

The Hon. Gerald Simons, OBE is president and chief executive officer of the Argus Group, the largest insurance company in Bermudas domestic market. Argus is the leading provider of pensions and group health insurance in Bermuda. Mr. Simons graduated from the University of Western Ontario in London, Canada with a degree in economics and then joined Argus. He has been employed by the Argus Group for his entire working life and worked in the pensions, group insurance and marketing areas before becoming the chief executive officer. Mr. Simons holds the professional designations FLMI (Fellow Life Management Institute) and ACS (Associate in Customer Service) from the Life Office Management Association and HIA (Health Insurance Associate) from the Health Insurance Association of America. He has specialized in pension planning and group insurance. Mr. Simons has been president of a number of organizations in Bermuda including the Bermuda Insurance Institute, the Health Insurance Association of Bermuda, the Bermuda National Trust and the Bermuda Employers Council. He is currently

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chairman of the trustees of the Duke of Edinburgh Award Foundation in Bermuda and director of the Bermuda Monetary Authority For over 13 years he served in the legislature of Bermuda and for more than seven years held the position of Minister of Education. In 1996 Mr. Simons was made an Officer of the Most Excellent Order of the British Empire for his service to the community.

Banquet Keynote Address: Lessons Learned from the US Healthcare System Implications for Bermudas Future

An Overview of the U.S. Health Dollar US healthcare spending outpaces other countries. Despite this disparity in spending over 60% of US adults are obese or overweight, and 8.3% have diabetes. Comparable figures in Bermuda are 64% and 14%. Combined, Medicaid and Medicare provide coverage to one-third of all Americans or 93 million. The number of uninsured Americans climbed for the last decade. In 2009, there were 50.6 million uninsured Americans, which represent 16.5% of all Americans (306 million). Americans with health insurance decreased by 2 million from 2008 to 2009. Not only has the number of uninsured increased, but Medicaid enrollment has increased nearly 6 million since the start of the recession in 2008. Health insurance costs dramatically outpace inflation. US healthcare spending per resident continues to climb, growing 5.2% since 2004. The World Health Organization ranks the US toward the bottom of the worlds health systems (37th). Bermuda Healthcare Expenditures Bermuda healthcare expenditures rose to 9.2% of GDP in 2009. With just over 64,000 residents, Bermuda is approximately the size of the market served by mercy Regional Medical Center in Durango, Colorado. Bermuda healthcare expenditures rise above $500 million in 2009. Bermuda spends $4,065 per capita in public health expenditures compared to just $245 per capita in the US. Bermuda healthcare spending rises to more than $8,000 per Capita, thats 7.6% annually since 2004 compared to 5.2% for the US. United States Patient Protection and Affordable Care Act The key provision of the US Patient Protection and Affordable Care Act include: insurance reforms, including administrative simplification provisions; a mandate for individuals to have insurance; employer responsibility to provide or contribute to health insurance; low-income subsidies to help individuals purchase insurance; an expansion of those eligible for Medicaid; and the creation of state-based health insurance exchanges. There are over 40 provisions to the new law. The new law expands coverage to 32 million people through a combination of public program and private-sector health insurance expansions. Provisions are made strengthen consumer protections and keeping insurers accountable. Americans remain divided on the Affordable Care Act. Midterm elections have changed control of Congress, and could lead to major revisions in the law. Democrats lost 60

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seats in the House, six in the Senate. At the state level, Republicans added eight governors, and now outnumber Democrats by a wide margin. Regardless of regulation, focus must be kept on key high level objectives of improving medical outcomes, increasing affordability, enhancing patient experience, and engaging stakeholders. Transitioning away from Fee for Service Although there are over a thousand references to pending regulatory definition, the law adopts several key delivery system reforms to better align provider incentives to improve care coordination and quality and reduce costs. These reforms include a value-based purchasing system for hospitals; voluntary pilot projects to test bundled Medicare payments; voluntary pilot programs where qualifying providers including hospitals can form Accountable Care Organizations and share in Medicare cost savings. There are demonstrations/pilots for medical homes, episodic bundling, care transitions, and chronic care management. All the delivery system reforms require that more financial risk is assigned to hospitals and providers. Patient Centered Medical Homes The Patient Centered Medical Home, requires a strong primary care model with primary care provider (PCP) led care delivery teams working at the top of their licenses. Early medical home pilots have demonstrated success in key areas such as improved quality, greater patient compliance and more effective use of healthcare services. Accountable Care Organizations Accountable Care Organizations (ACO) includes a primary care network and other types of healthcare providers, maybe even some providers who are involved in things that are not traditionally thought of as healthcare, such as wellness programs and population health management. Value-driven Payment Value-driven Payment establishes a program for adjusting hospital payment rates based on quality levels achieved in the preceding year. Metrics will be from the hospital quality reporting program. Pays higher-quality providers more and lower-quality providers less. Hospitals have received pay for reporting for the last several years, but this will be the first time CMS is paying for outcomes. It is a way for CMS to decrease excessive hospital readmissions, followed closely by hospital-acquired infections and other never events. Episode-based Bundled Payment Episode-based Bundled Payment is a Medicare pilot program to test a bundled payment for an episode of care that begins three days prior to a hospitalization and spans 30 days following discharge. Global Payment Global Payment pays participating providers a fixed monthly rate per beneficiary to manage services provided to beneficiaries. It transfers risk to providers who now have an incentive to manage costs and assumes highly integrated systems capable of bearing risk. Catholic Health Initiatives Quality Strategies Catholic Health Initiatives quality strategies are: implement evidence-based practices; create a Patient and Family Advisory Council; invest $1.3 billion over the next 5 years in Clinical IT infrastructure.

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Speaker Profile - Kevin E. Lofton

Kevin E. Lofton serves as President and Chief Executive Officer of Catholic Health Initiatives (CHI). Catholic Health Initiatives is the third largest Catholic Health Ministry in the United States, serving some 70 communities in 19 states, inclusive of 72 hospitals, revenues of $9 billion, and more than 65,000 associates. Prior to joining Catholic Health Initiatives, Mr. Lofton served as the Chief Executive Officer of the University of Alabama Hospital in Birmingham. In previous positions, Mr. Lofton served as the Chief Executive Officer of Howard University Hospital, Washington, D.C., and Chief Operating Officer at University Medical Center (now Shands Jacksonville), Florida. Mr. Lofton received a master of health administration degree from Georgia State University (GSU) in Atlanta and a Bachelor of Science degree in management from Boston University. He is widely recognized at the national level and serves in leadership capacities in many of the major healthcare organizations. Active with the American Hospital Association (AHA), he served as the 2007 Chairman of the Board of Directors. He currently serves as Chairman of an AHA Special Advisory Group designed to help Americas hospitals eliminate disparities of care for minority patients. He was a founding board member of the Institute for Diversity in Healthcare Management. Mr. Lofton is a Fellow and former Regent at Large in the American College of Healthcare Executives (ACHE). He served as President of the National Association of Health Services Executives (NAHSE), the nations largest Black health care executive organization. Mr. Lofton currently serves on the boards of Gilead Sciences, Inc. (a Fortune 500 biosciences company), the GSU J. Mack Robinson College of Business and the Morehouse School of Medicine, and is a member of the Executive Leadership Council. In recognition of his outstanding leadership, innovation, and management accomplishments, Mr. Lofton was ranked six times, in the 2002 and 2005 - 2010 Modern Healthcare Magazines 100 Most Powerful People in Healthcare lists, as well as the magazines bi-annual Top 25 Minority Health Care Executives (2006, 08, 10). He was also ranked in the 2007 Ebony Magazine 150 Most Influential Blacks in America. Mr. Lofton was raised in New York City. He is married to Maude Brown Lofton, M.D., a child development pediatrician. They have two adult children, Kevin Russell and Johanna.

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VI.

Ministerial Statements
Welcome Remarks by the Premier and Minister of Finance
Good Morning and Welcome All. A quality 21st Century healthcare package that is affordable; is a national priority! Your attendance today at this Health Financing Summit provides an ideal opportunity through dialogue, collaboration and discussion to find ways to enhance our model. Lets not squander it. I am so pleased to be here as part of a discussion that I sincerely believe is one of the most important issues facing our community. Too often though, much too much time on this particular topic is spent on the blame game needy patients; greedy doctors; and fat-cat insurance companies. Politicians also come in for a fair share of criticism. Our perceptions become the reality, while the truth may actually lie somewhere in the middle. And so today I challenge you, rather than choose blame; our charge is to determine what can be done to curb significant costs so that we introduce a viable healthcare system that can be maintained into the foreseeable future. Rather than choose blame, pose these questions instead, How do we help the elderly and chronically ill to live as full and rewarding a life as possible? How do we provide high-quality healthcare in a sustainable way when healthcare costs are spiraling out of control? These positions may appear to be incongruous but in essence all this means is that healthcare needs to change and fast. It needs to become more efficient and more cost effective. You, who are present today, are the equivalent of key constituencies that provide, deliver, fund and represent our community as the consumers and providers of healthcare services. I extend a warm and grateful welcome to all of you, as we all have a stake whether personal or professional in the future of healthcare in this country. We hope that you are prepared to discuss, deliberate, and to devise strategies with some tangible outputs, during the Break Out Sessions, that will prove invaluable in helping us to fulfill the vision of providing an affordable and sustainable healthcare system for our community. Good health and good healthcare services are two of the most basic requirements for human beings. However, with the spiraling cost of healthcare, critical decisions must be made on how we continue to offer affordable, adequate health services that meet the needs of our people. As Minister of Finance the ever-increasing cost associated with healthcare is one of my greatest challenges! Any time you seek to reform and change an existing way of doing things, it causes angst- to our clients- the wider community constituency and to ourselves as the providers and payers and even users of services. So I cannot guarantee that we will have an easy road in seeking to chart a new course. However I feel reassured given the caliber of brain power that is here with the attendees present both those from the private sector and those in the public sector. It is a formidable brain trust that Minister De Silva and I have at our disposal. We will make every effort not to waste your time or ours.

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This forum begins the national dialogue on these issues. Rising health costs are a dilemma, but let me add, higher taxes are not the solution. Bermudians have a limited tolerance for taxes. So the rising health costs are driving us to some painful choices cut vital programs, raise taxes or get serious about understanding and correcting the major flaws in our costly, inconsistent and inefficient system. We have opted to do the latter. The escalating cost of healthcare is a critical issue and while issues pertaining to rising crime and the plight of retailers often dominate the news, one of the most important issues and certainly one of the most challenging issues that I have a concern about is the whole issue of healthcare, its cost and its financial impact on our economy. Indeed, if such increases are allowed to go unchecked, what we will see as a result is a reduction in access to quality care by the people who need it the most, in particular, the elderly and impoverished. Healthcare inflation (including prescription drugs, non-prescription drugs and medical supplies) continue to outpace general inflation. Health inflation refers to the health and Personal care sector of the Consumer Price Index (CPI). Over the last couple of years, this has been approximately double the annual CPI average percentage rate. In August 2010, the health and personal care Index was at 8.7% whilst the overall rate of inflation was running at 2%. It is now imperative that we prepare for our long-term future by reviewing and strengthening our healthcare system and doing all we can to deflate its rising cost. As we work together to improve the system, we need the kind of vision that provides direction and leadership. We need to see the potential, and we need to understand where each of us can contribute to change. It may not be easy but I believe that together it is achievable. I encourage you to undertake this journey with the rigor it deserves, with the expectation of a result that provides usable and predictive information that transforms our healthcare system for the better. I am impressed by the distinguished roster of speakers from Bermuda and overseas who will facilitate discussions on these and other vital issues currently facing our community. Let me extend a very warm welcome to our overseas presenters and partners. My sincere thanks to all of you for taking time out from your busy schedules to be here with us today. I congratulate Mr. Collin Anderson, Industry Stakeholders and all of you whose commitment and hard work have made this Summit a reality. I trust that this will be an exercise in partnership and collaboration; in the sharing of knowledge, expertise, energy and imagination. I encourage you to focus not just on where we differ, but on where we agree. Lets create a way forward where everyone in our community, individuals, community health partners, Government and the private sector realizes an affordable, sustainable 21st Century healthcare system that works for all of us. As Premier, Minister of Finance and steward of the public purse, I look forward to a diagnosis that will serve to put the health system of this community in good order for many years to come! Thank you.

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Minister Profile - Premier, the Hon. Paula A. Cox, JP, MP

Paula Ann Cox, JP, MP, became Premier of Bermuda, on Thursday, 28 October 2010. She retains the Cabinet portfolio of Minister of Finance. She was first elected to Parliament in October, 1996. When elected, Ms. Cox was one of the youngest members of the House of Assembly. She held several Cabinet positions including: Minister of Labour, Home Affairs and Public Safety in November 1998; Minister of Education and Development in November 2001; Attorney General and Minister of Education in July 2003; Deputy Premier and Minister of Finance in October 2006; and Minister of Finance and Economic Development in December 2007. Ms. Cox served as Corporate Counsel at ACE Limited. She was previously Vice President and Senior Legal Counsel of Global Fund Services at the Bank of Bermuda Limited. Earlier in her career, Ms. Cox worked as a reporter at the Royal Gazette and was trained in journalism at the Thomson Foundation in Scotland. Ms. Cox was educated in Bermuda at the Berkeley Institute and later at Havegal Ladies College in Toronto. Her studies in business, management and political science began at the University of Western Ontario and culminated at McGill University where she gained a BA in Political Science. At the College of Law, Chancery Lane, London, she trained as a Solicitor. In Holland, she attended The Hague Academy of International Law, and at the University of Manchester, England, she earned a Post-Graduate Diploma in International Law. She was called to the Bermuda Bar in January 1992.

Closing Remarks by the Minister of Health

Good afternoon Cabinet colleagues, Members of Parliament, Government officials, Summit speakers, overseas guests, stakeholders in the healthcare industry, employers and members of the public. It is my pleasure to conclude this Summit with some brief remarks. First we have identified some of the pressing financial issues facing the healthcare system today through the various presentations. We have talked about: The Bermuda Hospitals Board redevelopment and its impact on costs The Bermuda Health Council and the analysis being done in comparing Bermuda with other jurisdictions The impact that modernization can have on the efficiency of the system The debate about how to curtail the rising healthcare costs and much more. Second, we have talked about possible solutions. But there is no silver bullet. There is no single approach that will allow us to cure all the ills in the system, or resolve all the long-standing dilemmas we face as a healthcare industry. There are many areas where a shared and collaborative approach will move us forward, for example: 1. We should re-visit the issues of the basic healthcare package offered to all persons in Bermuda. This was a Throne Speech promise that Government is serious about addressing, to ensure that every Bermudian has access to the right minimum package of benefits by law.

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2. We should look at improved regulation of health insurers and all the issues that this subject raises, including: pre-existing condition exclusions, the capital adequacy of insurers, reinsurance mechanisms, underwriting practices and all other issues involved in ensuring we: i) protect the public; ii) promote equity; and iii) promote cost efficiency. 3. We should tackle the issue of regulation of the health sector including the regulation of medical providers. 4. We should continue to strengthen the Bermuda Health Council and the mandate it has to provide statistical information and enhance coordination between stakeholders. Finally, we must leave here today committed to the challenge of continuing this dialogue and to implementing solutions: We must continue in earnest the dialogue started today. We must gather and share adequate data so that proper analysis is possible. We must remember to build upon the strengths of our system, while honestly examining the weaknesses. We must not rush to conclusions, but be realistic that solutions will require compromises from all stakeholders. We must develop and commit as an industry to a comprehensive National Health Strategy that will look at the three components of accessibility, quality and cost. We have a great deal of work ahead of us in continuing to develop our healthcare system for the betterment of all Bermudians. I look forward to your continued support as partners. Thank you.

Zane Joseph Stephen De Silva became Minister of Health on November 1st, 2010. He is the only Cabinet Minister and Progressive Labour Party Member of Parliament of Portuguese descent. Minister De Silva was elected as an MP representing constituency #30, Southampton East Central, in December, 2007, and was appointed as Minister Without Portfolio on November 12th, 2009. During his time as Minister Without Portfolio, he was involved with various Government projects including the modernization of the Municipalities. Minister De Silva is owner, President and Chief Executive Officer of Island Construction, one of Bermuda's most diversified local companies, where he has been employed since 1988. Minister De Silva started his career at The London Shop and went on to work at AIG and eventually SKB Coatings. During his earlier career, he also took on part time employment including stints at Henry VIII Pub & Restaurant, the Somerset Bridge Cycle Shop and as a painter. Minister De Silva has deep roots in the community. He throws his company's support behind youth, educational, sports and faithbased organizations. He has served on the Boards of a number of charitable and sporting organizations and is a Life Member at Watford Sports Club, Somerset Bridge Recreation Club, St. Davids Cricket Club, East End Mini-Yacht Club, the Bermuda Athletic Association and Baileys Bay Cricket Club. Minister De Silva is also an advocate for unifying Bermuda's ethnic groups, evidenced by his role as a founder of the West End Runners Club (known as The People's Running Club), one of the first running clubs to include significant joint representation of both black and white Bermudians and non-Bermudians.

Minister Profile - The Hon. Zane De Silva, JP, MP, Minister of Health

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VII.

Banquet
We are honored to reflect on the accomplishments of the past forty years in the development of Bermudas Social Health Insurance System. We accomplished much within the Healthcare System over the past four decades. We were blessed with many talented individuals who have dedicated themselves to the task of establishing a principled healthcare system that allows us to care for those in need and provide an excellent standard of care to the majority of Bermuda. Let us both reflect on these successes and think of the road ahead. Leadership may be defined as inspiring in others the courage to continue on after we have moved off of the great stage of life. As industry stakeholders and partners, we must build the capacity in others and within our healthcare system today to ensure we have a strong and sustainable system for many years to come.

Selected Milestones in Social Health Insurance 1970s

Enactment of the Health Insurance Act 1970 Passage of multiple Health Insurance Regulations circa 1971 & 1973 Creation of the Mutual Reinsurance Fund (MRF) Expansion of the Government Subsidy to cover youths from 18 to 21 circa 1984 Expansion of HIP Benefits to cover Supplemental benefits 1987 Argus offers Dental coverage as part of its Health Insurance packages Prescribed Sum Order introduced to allow HIP to be subsidized by the MRF Oughton Report published, a seminal report examined the healthcare system 1996 Hospital Insurance Plan becomes the Health Insurance Plan in early 2000s Shift to 50th percentile of Customized Fee Analyzer in early 2000s Introduction of Prescription Drug Benefits to HIP 2002 Bermuda Health Council Act passed, a primary recommendation from Oughton Report 2004 The Health Summit is hosted by the Ministry of Health in 2005 Operation of the Bermuda Health Council and phasing out of the Hospital Insurance Commission 2006 Introduction of Basic Dental Coverage to HIP in 2008 Introduction of FutureCare, a plan designed for Bermudas seniors April 2009 Health Insurance Section demarcation from Social Insurance; becomes the Health Insurance Department under the Ministry of Health April 2009 BHB opens Urgent Care Center in St. Davids 2009 Bermuda Hospitals Board (BHB) introduces Diagnostic Related Groups (DRGs) for inpatient hospital stays April 2009

1980s

1990s

2000s

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2010

BHB announces preferred bidder for the Hospital Re-development Phase one October 2010 Health Financing Summit November 2010

Pioneers of Social Health Insurance

Dr. John Cann has made his contribution to Social Health Insurance in Bermuda since 1979. As a member of the Bermuda Hospitals Board, the Hospital Insurance Commission, the Bermuda Health Council, numerous other Government boards and most recently, the Health Insurance Committee, he has made an integral contribution to nearly every significant policy initiative from the Ministry of Health. Mrs. Yvonne Joseph has a long association with both social insurance and health insurance in Bermuda. Having started as the Office Manager in 1968 and acting as a pioneering Insurance Officer for the Department of Social Insurance from 1969. She has overseen the development, implementation and the establishment of social health insurance in this country. Mr. Bruce Schobel & Professor Robert Myers were the actuaries for the former Hospital Insurance Commission since the inception of the Hospital Insurance Act in 1970. Prudent actuarial analysis ensures stability and sustainability in the social health insurance framework. Bruce is a past President of the Society of Actuaries in the United States from 2007 to 2008. Professor Robert J. Myers, recently passed away at age 97 in February 2010. Professor Myers was involved in performing the actuarial analysis from the very inception of the Health Insurance Act through 199, Professor Myers was first associated with Bermuda on his honeymoon in 1938. Mr. Eugene Scott is well-known within the industry for his encyclopedic knowledge of health insurance. According to the Director of the Health Insurance Department, This individual is the Godfather of health insurance in Bermuda. Before joining the Department of Social Insurance, key stakeholders advised me that this long-serving Administrative Officer could answer all your questions. Mr. Scotts name became synonymous with the Hospital Insurance Commission because of his long-standing contribution to that body. Dr. Clarence James is a representative of the private health insurance sector, a practitioner and a political force in the development of our social health insurance system. Most recently, he has served as the long-term advisor to the Government Employees Health Insurance Fund and remains the Chairman of the Health Insurance Association of Bermuda. Dr. James has seen our system at its earliest stages and has been part of the policy development, passage through Parliament, implementation and refinement of our system.

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VIII. Next Steps

The Health Financing Summit was not an end in itself, it was the beginning of a larger dialogue with all the stakeholders in the industry that we hope to continue. There are several events and activities in the near future that will help to drive the conversation forward. Our role as a community will be to engage in these activities and to think about what we can do individually and through our various organization to help the system become more sustainable and to address some of the cost containment issues raised in the Summit. Future activities include the following: 1. National Health Plan The Ministry of Health is collaboratively developing a National health Strategy to take Bermuda forward. More information will be forthcoming on this plan. 2. Ageing Conference March 2011 This is being organized through the National Office for Seniors and Physically Handicapped and aims to encourage a wider dialogue on all aspect of ageing ranging from Social, Financing, and aspects. 3. Health Insurance Reform Initiatives The Bermuda Health Council has ended its consultation period for these proposed reforms and is working with the Ministry of Health to implement the modified plan 4. Hospital Redevelopment The King Edward Memorial Hospital is on schedule for its Public-Private Partnership to bring about the new wing of the Hospital 5. Continue the Dialogue All stakeholders should remain engaged in dialogue at all levels through the various industry bodies and associations. Much of the Summit information is available on the website at www.hfs2010.gov.bm

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IX.

Conclusions
The Ministry of Health hosted the Health Financing Summit on Monday, November 22, 2010 at the Fairmont Hamilton Princess. Those in attendance include Madame Premier, the Hon. Paula Cox, JP MP; the Minister of Education, the Hon. Dame Jennifer Smith; and the Deputy Premier and Minister of Public Works, the Hon. Derrick Burgess, JP MP. Also in attendance were Members of her Majestys loyal Opposition, Dr. Grant Gibbons, Mrs. Louis Jackson, and Mr. John Barritt. Attendance at the Summit was over 180 persons with another 160 persons attending the 40th Anniversary Banquet. Of note was the number of participants who attended from overseas who have an interest in Bermuda and its healthcare success. There were a number of themes that continued to resurface throughout the day, for example: 1. Healthcare costs are driven by utilization, demographics and new technology. 2. The challenges the system faces in coming years include increasing costs, an ageing population, and a relative decrease in the working population supporting the retiree population. 3. Bermuda performance indicators compare well against European countries in key areas such as life expectancy and accessibility to healthcare. 4. Developing a National Health Plan and reviewing the standard benefits, the legally mandated benefit package will improve the system. 5. Wellness & Prevention are approaches to address cost increases in the long-term. 6. Electronic Medical Records are a key part of making the healthcare system smarter and enabling us to use analytics. 7. A review of overseas care is needed to enable some types of treatment to return to Bermuda. Tentative solutions were discussed in the Summit. However, there is no single approach that will immediately fix the system. The Minister of Health encouraged all stakeholders to move forward with purposeful and realistic approaches to the complex problems that challenge the system. He challenged the industry to move forward in a spirit of collaboration using the Bermuda Health Council as a forum. Recommendations from the Health Financing Summit should be linked to the National Health Plan. The Health Financing Summit 2010 achieved its objective of engaging stakeholders in the healthcare system in productive dialogue. The 40th anniversary of Social Health Insurance in Bermuda was also celebrated. Pioneer Awards were given to Dr. Clarence James, Mr. Eugene Scott, Mrs. Yvonne Joseph, Dr. John Cann and Mr. Bruce Schobel for their contributions to the development of Bermudas healthcare system. Next steps include revisiting the findings of the Summit.

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X. i.

Appendix Feedback Summary & Comments

An online survey comprising of 20 questions were sent to all attendees after the Summit. Out of the 180 in attendance throughout the day, we received 45 responses as of December 3, 2010. Here is a summary of feedback received. Over 95% of respondents said they were Satisfied or Very Satisfied with the overall quality of the Speakers. All speakers were rated above 60% in terms of being classified as Good or Excellent. More than 90% said they would recommend the conference. Over 90% said the Conference was well organized. More than 80% said the Summit was Good or Excellent compared to other Conferences they had attended. 6 of 22 respondents who stated what the enjoyed most said they liked the Student Debaters best. The free text feedback and recommendations for improvement was rich.

Comments

Healthcare Debate "The young students were absolutely great, well prepared and confident in their presentations. They had studied the subject matter well and presented their arguments most. Excellent beyond what I imagined it would have been. Kudos to our students, their coaches and parents/guardians. The debaters were excellent and it afforded them a wonderful opportunity. It was enjoyable to watch; however, I don't think it added overall value to the summit. Session 1: KEMH Redevelopment Plan & Financial Implications presented by David Hill I think that some questions needed to clarified on the Extended Care (elderly) and the plan as it is not included in the new development of KEMH. This is very important as the funding for the elderly will need to factored in and extended care is a part of KEMH on the old wing. Good presentation but much of the material people would have already been aware of. Session 2: Health System Performance: Bermuda vs OECD presented by Dr. Jennifer AttrideStirling An informative and well presented session that situated the outcomes of our system in an international perspective. Giving us fresh approach to consider aspects of our health care system and how we finance it. Presentation highlighted the Bermuda health care system to OECD, but did not address the cost of implementing the steps to correct deficiencies, or how these cost will be funded.

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Session 3: Update on Oughton/Andersen Healthcare Reports presented by Dr. John Cann Useful summary. Not enough about why recommendations not actioned. What were the barriers? Shocking that we are still discussing implementation of the recommendations 15 years later and that they reflect the same challenges we are now facing. Luncheon Keynote Address on Smarter Healthcare by Dr. Paul Grundy It certainly gave food for thought. It shows the need for a complete change in mindset for the public. To be effective, you have to start with pre-schoolers promoting a good diet, and exercise - as prevention is better (and less expensive) than cure. At first I thought this was some computer nerd selling his software package. Then I realised that this is the kind of system thinking that is essential to preserve a semblance of public health in the face of unrationed technology. Session 4: Modernization of the Health Insurance Department presented by Kathy Young, Linda Wilkin, and Collin Anderson Clearly a session that talked to where we were, what we have accomplished and what the next steps should be. Without getting to the affordability of future care, it was incomplete. I recognise there are political issues here. But this is the fourth part of what Paula Cox raised, after needy patients, greedy doctors and fat cat insurance companies. Session 5: Analysis of Bermudas Health Financing System presented by Howard Cimring Factual and informative. While I appreciate the information much of what was reported on is already widely known. I would have appreciated their thoughts on the way forward. Panel Discussion on Bermuda Healthcare for the Future Enhancements & Sustainability with Gerald Simons, David Hill, and Dr. Jennifer Attride-Stirling This was the most valuable session of the day. I only wished that more time had been allotted. I would have appreciated more debate around issues, as discussion was broad and thus broad agreement between the panelists occurred. Perhaps getting into details would have permitted this and this is what is necessary to engage in with such a great range of stakeholders in the room as we are all aware that there are differences in how we approach change in the financing system. Its great to establish what we agree on but where we often get caught up is in the details. Banquet Keynote Address on Lessons Learned from the U.S. Healthcare System Implications for Bermudas Healthcare System in the Future presented by Kevin Lofton VERY impressed with Mr. Lofton's presentation and background. Interesting to compare the US experience with the Bermudian experience re: health care reform. Too much data for an after dinner speaker; also, same information as the morning.

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Press Coverage
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. Bermuda Sun, September 10, 2010 Casting call for top student debaters Bernews, September 10, 2010 iPads on Offer for Top Student Debaters Royal Gazette, September 11, 2010 Wanted: Young people with an interest in debating Royal Gazette, October 19, 2010 Health summit to focus on costs Royal Gazette, October 20, 2010 Summit will take a close look at healthcare financing Royal Gazette, November 2, 2010 - Its like trying to slow down a speeding vehicle Royal Gazette, November 9, 2010 Confronting Health Care Costs Argus CEO speaks Royal Gazette, November 16, 2010 David Hill on healthcares rising costs Bermuda Sun, November 17, 2010 Summit to focus on cutting healthcare costs Royal Gazette, November 20, 2010 Public are welcome to attend health insurance meeting Royal Gazette, November 20, 2010 BHBs $18m surplus raises questions on health care costs Bernews, November 22, 2010 Premier Opens Health Financial Summit 2010 Royal Gazette, November 23, 2010 Number of workers supporting Bermudas elderly to decline sharply Bermuda Sun, November 26, 2010 Islands soaring healthcare costs debated at health summit

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Sponsors
Platinum Sponsors
Morneau Sobeco Banquet sponsor BF&M Luncheon sponsor

Bermuda Hospitals Board Exhibit Hall sponsor Philadelphia International Medicine Breakfast sponsor Bermuda International Eye Institute Milestones sponsor CMN Pioneers sponsor IBM

Gold Sponsors

Bermuda Diabetes Association Afternoon Break sponsor Bermuda Health Council Morning Break sponsor

Silver Sponsors

Bermuda Cancer and Health Centre Bermuda HealthCare Services and Brown-Darrell Clinic HI Group of Companies LTC Solutions Ltd Health Insurance Department

Exhibitors

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Health Financing Summit 2010

Monday, November 22nd, 2010
Fairmont Hamilton Princess, Bermuda

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