Bermuda: New hospital will cost more than expected

January 10, 2013


Bermuda: New hospital will cost more than expected

By Jonathan Bell
The Royal Gazette

The final cost of Bermuda’s new hospital will prove higher than many expect, new Health Minister Patricia Gordon-Pamplin has warned.

But, in a candid interview with The Royal Gazette, the Minister promised to be keep the public informed as to where the money is being spent.

At a time when cost containment is a top health concern, Ms Gordon-Pamplin also vowed to make good on One Bermuda Alliance calls for the salaries of Bermuda Hospitals Board officers to be made public.

While in Opposition, the OBA chastised Government for its tardiness in releasing BHB financial statements.

Ms Gordon-Pamplin this week affirmed the OBA’s bullish stance as Opposition on the release of wage figures.

“Absolutely,” said the Health and Seniors Minister, when asked if she would follow through. “The BHB legislation requires disclosure.”

Previous administrations have published wages as a lump sum, which the OBA maintained wasn’t sufficient.

Ms Gordon-Pamplin conceded: “Obviously, there are some things that may need to be relatively confidential.

“However, with that said, I think that when we are spending public money, we have an obligation to let the public know where that money is going.”

Adding “I don’t do secrets very well”, the Minister said: “If you’re spending my money, I want to know where it’s going. That’s just the way it is. We have made that commitment to transparency.”

Although the new hospital facility’s original design and construction costs are given as $247 million, the project’s complex financing as a Public-Private Partnership (PPP) carry significant long-term costs.

“From an accounting perspective, historically, PPPs end up costing more,” Ms Gordon-Pamplin said. “That’s just the nature of it. The people who have put their money up front want a return on their investment, which is perhaps not an unreasonable expectation.

“The fact is that given the budgetary constraints that we have operated under, given the economy as it is, there is no way that we could have afforded to build the hospital. What’s interesting is that within the debt number that we have heard, the hospital in not included — because it’s deemed to be, within the accounting jargon, an off-balance-sheet transaction with the PPP. So it’s going to perhaps end up costing us more, in the long run.”

The hospital remains on-budget, and scheduled to finish next year, she said.

“But the budget number that exists for the construction of the building, you can be assured that is not the final amount that will have to be paid at the back end for the cost of the construction,” she continued.

“I still have to get a handle on the exact amounts that we’re dealing with — but I expect it to be high.”

In the wake of an acrimonious election campaign which saw a war of words over the FutureCare seniors’ insurance programme, the Minister reiterated that the new administration has no intention of scrapping the programme.

“Election campaigns bring out the worst in people as they jockey for position,” she said. “There was a big advertising campaign by the PLP that we were going to take away FutureCare. That has never been the intention of the OBA, and it’s certainly not the intention of the OBA Government.”

Government’s aim now is to “make it fair, so that people who are getting specific benefits are paying the same amount”, she said.

“While one cannot fault people for making the most of an opportunity that’s presented, I think there are people who are harder done by who have a greater need than others. We want to look at the entire concept. Sustainability is important.”

Another legacy of the previous administration is the legislation banning upfront payments for medical treatment, which Ms Gordon-Pamplin said “made eminent sense”.

“The one thing that you will not get us doing is throwing out the baby with the bathwater. If there is a policy that exists that makes sense, we obviously will allow it to continue.”

However, she said, the system would need tweaking: “I do believe that we have to try to broker something where there is a little bit more latitude on behalf of service providers, such that people do not feel as if they have to do without healthcare simply because they do not have to $20 or $30 or $40 for the co-pay. It’s something we have to work with. If we have to tie it in with Financial Assistance, then we just have to make it robust. I don’t want people being ill just because they don’t have a dollar.”

Ms Gordon-Pamplin could offer no advance details on healthcare expenditure in next month’s Budget

“We have to recognise the fact that I can’t spend any more money than is made available to me,” she said. “And we can’t have any more available to me than exists from a budgetary perspective.”

Promising a healthcare system based on “sustainability and equity”, she added: “What we want to make sure is that the people of Bermuda get the best bang for their buck, if I can be so crude as to put it that way. It’s important to look at everything, from the cost of pencils to the cost of imaging.”
King Edward VII Memorial Hospital before expansion
King Edward VII Memorial Hospital before expansion

King Edward VII Memorial Hospital architectural rendering
King Edward VII Memorial Hospital expansion

King Edward VII Memorial Hospital expansion
King Edward VII Memorial Hospital construction -January 2013
King Edward VII Memorial Hospital
King Edward VII Memorial Hospital history
Bermuda Hospital history

Bermuda Hospital history

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