Business plan shows Island’s Urgent Care Centres couldn’t survive without grants

The original article can be found in: The Royal Gazette  By Jonathan Bell and Owain Johnston Barnes

The Island’s Urgent Care Centres would have required substantial government grants to cover their costs, according to the business plan for the proposed clinics released by the Ministry of Health today.

Shadow Health Minister Zane DeSilva challenged that assertion at a press conference this morning, insisting that the facility turned a profit in 2012/13 and made a surplus between April and July this year.

The Bermuda Hospitals Board recently announced plans to shut down the Lamb Foggo Urgent Care Centre in St David’s — the only clinic built — claiming it was losing $250,00 a year.

“The truth is that Lamb Foggo operated at a $104,000 surplus in 2012/2013,” Mr DeSilva said. “Also, Lamb Foggo was operating at a surplus from April to July 2013 of $95,000.

“That is correct, as we have said in the past, Lamb Foggo is operating at a profit. So what do we have here? A [Health] Minster who stands up in Parliament and says there is a loss of $250,000 per year, while reports from the BHB show that Lamb Foggo turned a profit last year.

“Either the Minister was misled by her board’s chairman, or the Minister misled Parliament and the Country, in either case someone must be held to account.”

A business case released by Bermuda Hospitals Board earlier this month stated that the UCC received 5,600 patient visits in 2012/13, with the cost for each visit calculated at $422.

“This volume of patient visits generated $2.4 million, however, because of high salary and benefit costs, the net income may be as small as $100,000 and in reality BHB is very likely making another net loss,” it stated.

Today Mr DeSilva said the closure of the centre could have less to do with saving money and more to do with privatisation. According to the business plan, Lamb Foggo could be very profitable if it was not bound by BHB’s collective bargaining agreement or revenue caps, he added.

“The Minister has admitted to private, non-transparent meetings with unnamed physicians about taking over the facility. No contract put out to tender, no input from the public, no openness, no transparency.

“It all gives the impression that the OBA is more interested in hooking up their friends and family than in protecting access to healthcare for the people of the east end.”

He made suggestions as to how Government could keep the facility open, such as consolidating the facility with the St George’s clinic, looking at private, religious or charitable sector support, modifying operating hours and cutting the salary of the BHB executive staff by 15 percent.

“This alone would add $250,000 back to the BHB’s coffers,” Mr DeSilva said. “We can work together to keep this facility open, we can work together to improve healthcare, we can work together to reduce wait times. But we cannot work with a minister and board that will deliberately mislead the public in a bid to close and privatise this vital centre.”

The business plan released today gives a break-even analysis, which shows that each centre would have to maintain 8,182 visits. Since its 2009 opening, Lamb Foggo took in about 5,500 visitors annually.

It states: “The lower volumes produced because of the small population in Bermuda does not produce the requisite revenue to support operating the UCCs. Based on the forecasted demand, the cost per visit will greatly exceed the expected reimbursement per visit.”

It proposes a government grant of just below $1 million annually for the first five years of the Lamb Foggo UCC to cover the shortfall.

“The size of the grant is based on the expected operational shortfall with the expectation of a break-even cash flow for each UCC,” it continues.

“The government grant will cover the operational loss, but ultimately serve to provide the community with greater access to care and improved clinical services.”

The East End clinic would have required an annual grant of $979,434, according to the business plan; a grant for the proposed West End clinic would have begun at $820,155, rising to $886,801 by year five of operation.

Said Mr DeSilva in a press release issued this afternoon: “We are pleased that the Minister released the 2007 business case for the Urgent Care Centres. We believe the Urgent Care Centres are necessary to provide better health care to Bermudians. This document confirms that view and provides evidence that Urgent Care Centres are needed and provide improved health outcomes for our citizens.

“While we commend the Minister of Health for releasing this six-year-old report, we call on the Minister to release the August 2013 report commissioned by the Bermuda Hospitals Board. That report shows that the Lamb Foggo Urgent Care Centre has made a profit of $199,294 since April 2012, in direct contradiction to her claims that the facility is losing money.”

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