FEES paid by Jamaicans for the services provided by government hospitals and health centres jumped to a record $1.6 billion last year, according to Minister of Health Horace Dalley.

Dalley told Parliament on Tuesday that the $1.6 billion surpassed the target of $1.45 billion, and represented a 33 per cent increase in collection compared to the $1.2 billion collected in 2004/2005. It also represented 13.8 per cent of the government’s total expenditure for health, an increase from 11.3 per cent in the previous fiscal year.

However, the minister warned that transformational projects in the sector, which were financed by the National Health Fund (NHF), were being endangered by reduced inflows from the tobacco industry, which, he said, was not an inexhaustible source of funding.

“Already we have begun to see reduced inflows to the NHF from cigarette manufacturing moving from Jamaica to elsewhere in the region. We must therefore ensure that we maximise the use of these funds to serve the health needs of our population,” Dalley said.

The NHF is financed by an excise tax on tobacco products, which yields approximately $1 billion per annum; one per cent of the National Insurance Scheme (NIS), which yields about $800 million per annum; and, a specific charge on the budget of $500 million per annum.

However, the Carreras Group, which owned the Cigarette Company of Jamaica, has ceased manufacturing cigarettes in Jamaica, has moved the manufacturing arm to Trinidad and Tobago and operates in Jamaica only as a distribution and marketing company.

Carreras said then that the move was influenced by the possibility of a dramatic 20 per cent cut in production costs. The company said that even with the additional costs of freight and insurance, it would still cost less to import the cigarettes from Trinidad than to manufacture them in Jamaica.

The move has saved Carreras approximately $500 million per annum in production costs but, at the same time, has reduced the industry’s contribution to the NHF.

At the end of August, the NHF had approved 98 projects valued at $3.7 billion of which 31 have been completed and 61 in progress.

Dalley said Tuesday that while his ministry has more work to do to convince the public of the importance of paying hospital fees, he was pleased that the fees were contributing significantly to maintaining the service and allowing the ministry to continue to dedicate the NHF and CHASE Fund injections to facilitate capacity-building initiatives in the sector.

“We still have some way to go to convince persons that what they pay is only a fraction of the real cost. But, the fact is that a significant portion of the fees were collected and this has been making a difference in the ability of our hospitals and health centres to deliver care,” he said.

The minister said that the task now was to implement priority programmes and projects to fit the budget and to continue to identify extra-budgetary financing to deliver quality health care to the population.

-balfordh@jamaicaobserver.com