There are indications that the Government could be contemplating a reduction in benefits on drug subsidies provided through the National Health Fund (NHF), as the costs of critical pharmaceuticals skyrocket and the strain on the fund’s expenditure is compounded by the population’s worsening disease profile.

The hint came from Health and Wellness Minister Dr Christopher Tufton on Tuesday as he made his contribution to the 2022/23 Sectoral Debate in the House of Representatives.

“This is absolutely unsustainable. We must review, and we must reform. So, we have few options — we either reduce the benefits to over 720,000 Jamaicans who are likely to need medicines or curative services and cannot afford to pay in the private sector, or we change our funding model to reflect a more sustainable approach to financing the health sector, or use policies and laws to change our lifestyle to improve our health profile and ultimately reduce costs, both to the individuals and to the collective. The answer is likely to be a combination of all of the above,” Dr Tufton stated.

He said the Government will begin consultations on financing reform for the health sector, as the current arrangement is unsustainable.The health minister pointed out that costs to the NHF have escalated by 139 per cent since 2016 (including adjustments for COVID-19). It is projected that the fund’s budget will have to be increased by 30 per cent over the next three years, to manage the demand for subsidy on pharmaceuticals.

“At this rate of demand and cost increases to treat over 720,000 Jamaicans benefiting from the NHF and counting, based on our sick profile this critical entity will need approximately $40 billion over the next three years or risk being unable to address the needs of Jamaicans suffering from some sort of illness — the majority of which is lifestyle-related choices,” he told the House.

To make the point, he said in 2020/2021, the NHF spent more than $1.27 billion on hypertension drugs compared to $940 million for 2014/2015. The fund spent another $1.4 billion on diabetic drugs, compared to $887 million in 2014/2015, reflecting a 59 per cent increase.

Dr Tufton said these costs are not only being borne by the NHF, but are threatening to impoverish Jamaicans.

“Rising health costs are not just hitting us as a collective — as taxpayers — but also as individual householders, eroding our disposable income. In fact, the economic impact of rising costs is devastating and projected to get worse,” he stressed.

Over the 2020/2021 period, Jamaicans spent more than $2.38 billion in NHF co-payments on drugs to treat high blood pressure, compared to $1.46 billion in 2014/2015. “It’s not just about the taxpayers and the NHF and the capacity to provide. To the extent that you have to co-pay, those costs are going up and hitting Jamaicans where it hurts. This is a 62 per cent increase just for one illness,” he stated.

He said Jamaicans also spent a staggering 82.6 per cent more in 2020/21 on drugs to treat diabetes, as costs moved from $863 million in 2014/15 to $1.57 billion in the last financial year.

The price of selected pharmaceuticals covered by the NHF skyrocketed between 2017 and 2022 with eight out of 10 drugs increasing more than 100 per cent during the period. Dr Tufton pointed to commonly used pharmaceuticals such as paracetamol, dextrose in saline, and morphine powder whose costs jumped by 785 per cent, 87 per cent, and 117 per cent, respectively.

He said with health-care costs rising rapidly, access can only be granted if financing is available. “We all should know by now that healthcare is not free; we all pay, one way or the other. The question is, who pays, how they pay, and how much they pay.”

Dr Tufton emphasised that it is time to restructure the health system to achieve a more sustainable financing mechanism in order to ensure efficiency and accountability of existing expenditure as well as a greater proportional contribution to reflect the increased demands on the system.

To determine how the restricting of the health system will be financed, the Government is to embark on a series of internal consultations as well as with multilateral partners, as a follow-up to the Green Paper on a National Health Insurance Plan that was tabled in 2019.

Economist and executive director of CaPRI Dr Damien King has been appointed to lead the national discussions on the current challenges with health financing and implications for poverty and the economic and social advancement of Jamaicans.