The complex problems and opportunities within the health sector in Jamaica are key priority areas particularly suited to a social partnership approach on which consensus may be easier to achieve than our very difficult and many-layered problem of crime, so far. It also fits nicely with Prime Minister Andrew Holness’s recent emphasis on “partnership for productivity”.

The announcement that the local government election will be held on February 26 also suggests that now is the time to put forward policy suggestions in the hope the major parties may adopt them in their political manifestos for the upcoming general election.

A trip to the US to access the US health-care system has revealed how insurance-driven it is. If you don’t have insurance and are not wealthy, “dog nyam your supper”, as they say in Jamaica. This is to some extent true in Jamaica, too, as our “free” health care is not really free due to the absence of equipment, drugs, etcetera at public hospitals, even if you get to see one of the over-stressed public hospital doctors. Those who can afford to (or have insurance) go private. However, Jamaican doctors charge a fraction of US doctors, on average, so that improves access. The recent US State Department warning to Americans travelling to Jamaica about our low health-care standards could have taken this into account.

In looking at the US economy and productivity, the importance of apps, like the individual app of the US hospital I am going to now is clear. The complexity of an administrative system in which every cost is treated separately, all mediated by many different insurers, suggests there is a reason health-care costs in the US are the highest in the world at around 16 per cent of gross domestic product (GDP). This compares with roughly half that in the so-called single-pay systems in countries such as the UK or Canada, where the national health services offer “free” universal health care — they don’t effectively exclude the uninsured like the US appears to — but it is rationed by long wait times.

Taiwan

Today I want to look briefly at Taiwan’s health-care system, which has been called a hybrid between Canada’s and Germany’s, and which was featured in a documentary by famous journalist Fareed Zakaria several years ago. Perhaps not coincidentally, despite or because of its nearness to China, Taiwan was one of the countries that seemed to manage the COVID-19 crisis best.

Taiwan’s health-care system delivers quality universal coverage but at roughly 6 per cent of GDP. It combines a single-payer national employment-based insurance system with a significant share financed by co-payments but with large subsidies for those who can’t pay. It has a single integrated health record management system — administration costs are a very low percentage of total health expenditures — but allows its customers to choose their own providers.

One complaint, however, is that doctors don’t spend very much time with patients. This may be due to the State being a monopsony buyer, so doctors’ salaries are low, which is also a serious issue in Canada (they can earn much more in the US) and, of course, Jamaica. Do doctors prioritise volume?

Health Tourism

So how can Jamaica bring its health-care system up to US levels, something almost demanded by the US Government through its travel warning. I would argue a multifaceted approach is required.

Jamaica is currently looking at moving to an unemployment insurance system — we have a redundancy payment system currently — and has a variety of mandated employment payroll taxes and charges, including the National Housing Trust (NHT) levy, which is not a tax, but most contributors can’t or don’t access to buy a house, and an education tax, which does not pay for education but is a central government charge. Singapore, in contrast, has one central provident fund which allows flexibility in what their “forced savings” can be used for.

In my view, the improvement in financial market access means we should refocus this revenue on human rather than physical capital development, such as finding other ways to fund mortgages and redirecting some of this funding to financing health care for our general population, starting with using what has now become simply an annual cess from the NHT used to help finance the central government budget.

However, to achieve true financial impact — for example, raising the quality of our health-care system to US levels — we will need to create a real public-private partnership.

Jamaica needs several state-of-the-art hospitals, its existing hospitals all need new equipment ( a state-of-the-art positron emission tomography (PET) scanner can cost several million US dollars), and its nurses and doctors need to be paid sufficiently so that they don’t feel they need to emigrate to get ahead. Indeed, the huge brain drain Jamaica has suffered in this area is part of the opportunity, as it means that there are many US-qualified Jamaicans working in the health sector overseas who can be mobilised with the right opportunity.

Buying health

Jamaica should target both true medical tourism and health and wellness tourism specifically as new industries. They should be able to benefit from the “new” 2014 Pioneer Industry Act — we are still waiting for the regulations now promised by the March budget. And, importantly, the Government could “buy forward” services, in a similar way to Operation Warp Speed, whereby the US and UK governments mobilised their pharmaceutical companies to facilitate and accelerate the development, manufacturing, and distribution of COVID-19 vaccines, therapeutics, and diagnostics.

Incidentally, this was far and away the best part of their respective responses which were otherwise highly disappointing. One of the advantages of our better credit rating and a demonstrated respect over time for the rule of law (I would still argue perhaps controversially for keeping the Privy Council) concerning government contracts is that investors will now take our government guarantees seriously.

Jamaica doesn’t necessarily have to pay all cash for these future services for their citizens either but instead could contribute land/infrastructure to a project or even retain it as an equity contribution to be monetised later. Jamaica should also seek to mobilise development funding from the US International Development Finance Corporation (DFC) and other development institutions, particularly from countries that have benefited from our diaspora in this area, namely the UK and Canada.

A US venture capitalist had once told me he would finance an IT system for Jamaica’s health-care sector. The reason is the health data on one system for our three million population would be quite valuable, both for the US and perhaps in the future the much bigger potential market of Africa. In any case, a competitive tender process should ask not just companies but countries (Taiwan?) to compete globally with their proven systems, some of which may even offer to finance it for us.

The key issue will be to get US accreditation for our hospitals, particularly by its major insurance companies, which would then be able to pay substantially less for the same service for US citizens. In short, the answer is to appeal to their profit motive. The other major market could be the still extensive portion of the US population that is uninsured, perhaps working with funding from some of the major US foundations interested in this. The first “entry” market, of course, should be our own diaspora, some of whom already come here for medical care anyway. Some or all parts of the initiative could also seek US/UK/Canadian charitable status, allowing for charitable contributions.

The fastest way to achieve accreditation would be to bring some of the major US hospital chains here to set standards. The business model would be a front end for US tourists on the north coast who would pay more (more like a hotel charging process as tourists) to cross subsidise a back-end operation in our major population centres like Kingston and Portmore, where the more walk-in population would effectively be covered by national government insurance, with low or no co-payments depending on ability to pay.

If this was combined with encouraging access to financing for medical equipment and full tax concessions for all medical equipment and supplies, similar to the current productive incentive relief for tourism, Jamaica could create a serious new industry rivalling our existing tourism industry within a decade.

The opportunities do not stop there, as such a health tourism strategy could finally make our long-mooted “retirement villages” strategy a truly viable one, as without US-level health care (a key component of that offering), this is likely to remain for the most part an unrealised dream. We will also have to deal with the issue of crime, of course.