QEH cuts cost as health levy kicks in

The Health Service Contribution (HSC) is performing as expected, raking in just over $60 million in the 2019/2020 financial year.

And while it experienced a slight dip this financial year due to the impact of the COVID-19 pandemic, Ministry of Health officials are confident that the revenue-raising measure will collect the intended amount in the upcoming 2021/2022 financial year, which begins on April 1.

Officials of the Ministry of Health and Wellness outlined the performance of the tax measure so far, while pointing to revenue-raising and cost-cutting measures as they responded to questions from Opposition Leader Bishop Joseph Atherley on Friday during the Estimates debate.

Adrian Hurley, Director of Financial Services at the QEH reported that “Last financial year the health levy was performing at about $5.11 million [per month]. After COVID it has fallen to about $4.1 million and for next financial year we are projecting about $50 million from the health levy.”

Implemented in October 2018 to help fund the operations of the Queen Elizabeth Hospital (QEH), the HSC was intended to rake in about $50 million per year, applied at a rate of 2.5 per cent, with 1.5 per cent being paid by employers and 1 per cent by employees.

Hurley also pointed out that the primary healthcare facility was expected to generate income in the amount of approximately $3 million “from its own private services”.

“We expect to have a budget of about $173 million for the next financial year. We expect that as the economy improves that health levy will then increase that [by] approximately between $4.5 and $5 million [per month] at the latter end of the financial year,” said Hurley.

Responding to questions relating to procurement and efficiency, Executive Director of the QEH Juliette Bynoe-Sutherland gave the assurance that significant advancements have been made in those areas over the past three years.

Bynoe-Sutherland itemized some of the initiatives implemented including the automation in the procurement department which has been moved to financing; the restructuring of the department to improve leadership; consolidation of the hospital’s inventory into a single system, and separation of warehouse and distribution from receiving and purchasing.

“There are other areas of wastage that we have had to tackle. Some of those areas involved making investment in equipment that would see us achieving savings,” she said.

She singled out the $175,000 distillation water plant investment that she said was now saving the hospital $350,000 annually and the installation of a $587,809 oxygen plant that is now saving the QEH $1 million annually in the purchase of oxygen.

“We have also seen the drive towards clean energy and renewable energy and we are working with the Ministry of Energy on a solar PV project that will see a reduction in our bill at the institution by $360,000 annually,” said Bynoe-Sutherland.

“We are going a step further under the leadership of the Ministry of Finance looking at how we can use solar energy to effectively save costs and reduce debt at the institution.”

She also noted that the purchase of a low steam sterilizer and the $1.4 upgrade of central sterilization area will reduce the QEH’s bill for outsourcing of this sterilization service by about 55 per cent.

“So I want to flag that we have made significant progress in how we have been approaching wastage as an institution both as capital investment to be able to save cost and also in terms of reorganization of our procurement systems so that we can have better financial control and improve management of that area of the hospital,” said Bynoe-Sutherland.

(marlonmadden@barbadostoday.bb)