Comment / Bermuda shorts 14: happy holidays!

This summer I have enjoyed two holidays. I spent a week in New York and Orlando in June, before an arguably less exotic return to the UK in August. This second trip will hopefully include finally selling my house, which has been on the market for over two Brexit-fuelled years of uncertainty. But it will also involve a tour of a number of very nice distilleries in the Highlands and Islands of my native homeland.

We will be accompanied, part of the way, by my son and girlfriend who arrived in Bermuda for their vacation some time ago. He didn’t bring his dirty laundry 3,500 miles like last year. But he more than made up for that in his eight week stay, leading to us running out of water and gas and most of our food!

In a country where water is treated as a precious commodity – as it is collected from the roofs of houses rather than being piped – gas is bottled and you buy your favourite foods on the odd occasion when they appear in stores, this proved to be a bit of a headache!

On the work front, our clinical affiliation agreement (CAA) with Johns Hopkins Medicine International has really taken off in recent months. Bermuda Hospitals Board (BHB) is developing a stroke programme with its assistance. This may sound like old hat from a UK perspective, but Bermuda faces a number of public health challenges that make this a real priority.

Levels of obesity, due primarily to poor life-style choices, lead to some of the highest levels of stroke, diabetes and chronic heart failure in the developed world. Indeed, the youngest person diagnosed with a stroke in Bermuda in recent years was in his twenties.

As with all things in an island nation, development of these services without external support is hampered by recruitment difficulties, staff shortages, being small and access to training and ongoing accreditation. Through the CAA, BHB can supplement quality on-island medical care with access to Johns Hopkins’ expertise via telemedicine consultations, visiting specialists, and training and accreditation programmes.

Our expectation is that this will be the first of a number of clinical programmes that can be developed. An additional benefit is the ability to provide care in Bermuda that has previously been done in a US specialist centre, leading to reduction in cost and improved convenience for patients.

Under the auspices of the CAA, the BHB finance team has recently commenced its own relationship with finance staff from Johns Hopkins Medicine. Bermuda has historically operated a very similar fee-for-service funding model to that which exists in the US. It has now moved to a fixed revenue agreement, as has been the case for some time in the State of Maryland, where Johns Hopkins’ main hospital is located.  There should be a huge amount we can learn and benefit from.

Maryland has operated a waiver from Medicare since 1977, which means that the national Medicare rates do not apply to anyone who receives treatment there. Instead, the state’s Health Services Cost Review Commission (HSCRC) runs an ‘all payer’ system for private insurance, Medicare, Medicaid and self-pay. This sets rates based on costs for all payers who pay the same rate for the same service at the same hospital.

This may sound a lot like the NHS tariff and allows identification of high-cost hospitals, while encouraging efficiency.  In 2014, HSCRC introduced five-year global budget revenue (GBR) agreements, which established a fixed revenue structure for each hospital. It has refined the system further with establishment of a total cost of care all-payer model – designed to coordinate care across hospital and community settings, improve health outcomes and constrain revenue growth.

This capped revenue model is adjusted to take account of inflation, utilisation and major changes in service and there are detailed mechanisms that determine whether services have been reimbursed at an appropriate level. As the volume of services fluctuate, prices are adjusted to ensure the GBR cap is maintained.

Interestingly, since GBR has been in place, utilisation levels have reduced significantly across all Maryland providers as they look to manage care more effectively outside a hospital setting through admission avoidance, facilitated discharge and greater control over referral patterns.

This may not sound terribly innovative from a UK perspective, where people are becoming more used to integrated care systems. But it is ground-breaking for the US, where utilisation typically increases year-on-year and health spending is now over 18% of GDP.

Johns Hopkins Medicine also highlighted some aspects of its financial structure. In an organisation with turnover in excess of $8bn, which has four wholly-owned affiliates and employs 40,000 staff, this may sound like something of more benefit to me in my former life at London’s Imperial College Healthcare NHS Trust than in a small, isolated, largely community facility. However, revenue cycle management, budgetary control and financial reporting are no less important here than elsewhere and I’m looking forward to further developments over the coming months.

Finally, I have managed to get through the first stage of the HFMA’s masters-level programme in healthcare business and finance (and this was way more difficult but also much more rewarding than I imagined). I’m now looking forward to starting the MBA proper with BPP University in October.

I had never imagined I would one day become an overseas student as well as an ex-pat, but am very much looking forward to the course. It is never too late to learn, even when you’re as old as I am! I’ll keep you posted on my experiences.

Bill Shields was chief financial officer at Bermuda Hospitals Board from April 2017 to November 2022. He is now chief finance officer at Devon Integrated Care Board.

All the blogs from this series can be accessed here