The head of Bermuda's largest private medical diagnostic operation has called on the Island's finance minister to quit his "witchhunt'' against him and to do a proper study of all health care providers on the Island to see if they are abusing the system.

"He needs to come out from behind the bushes and do a study of all doctors, of all those who wield a scalpel, to see if they are doing unnecessary services,'' Dr. Ewart Brown of Bermuda Healthcare Services told The Royal Gazette. "I will not cooperate with a witchhunt directed solely against me.'' Dr. Brown, who is the Shadow Minister of Human Affairs, was responding to claims by Dr. Gibbons that privately-owned services were partly responsible for the "tremendous increase'' in health care costs.

Dr. Brown said he and other private providers were being made scapegoats by a Government which didn't know what to do about controlling health care costs.

The dispute highlights the growing intensity of the debate about changing Bermuda's system of health care, which has come increasingly to the fore since a Government review of the issue was produced in 1996.

In a Royal Gazette story published last week (April 6), Dr. Gibbons also said Government was moving to cut costs by setting standards for local providers.

One strategy would be to ensure there were no conflicts of interest which could occur when a physician owns a diagnostic or testing lab and who might be encouraged to order extra tests to boost revenue.

While Dr. Gibbons did not name Bermuda Healthcare Services in his comments, Dr. Brown said it was an attack levelled directly against him.

"I know that he is taking about Bermuda Healthcare when he is talking about conflict of interest,'' Dr. Brown said. "He should be more concerned about UBP polices that benefit his family empire. It's a mega-buck arena. He should be careful. He is treading on dangerous ground when he is saying that it's others outside the hospital who are driving costs up. Let him provide the proof.'' On the contrary, Dr. Brown said, services like his were up to 50 percent cheaper than the hospital charged. Dr. Gibbons should be directing more patients his way rather than implying he was overcharging the system.

For example chest X-rays were 40 percent cheaper at Bermuda Healthcare compared to the hospital. Ultrasounds at his service were two-thirds cheaper than those done at the hospital.

A full panel of blood tests were $400 at the hospital compared with $80 charged by Central Diagnostics Laboratory, he said.

"To say that the outside services cost more is less then honest,'' he said.

Instead of picking on the private diagnostic and ancillary health services, Government should be directing its attentions to the insurance companies and cutting costs at the hospital.

He said Government was not doing that because its interests were "closely allied'' with the insurance companies.

Government, by proving its own low cost insurance for the young, the elderly and the indigent, was in effect subsidising the companies, he said. This allowed the insurance companies to "cherry pick'' by providing service only to the most healthy segment of the population -- those unlikely to make huge claims.

"The subsidy allows the companies to cherry pick, leaving Government to pick up the rest of the tab,'' Dr. Brown said.

He said this sort of provision of insurance only to the "healthy'' middle, would not be allowed in other countries like the US. And while health care services on the Island were generally cheaper than those in the US, insurance premiums were at about the same level as those charged by US companies.

Government should investigate this gap, which represented a huge profit for the companies, he said.

"The insurance companies don't have to do much to reap large profits since they only have to insure the healthy middle,'' he said.

In effect, health care costs were getting higher because the elderly were forced to buy Government insurance which then directed them to the most expensive provider in the system -- the hospital.

He also said the "subsidy'' and high premiums meant insurance companies did not attempt to crack down on the prices charged by the hospital, creating inefficiencies in the system.

"They could lower their premiums if they revised their payment scheme to the hospital to force it to be more efficient,'' he said. "Twenty to thirty percent of the chronic patients don't belong in an acute care setting. The insurance companies could, through their payments, encourage the hospital to have discharge planning on admission so we don't keep people in hospital who don't need to be there.

Dr. Brown said he was planning to eventually set up a private hospital operation which would provide competition, help make the public hospital more efficient and provide a better all-round quality of service.

"There is no competition to push them to be efficient,'' he said. "As long as the health care financial system makes the hospital the hub and the preferred location for services, it's going to be more expensive for Government.'' In response, Dr. Gibbons said his comments about the rising costs of ancillary services had not been directed at Dr. Brown. However the issue was of concern considering Government's insurance plan had registered a 68 percent increase in payments to local laboratories in 1997.

Dr. Gibbons also said there was a need to set standards and means of accreditation for ancillary health services, including ensuring there were no conflicts of interest.

"We believe that there is a real potential for conflict of interest when physicians direct patients to diagnostic services they own,'' he said. "This is prohibited in most states in the US.'' He also said it was recognised that some services the hospital provided to outpatients were higher than those provided to inpatients, which was why Dr.

Brown could claim lower prices in some cases.

The hospital was in effect subsidising in patients costs with higher charges for outpatient services, a subsidy recognised by the insurers through the payment schemes.

For example a hospital bed in the US cost two to three times more than it did at King Edward VII Memorial Hospital. Money generated from outpatient services made up the difference in costs.

Government was seeking to push the hospital to readjust prices to reflect real costs. Once this was done, costs for services at the hospital and outside the hospital could then be compared.

As to claims Government was "subsidising'' the insurers by leaving them only the most healthy segments of the population to cover, he replied: "It's not as simple as Dr. Brown has said.'' Because of Bermuda's small patient population, two or three claims could affect a single insurer's loss experience. In 1997, two private insurance companies had a claims experience 50 percent above the overall average.

Government's insurance plan for civil servants had a claims experience 24 percent worse than average.

"It's really the luck of the draw,'' he said.

He said much of Dr. Brown's comments were "political rhetoric and conspiracy theories'' rather than having any firm foundation. Government had started a process -- beginning with the 1996 Health Care Review followed by recommendations from consultants Arthur Andersen -- which is well on the way toward reforming the system, he said.

MOUNTING COAT OF EXTENDED CARE While extended care patients account for half the bed nights spent in King Edward VII Memorial Hospital by acute care patients, the hospital received just one fifth of the revenue from them compared to the revenue received from in acute care patients: 1997 Bed nights Hospital revenue Acute Care 62,682 $35.1 million Extended Care 37,091 $7.5 million Dr. Ewart Brown Dr. Grant Gibbons Graphic file name: GIBGRAM