Merger of BF&M and Argus to result in job losses
The amalgamation of BF&M and Argus will lead to job losses but the offices and business lines affected and their extent are not yet known, the future chief executive of the combined company has said.
BF&M has about 240 employees across its offices in Nova Scotia, Cayman Islands, Barbados and Bermuda, including about 100 on island.
Argus has 380 staff spread across offices in Canada, Malta, Gibraltar and Bermuda, including about 150 people on island.
Abigail Clifford, the group president and chief executive of BF&M, said: “As with any transaction, there are likely to be some overlapping roles that create redundancies. We do not have any specific detailed plans in place.
“However, we are committed to treating employees fairly and respectfully and communicating transparently as soon as we have more information to share.
“Importantly, I think this is an incredibly exciting moment for the company and our people. And we see this as an opportunity to provide more enriching and challenging roles.
“This combined entity means more geographic spread. It means a much larger, much more well-rounded enterprise. And we will be creating additional professional development paths for employees.”
She added that the “combination also positions us as an organisation to serve as an employer of choice for top-tier talent.”
Ms Clifford said the merging companies discussed the proposed transformation with the Premier, David Burt, as well as the Minister of Economy and Labour, Jason Hayward, and the Minister of Health, Kim Wilson, plus representatives of the Bermuda Health Council, before Friday morning’s merger announcement.
Further talks with the Ministry of Health have taken place since then, she said.
Ms Clifford said the new company supported the Government’s plan to introduce universal health coverage.
“We have team members that are on various panels and very much in support of universal healthcare. We're working together with government to help as much as we can.”
Alison Hill, the chief executive of Argus, cited a recent Aon global health report that pegged health cost inflation globally at about 10.1 per cent.
She added: “If you then overlay some of the specific challenges in Bermuda in terms of demographics, in terms of chronic disease, and in terms of accessibility of healthcare and the fact that we need to go overseas, then our health cost inflation is above that.
“So both Argus and BF&M have been involved in the consultation process of UHC for some time, and we believe that there is great alignment between our strategic areas of focus and the overarching aims and objectives of government's universal healthcare reform.”
Ms Clifford said the merged company’s “increased scale and buying power will bring improved terms from international providers in the context of negotiating healthcare cost inflation”.
She confirmed that any savings with respect to overseas care would be passed on to the consumer.
“We really do appreciate the Bermudian community's concerns. Without a doubt, we are going to be better positioned with this increased scale.”
She said it is “absolutely business as usual” at both BF&M and Argus in terms of the continued availability of services during the transition to one company.
In a statement on Friday, the Ministry of Health sought an assurance that the merger would not result in increased premiums for individuals and families.
Ms Clifford said: “We're fully committed to continue to work closely and constructively with the Ministry of Health on this critical issue. We do believe this combination provides the scale and resources to mitigate those costs and we greatly appreciate the minister's recognition of the benefits of this combination on a global scale, which is obviously a critical part of the equation.”
However, Bermuda Health Council chief executive Ricky Brathwaite said: “There have been some fairly significant studies done on this type of merger. The evidence points to potentially lower prices paid to providers and higher premiums as there is a lower incentive to pass savings to customers.”
Ricky Brathwaite, chief executive of the Bermuda Health Council, said: “There have been some fairly significant studies done on this type of merger. The evidence points to: potentially lower prices paid to providers and higher premiums, as there is a lower incentive to pass savings to customers.
“Understanding the data and history of these types of mergers, the health council has a significant responsibility to:
• Ensure that provider reimbursement, especially for essential services are fair. This also means monitoring those reimbursement levels on a regular basis and adjusting fair pricing to up to date numbers on economic inflation, care complexity, total utilisation, etc
• Create healthy competition between the commercial insurance market and the public insurance market. There must be investments made into the public insurance products to the point that they are an attractive option for comprehensive coverage to any person or business. If the public insurance market, which can technically be seen as non-profit health insurance companies, can offer great policy options at inherently better prices, this will keep the pressure on the commercial market on pricing and policy innovation
• We also advocate that there be a look at the public insurance market model, to determine if consolidating resources between entities such as GEHI and HID would allow it to be more competitive and responsive to the market. For clarity, there are great examples of non-profit health insurance companies in the US such as Kaiser Permanente, Blue Cross Blue Shield, HealthPartners, and Geisinger Health. Each of those companies focus on affordable healthcare, rather than profit
• To do these things, requires enactment of all of the Health Council functions and the relevant regulations implemented. I noticed some of the comments on the Argus/BF&M story noting statements about the lack of regulation that would allow such transactions to take place in such a small market. Without smarter licensing authority, robust data collection modernisation, better digital infrastructure, and up to date payment model implementation and evaluation, there will always be some major limitations of the health council being able to fully fulfil its mandate
• We are however happy that recent legislative efforts are putting us in a much better position to be supportive of a more fair and cost-effective health system. Remember, the charge of the Health Council is to not only regulate, but to co-ordinate and enhance the delivery of health services for the residents of Bermuda in collaboration with our health professionals and other health system stakeholders
Dr Brathwaite added: “While funding, premiums, and modernisation are important, there has to be the proper regulation of care quality. We do not want to have trade-offs in the quality of care being delivered as a result of corporate transactions.
“The statutory boards, which are made up of health professionals, have to be given the structure and resources to ensure that quality of care across the board is being maintained and enhanced. We can’t expect this work to be done without the proper support, technology, and funding for our health professional leadership.
“This means that no matter what is happening on the insurance side, that we have a healthcare system that delivers good care. If in any situation that becomes a problem, the statutory boards should be able to step in and demand solutions so that patients and their outcomes are always at the centre of our healthcare system.”
Ms Clifford added that individuals with publicly funded health insurance plans would not be adversely affected by the proposed merger.
The transaction requires the approval of regulators across a variety of jurisdictions, including Bermuda, where Ms Clifford said talks with the Bermuda, Monetary Authority were ongoing.
“We've been working with the BMA and other regulators for some months now and we'll continue to work with them. So, obviously, we have initiated that process and this transaction is pending their approval.”
She added: “The BMA has been very thoughtful, very considered. We've been responding to them, you know, making sure that we can deliver what they require. And it's been very positive to date.”
John Wight, the former chairman and chief executive of BF&M, expressed some concerns about the proposed merger.
He said: “From a Bermuda perspective, this transaction, if approved by regulators, could result in less competition, which is often not beneficial for customers.”
Aside from operating in the areas of insurance and pensions, Argus had previously acquired the Island Health Services, and Family Practice Group, medical practices in Bermuda in 2020.
Ms Clifford said it was “too early to indicate what our combined entities health strategy will be” but that the company supported the transformation that had happened with Argus.
BF&M’s office is on Pitts Bay Road in Pembroke, and Argus is located on Wesley Street in Hamilton – but that will change.
Ms Clifford said: “Ideally, I would like everybody to be housed under one roof.”
The amalgamation requires the approval of Argus shareholders, as well as approval by BF&M shareholders on matters including governance changes such as to the company’s by-laws on completion of the amalgamation.
No dates have been set for the two shareholder meetings.
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