NHF to the rescue as health ministry seeks to reduce debt to creditors

Published: Sunday | December 15, 2013 Comments 0

Erica Virtue, Senior Gleaner Writer

With private suppliers up in arms about the amount of money owed to them by government-run hospitals and health facilities, the Ministry of Health is looking to the National Health Fund (NHF) to reduce this charge.

While admitting that the suppliers are owed millions of dollars, Health Minister Dr Fenton Ferguson says the Government expects to lower its cost with the NHF playing a more significant role in the sourcing and distribution of pharmaceuticals and other goods to hospitals and health facilities.

According to Ferguson, the new arrangement will see some services moved from the Ministry of Health with a view to providing closer monitoring of goods and services to the sector and control costs.

"They will start roll out in January (2014). That's an announcement, and our expectation as it relates to pharmaceuticals is that we will be in a much better position, because we are also coming with a Government of Jamaica card, which will be a unique card using your Taxpayer Registration Number," Ferguson told The Gleaner/Power 106 News Centre.

Complaints from suppliers

The health minister was speaking against the background of complaints from suppliers that they are owed millions and the date for their payment has become a moving target.

One supplier, who is owed a significant sum, complained that his bill is climbing and the ministry expects him to continue supplying the hospitals and health centres.

The supplier noted that he, too, must pay creditors who are on the verge of refusing to offer him credit.

While understanding the plight of the suppliers, Ferguson said the introduction of the NHF should be a game-changer.

"It's a challenge. It has been a challenge for all administrations. We have always had suppliers being owed 30 or 60 days, or whatever the period may be," said Ferguson told.

In explaining how critical the situation is, he said the ministry's recurrent budget, which includes payment for suppliers, is $32 billion.

"Most of that $32 billion, I would argue, probably 70 to 75 per cent, is for payment of salaries. So when you finish with that, you talk about how you deal with others.

"As it relates to things like pharmaceuticals, it's gonna get better because there is a game-changer coming."

The Auditor General report of March 2012 showed the Ministry of Health with $1.3 billion owed to creditors.

Of that sum, $607 million was outstanding for more than 90 days - in the South East Regional Health Authority alone - which, according to reports, was a breach of the Financial Administration and Audit Act.

In the North East Regional Health Authority at March 2012, $200.8 million was owed to creditors, with $88 million outstanding for more than 90 days.

But Ferguson was adamant that the creditors will be paid.

"The Government still remains the biggest business and, therefore, even though we have challenges, persons know that even though you are owed by the Government, it might take long, but it is a debt that will be honoured," declared Ferguson.

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