By Constantinos Psillides
THE International Monetary Fund (IMF) favours postponing the full implementation of the National Health Scheme (NHS), according to an internal note by the Health Ministry, proposing instead a gradual implementation so as not to burden the fragile economy.
The IMF’s report explored the financial implications of implementing the NHS until 2016. Health minister Petros Petrides referenced the report when he announced on February 18 that the NHS would be further delayed.
The report is an updated look at a similar report issued by financial services consultants Mercer, which was released in September 2013. The Mercer report concluded that an express implementation of the NHS would save the state €292m and that the contribution by the taxpayers would be “marginal”.
The IMF report, published by daily Politis, estimates that the cost of fully implementing the NHS until 2016 is equal to 2.5 per cent of GDP, which amounts to around €900m, not €510m projected by the Mercer report.
The IMF report points out that to cover the cost, the state would probably have to increase hospital fees, which they expect to have an extremely negative effect on public opinion.
The IMF also said if the state increased taxes to cover the funding needed, it would cause frustration among low-income earners.
“Implementing the NHS is a difficult process so enough time must be allocated for the procedure to be concluded effectively. Rushing the implementation would probably jeopardise the effectiveness of the whole system,” the report said.
The report suggests giving enough time to the Cyprus state to restructure state hospitals and establish a clear and comprehensive payment system, mapping out a payment plan for doctors and applying necessary software.
The IMF report said that compared to other countries Cyprus has a relatively high level of medical services, noting though that waiting lists are unacceptably long and there is a lack of coordination among government health services.
Cyprus is the only EU member without an NHS. Implementing one was part of the deal the government signed with the troika of international lenders (including the IMF) as part of the bailout agreement last year. Under the deal, Cyprus was supposed to offer a national healthcare scheme by 2015.