On February 10th, the Government of Belize approved a $54 million debt write-off for the Karl Heusner Memorial Hospital (KHMH) patients. This decision aims to alleviate Belizeans’ financial burden.
In an interview, Honorable Kevin Bernard, the Minister of Health and Wellness, stated, “I am proud to announce that our Cabinet has approved the Karl Heusner Memorial Hospital Authority to write off $54 million in uncollected debts from April 2009 to March 2022. This amount includes debts incurred during the challenging COVID years, a time when many citizens faced unprecedented hardships. This is a demonstration of Plan Belize in action. This decision is more than just a financial adjustment; it represents significant and immediate relief for thousands of Belizeans who have struggled under the burden of these debts. By removing these debts, we are alleviating a heavy weight that has hung over our citizens. This initiative reaffirms our government’s commitment to prioritizing the health and well-being of all residents.”
While many are happy about the decision, Chandra Nisbet Cansino, CEO of KHMHA, has stated, “Asking for a debt write-off is not something we take lightly or truly want to do. However, it is an accounting procedure. The approved amount represents receivables from patients that the authority has documented. Over the decades, these patients have received care, were billed, and never paid. Essentially, we are owed by patients who did not settle their bills, and the hospital must manage these accounts, which incurs costs. We have personnel in the collections unit actively pursuing these collections, which requires resources from the hospital.”
Cansino further explained that historically, there used to be a bailiff to collect these debts, and around 2015, a collection agency was hired for the same purpose. “Unfortunately, neither approach yielded significant results; only a little was collected here and there. The resources spent trying to collect these debts far exceeded what we were able to recover. This situation has affected the authority’s ability to provide services and meet operational costs, which is why this financial action has been taken,” said Cansino.
While it is uncommon for organizations to request a write-off, it is not unusual to take such action for debts deemed uncollectible. “We must recognize that many of our patients are often indigent. For instance, someone might suffer a heart attack and come to the hospital for emergency care. When a patient arrives at the emergency room, no one asks about their political affiliations or salary. If they require a week in the ICU, they are discharged without the means to pay their bill. This is just one example of why the debt write-off is strictly a result of uncollectible debts,” said Cansino.
This decision provides immediate financial relief to thousands of Belizeans who have struggled to pay medical bills, particularly during the COVID-19 pandemic. It is part of a broader healthcare reform initiative aimed at making healthcare more accessible and equitable for all citizens, as outlined in the Plan Belize Initiative.
While the government of Belize works to ease the lives of Belizeans through this debt relief initiative, the country has a history of accumulating large debts. When the current administration took office in 2020, Belize’s debt was 132% of its Gross Domestic Product (GDP). In just over three years, the government has halved the country’s debt as a percentage of annual GDP. In 2021, Belize executed a debt conversion for marine conservation, which reduced its debt by 12% of GDP. This initiative was a collaborative effort between The Nature Conservancy (TNC) and the Government of Belize, resulting in a completed debt conversion valued at USD 364 million for marine conservation. Through a “Blue Loan” arranged by TNC, Belize was able to repurchase USD 553 million of its debt from bondholders at a 45% discount, which led to a USD 189 million reduction in the principal outstanding.
Belize’s economy, heavily reliant on tourism, experienced a contraction of 16.7% in 2020 due to the COVID-19 pandemic, causing the debt to surge to 133% of GDP. Despite these challenges, the International Monetary Fund (IMF) projects that Belize’s GDP will expand by 3.5% this year. They also forecast that the unemployment rate will remain at 3.4% over the medium term, with inflation decreasing to 3.1% and 1.3% in the following years. Moreover, the IMF anticipates a further reduction in the debt-to-GDP ratio, expected to drop below 60% by 2028, along with a positive primary balance for the national budget over the next five years.
 patients.){kind=link}