Failures revealed at CINICO

| 24/05/2012

wasted-money.jpg(CNS): In one of two reports released by the auditor general on Wednesday Alastair Swarbrick pointed to shocking failures in the management of government’s health insurance company and a plethora of weaknesses that put public money at risk. An audit report into CINICO, “Management of Overseas Medical Services”, revealed that the $30 million of public money spent each year on overseas medical care was not being properly controlled. From managers appointing case management firms without the company or board’s knowledge to a paucity of documents to show how CINICO manages overseas cases, the report reveals a catalogue of poor governance, leaving public money and the government owned company at risk of abuse.

Although Swarbrick said his office was unable to determine the amount of overspending, how much public money has been wasted, or conversely what could have been saved under better management, he was concerned that it was a significant amount. He also noted that while he did not see any evidence of direct misappropriation, given the lack of proper processes the system was vulnerable to corruption and abuse.

Speaking at a press briefing on Wednesday, he explained that the audit covered a two year period from May 2009 until April 2011 and revealed a number of significant weaknesses in the operations of CINICO. The audit pointed to the failure of CINCIO officials to attend key meetings intended to ensure the effective management of overseas cases, a lack of evidence that CINICO was ensuring the case management company was carrying out its key responsibilities to avoid overseas medical costs, and a lack of good governance practices in place.

“I found CINICO did not have sufficient management and board practices that would have ensured expenditures relating to overseas medical services were being effectively controlled,” Swarbrick said. “In several individual cases, I could not find evidence supporting decisions taken that would have ensured cost effective patient care.”

The audit identified a number of wider issues concerning good governance which created an environment of increased risk, including the absence of a strategic plan and no identified goals or performance measures. The board had not approved any kind of plan since 2005.

One of the most significant criticisms by the auditor was a management decision to engage a second case management company in contravention of the exclusive contract held by the first firm and without any authority. The auditor said this raised a number of questions which it was unable to answer as there was no documentation and Swarbrick said the former manager would not cooperate with the audit.

Despite his concerns about the failure of CINICO to manage the significant spending in the past, Swarbrick said the new management team and board had demonstrated a willingness to take action to address the report’s recommendations.

Responding to the report on Wednesday afternoon, CINICO management said it was in general agreement with the findings but with the appointment of a new CEO in December 2010 many of the auditor general’s recommendations were now being implemented. It also stated that safeguards were in place to manage medical services but it was poor record keeping that was at the heart of the problem.

“While we do recognize the areas needed for improvement, we would like to point out that … practices were in place that managed medical services rendered, however they were not documented properly … that would allow for comprehensive review,” CINICO stated.

See full statement from CINICO and the AG’s report below.

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  1. Len Layman says:

    Plain and simple, our current system of health care encourages the quick passing of the elderly.

    Adequate health care is not considered a right. It is a privilege that decrease after you reach retirement age.  At that point, just when your needs are increasing your coverage decreases.  It is wrong and inhumane.  It is a burden on the families and government.  It is disgracing our elderly and needy.

    Healthcare is run as a profit item now. 

    It is basic human right or should be.

  2. Anonymous says:

    the incompetence of the cayman islands government and the civil services never ends…….

    direct rule please!

  3. Chartered Insurer says:

    One of the huge bits of mismanagement was not mentioned in the article. One of the largest costs an Insurer faces is their Reinsurance. This supposedly went out for 'public tender'. Tender documents were to be obtained from the holding reinsurance broker and tenders submitted to them. Where else will you submit a tender to the party you are competing against for the award of the tender? It is the services of the reinsurance broker that is being tendered. there are many different appraoches to reinsuring any insurance portfolio. so there was a very real chance of getting a broker who could offer a more relevant or cheaper product. We will never know because of the illegal/immoral way the tender was conducted.

  4. Anonymous says:

    CINICO, MOSTLY BASED on political directives,

    and we continue to wonder why the losses,

    political agenda here, caus we r paying!

    check out how they get qualified,

    most did not even go to "C"

  5. Anonymous says:

    The former CEO that wouldn't cooperate with the audit was Carol Appleyard.  She left CINICO and became a 'consultant' for AIS who is the company she and the CINICO board bought the expensive new computer system from.  Maybe the audit general needs to look at that too!

  6. Anonymous says:

    The WHOLE concept of CINICO needs to be abolished. An overpaid CEO, overpaid CFO, overpaid staff yet one trip to the doctor on their famous SHIC plan and your benefits are eaten up for an entire year. Just like cell phones, make the policy portable. If i want to pay an additional premium to see a private doctor then i should have that ability. I DO NOT use the doctors at the hospital and I have now also stopped getting my prescriptions there as most times you get an "off-brand" or the pharmacy is out of stock. CINICO just like the asphalt in the Brac is a complete, total and utter waste of government resources. I propose that it be shut down to coincide with the next government budget year. This madness must stop!!!

  7. Anonymous says:

    Wait a minute if this started in may of 2009, everybody there most likely would have been there under the PPM…Let share the wealth here? Someone call up the PPM!

    • Anonymous says:

      Why does everything have to be about PPM vs. UDP? Can't we resist poor governance without it being a partisan political issue?

  8. The lone haranguer rides again! says:

    If the lavish public servants pension scheme does not break this country the no limits lavish health care system they have will finish us off.

    Let not go down the road of the no brains live in a fantasy European country’s and stop the Welfare State now!

  9. Libertarian says:

    Reading the comments below, just proves to us that government is not capable of effectively running a pension or insurance program (and never was), and like one commenter said before, "govt employees shouldn't be FORCED to have 'coverage' with CINICO. Don't get me wrong, CINICO is great under life threatening emergency situations, but that's it." A private company with no ties to government would do a better job. Leave people alone and let them choose for themselves their own care, way of payment, and doctor!

  10. Knot S Smart says:

    I have found Cinico to be better than most private insurers in my time of need and overseas treatment.

    Of course there are limits to how much they will cover and pay, and rules to be followed, but that is the same with every insurance.

    All of the employees there have been professional in any dealings that I have had with them.

    Of course there is room for improvement as acknowledged by the Cinico management.

    I suggest that the plan be extended to all persons living on the island and not just those that are low income or that are denied insurance by other insurers. How will they be expected to make a profit if they are not allowed to insure young healthy Caymanians?

    There is also a need for coverage for visits to other local doctors and overseas services to Cuba, and other less costly regional medical facilities, to be covered by the the Cinico policy.

    Unlike other Govt Departments and Govt owned companies – Its nice to see their positive reaction to the AG Report!


  11. Spottsurfer says:

    Lavish landscaping explained? The health insurance industry here (and elsewhere) is nothing more than a governmentassisted scheme to defraud policyholders through excessive premiums.

  12. Anonymous says:

    My stepmother before she past away and father had cinico. My stepmom went to look at a seasonal problem to see a specialist in Miami fla. to get a growth that grew in the bottom of her foot  cut out. It would grow constantly and when it grew too much she would have to get it cut out she was 79 years. While in miami they where trying to find out more info about the growth cause she got it while waliking around the front yard of their house barefoot. The doctor decided to do some exams and tests . They declared she was starting to have other problems and it finally needed a triple heart transplant  a hole in her colon other infections months in hospital while other things started to go wrong. While place all the way in tampa for recovery she succumbed to her death. She was in hospital over 4 months. She was born in Grand Cayman but was a US citizen 80% of the bill was paid by medicare 20% of the bill was sent to Cinico in which they responded we can't pay that cause you all didnt tell us you were going to miami to have a triple heart bypass?? Well guess what it was a surprise to us also. Why shouldnt we be able to sue for the ins co not paying the bill . We had insurance by their co. I mean what a load of corruption. How dare they get away from not paying this bill .Can or would you do a triple heart bypass in Cayman ?? Then wouldnt you still get permission from CINICO anyway??  

    Ths is like them allowing younger people to get the higher paid plan when they know a larger percentage wont need it till they are older. Thieves, robbers with an open licence to steal from a captive audience!!

  13. Anonymous says:

    Can we please have someone with a nice personality and not a terrible attitude sit at the front desk at CINICO when we go in to pay our premiums? I am paying my money so they can get a salary, and every time you go there it's as if you owe them something. Get rid of bad management and also bad attitudes, and one more thing the buzzer, they can see you and yet you have to wait 1/2 hour before they open that door. Disgusting!!!!!!!

    • Weary Caymanian says:

      Absolutely right – the front desk reception has the worst bad attitude – this girl thinks she is doing  a favour to people coming in to pay their premiums.

      • Anonymous says:

        It is amazing how everyone of you rate a comment. I bet my life, not one of you know who that girl is!

        • Anonymous says:

          17:40, No Bobo, I don't know who the girl is but I can tell you when I went in there the other day to ask a simple question she stared at me with unsmiling discontent as if daring me to bother her with a request. She was uncaring and unhelpful. Sorry, but that is how it was.

      • Anon says:

        While I agree that CINICO is a white hot mess, I have never once had problems with the receptionist. I actually feel bad for her. She seem to be very efficient to me. Despite the constant rudeness she is faced with from customers unhappy with a mismanaged, bloated, government entity, over which she has no influence, she seems to process the customers quite quickly.

        Just think, one person to deal with a hundred plus irritated people, using a pre-Columbian ‘computer’ system, with nothing but complaints all day long. Half the time the computer doesn’t work, and they give carbon paper receipts, ala 1970. The issue lies much higher up then the front line staff.

  14. Retired ....non-civil servant!! says:

    This  may be "off" the actual subject of governance re CINICO; but strictly discussing HealthCoverage for the Elderly.

    We are insured with CINICO; we are both over 65 years of age. my husband has the Silver # 1 plan – I have the Silver # 2 plan )

    My husband had a heart-attack ( shortly before he turned 60 Y ) and was "down-graded" afterwards by his previous health care insurer to minimal coverage of $ 25,000.- per incident.  We joined  CINICO Health Insurance's Silver plan as allowed.

    My husband had a diabetic incident the following year and I was told when applying  to upgrade to the $ 100,000.- per incident, ( at the allowed time ) that CINICO would NOT upgrade him since he had used up "all" of the allowed  of $ 25,000.- the previous year, while in the hospital regulating his diabetic issues. However they would upgrade me to the higher amount ( per incident ) since I had NOT been ill (??!!)  

    I applied again for my husband to be upgraded last January  ( after being a client for over 2 years ) I sent his application with scanned forms attached  via email to CINICO and requested an acknowledgement that same was received 3 times….I got NO reply!!!  

    We pay for both of us at present over $ 600.- per month, I agree that is not a high amount for a health Insurance. However in the case of not being a Civil Servant….CINICO ( for SILVER number 1 or Silver number 2 ) is actually only a limited  HOSPITAL Insurance, as they do not pay for any tests when one is an out-patient, and 80% of ONE doctor's visit / check-up or other / per year….all medication has to be paid by the patient…..if NOT in the hospital.  

    Insulin for diabetic patients are very high, ( out-patients ) not considering other medication if needed; that cost alone can not be afforded by most Elderly  ( if not a Civil Servants as theirs is free )  

    The CINICO Insurance when one is admitted to hospital will be used up within one or two weeks if various detailed tests are needed; ( if $ 25,000.- only per incident )  my husband has not been in the hospital again, he is a diabetic and we pay for all medication anyway, I shall again provide CINICO in January ( the month- time allowed to apply or upgrade after being insured a specific time ) with an application to upgrade which by then if the Insurance premium is not higher will cost over $ 800.- per month for both of us……that is JUST to have the so-called CINICO HOSPITAL Insurance …..and  it pays in some incidents only 80% not even full coverage while in the hospital.

    Now please go further if some-one needs weekly treatment where will that leave any elderly insured person?

    After paying privately  much more then one hundred thousand for overseas (  only minimal care at a Miami hospital ) more then two years ago, we shall be paying the rest owing to the Cayman Health Authority ( monthly ) until the day we pass over to be with the Lord //  

    You may have a higher Cinico (* Hospiatl ) Insurance if you have not been ill, otherwise you will have the minimum and hope nobody approaches you while in the hospital and ask HOW you are going to pay afterwards since your "Loved" one has used up more then allowed…..YES that also happened to me when my husband was s till in the GT hospital… a time when he was seriously ill I was called to the hospital accounts office.

    Yes we are Caymanian / oh in case you ask , Cayman Status holders; having lived and worked here over 35 years, ( yes we "did" train Caymanians in our profession during our working time here )  we invested,  we care for our fellow man, in short " we  feel as any Caymanian, that we belong. 

    However the time and day may come that we feel it is not safe ( meaning protected through health insurance ) as a non-Government retired person to live here. 

    How many of the elderly Caymanian person's therefore will feel the need to ask for what so many call Gov.-Welfare, while they will have no other choice, even if they worked all their lives, own a home that they may lose paying off medical bills (??)  

    Don't you feel that this subject needs more attention then many of the grievances aired here? How will you take care of Your Elderly with dignity in years to come?

    • Uncivil Servant says:

      We are relying on our pension fund to take care of us in our golden years.

  15. Anonymous says:

     as stated in report  …. The board of directors are ultimately responsible for the management and financial operations of CINICO.

    who were the directors?

    • Anonymous says:

      I absolutely agree. Who are the directors and are they taking an active interest in the workings and governance of the Company? The auditor general making the comment that management is taking an active interest in correcting the deficiencies is nothing more than the usual lip service by management and the Board. There is no other response for them to make without sounding absolutely culpable. The pubilc should not be fooled by expresions of "taking an interest " or such other platitudes by the directors or management

  16. Truth says:

    More corruption and incomptence.   What will it take to set the house of Cayman right?  Just keep watching as it all circles the bowl.  You can't clear the air until it all gets flushed away and there is nothing left.  This is the way of all failed cultures.

  17. Anonymous says:

    Ineptness and/or dubious practices at every turn. The British are coming! The British are coming! 


    Paul Revere Ebanks Bodden

  18. Anonymous says:

    Wasteful spending of public funds, illegal paving, drunken Ministers and bureaucratic conspiracies.  And yet it is the expats who are ruining this country.  Seems to me you are doing fine just by yourselves.


  19. Anonymous says:

    Refreshingly positive response from the new CEO & management – contrast with theMinistry  response to the Cayman Brac private paving audit – but who was the former manager who refused to cooperate with the audit?? Name and shame time

    • Anonymous says:

      I hope that the nw management will get on top of th customer service situation at Cinnico.  For years there has been poor responsiveness to customer needs — no apparent follow up, no returnining of phone calls, and a poor attitude when these matters are raised.  True, this is typical when a company has a monopoly — but it would indeed be "refreshing" if the new management would try to change that.  

      And by the way, I am still waiting for the new mandatory re-issued card —  I keep checking, always some issue — and have never received a call or any communication to let me know what's going on with this card.  I am not holding my breath.

    • anon says:

      Carol Appleyard

    • Anonymous says:

      Who was the former CEO and is the individual still in CIG employment?

  20. Slowpoke says:

    I am confident that Ezzard and Gilbert will take full responsibility next "Super Tuesday", when they admit that the insurance plan they devised, was fatally flawed from the beginning.

    Between this, and the number of un and under insured in the private sector, they have a lot of apologizing to do, which is what they do best.

    • Anonymous says:

      @ Slowpoke: Since when did you hear Ezzard or Gilbert apologizing?! The way they go on, they have nothing to apologize for, since their hands are as clean and their hearts as pure as McKeeva’s! How the hell did we go from an era when we had intelligent people like Capt. Charles, Vassell johnson, Truman Bodden, etc, representing us, to this bunch of blithering idiots!

      • Slowpoke says:

        Of course I know that they will not apologize.  It has become part of the political playbook worldwide, that a politician (with a very few exceptions) never apologizes.  Their total inability to admit to mistakes or errors in judgement, which the rest of the population knows is human, makes them so suspect and dislikable.

  21. But Wait! says:

    Does this mean there is no school tomorrow? I know I for one is not sending my children to no school to slip down if I can’t rely on CINICAL to cover thems medical tings.

  22. Anonymous says:

    OMG! When will it stop!!

    • Truth says:

      When the UK finally takes over.  Cayman………Incompetence is thy name.

  23. Anonymous says:

    "…the lack of proper processes the system was vulnerable to corruption and abuse."


    No wonder that the powers that be are reluctant to embrace good and ethical governance.