A $330 million cash pot is expected to be handed over to the Bermuda Hospitals Board as the Government signalled a new approach to payment for healthcare.

The block grant will replace the former “fee for service” method.

Kim Wilson, the Minister of Health, told the House of Assembly that it was recognised around the world that the fee for service arrangement was “not the most effective and efficient mechanism”.

She was responding to questions from Jeanne Atherden, a One Bermuda Alliance MP, who wanted clarification on a projected $20 million saving in hospital healthcare costs.

Ms Wilson said on Monday: “It is correct that the Government is committed, as we indicated in our Throne Speech, to addressing the unsustainable cost of rising healthcare.

“During negotiations with the Bermuda Hospitals Board we were able to discuss an alternative mechanism for paying for their services.”

She added that the change was expected to result in a $20 million saving in healthcare costs this year.

Ms Wilson also responded to a question about notice of a moratorium issued recently by the Bermuda Health Council.

The memo advised healthcare providers of a freeze on new applications for services under the standard health benefit, which is the most basic package that must be supplied in all insurance policies.

She explained that if access to care for essential services was “identified as an issue in the interim”, the BHeC would seek specific applications provided the changes did not affect the standard premium rate.

Ms Wilson added: “This moratorium, as has been indicated earlier, is until we have collaborated to determine what will be included in the new standard health benefit package to best address our health needs and we anticipate the new package to be discussed and redesigned over the next few months.”

She said the information would be shared with MPs and the public.