Competition commission healthcare inquiry private sector Dr Humphrey Zokufa BHF Managing Director Dr Rajesh Patel BHF Senior Manager 1 st March 2016 Outline Introductory Remarks ID: 552273
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Slide1
Board of Healthcare Funders of Southern Africa
Competition commissionhealthcare inquiry – private sector
Dr Humphrey Zokufa
: BHF Managing Director
Dr Rajesh Patel
: BHF Senior Manager
1
st
March 2016Slide2
Outline
Introductory Remarks Consequences of “no price regulation” of healthcare services in the Private Healthcare Sector. Costs and price of service remains a problem!
Healthcare
Accountability
Overspending
on underwhelming health outcomes
Concluding
Remarks
Slide3
Introductory Remarks
BHF, previously RAMS, is a non-profit company – representing medical schemes, managed care organizations and administrators of medical schemes.Membership in South Africa, Zimbabwe, Namibia, Botswana, Swaziland, Mozambique and Lesotho.The Competition Commission fined BHF in 2003 for anticompetitive behavior.
In September 2007 BHF applied in terms of section 10 of the Competition Act No. 89 of 1998,for an exemption to the Competition Commission from the provisions of the Competition Act –
denied.
In November 2012, BHF requested an advisory from the Competition Commission determining whether or not section 4 of the Competition Act, 89 of 1998 is applicable to restricted schemes –
advisory not very helpful.
BHF engaged the late Minister of Health,
Dr
Manto
Tshabalala
–
Msimang
on various occasions regarding the inability for the funding industry and providers to negotiate tariffs.
In September 2007, the Minister convened a “Health Indaba” in
Midrand
to address this issue.
An amendment was made in the National Health Act, by inserting a chapter that was obligating the negotiations –
unfortunately it was not processed by the Portfolio Committee on Health
.
BHF engaged the current Minister of Health, Dr. Aaron
Motsoaledi
on this issue -
establishment of this Commission of Inquiry into the Private Healthcare.Slide4
Private Healthcare
Funding
83
Medical Schemes
8.8
Million
members
R140.2
billion R124.1billion payment (88.5%)
Providers of Healthcare Private Hospitals Medical Specialist General Practitioner Pharmacists Nurses Physiotherapists Allied Health Traditional Healers
Healthcare Products Pharmaceuticals Medical devices Surgicals Medical Equipment
SA Constitution
Investors
Investors
Government Healthcare Policies
Legislation
Medicine and Related Subst ActNational Health ActMedical Schemes ActPharmacy ActNursing ActHealth Professions Act Traditional Health Pract. ActCompetition ActConsumer Affairs Act
ContributionsSlide5
Consequences of “no price regulation” of Healthcare Services
–
Scene 1
Operating results of Medical Schemes
2005/2006 R356.2million deficit
2006/2007 R2.1billion deficit
2007/2008 R992million deficit
2008/2009 R929million deficit2009/2010 R2.5billion deficit2010/2011 R459million deficit2011/2012 R1 billion surplus2012/2013 R25.7million surplus
2013/2014 R1.55billion surplus2014/2015 R464.5million deficit Slide6
Consequences of “no price regulation” of Healthcare Services
–
Scene 2
Operating results of Medical Schemes
2005/2006 R356.2million deficit
2006/2007 R2.1billion deficit
2007/2008 R992million deficit
2008/2009 R929million deficit2009/2010 R2.5billion deficit2010/2011 R459million deficit2011/2012 R1 billion surplus2012/2013 R25.7million surplus
2013/2014 R1.55billion surplus2014/2015 R464.5million deficit Slide7
Consequences of “no price regulation” of Healthcare Services
–
Scene 3
Operating results of Medical Schemes
2005/2006 R356.2million deficit
2006/2007 R2.1billion deficit
2007/2008 R992million deficit
2008/2009 R929million deficit2009/2010 R2.5billion deficit2010/2011 R459million deficit2011/2012 R1 billion surplus2012/2013 R25.7million surplus
2013/2014 R1.55billion surplus2014/2015 R464.5million deficit Slide8
Consequences of “no price regulation” of Healthcare Services
–
Scene 4
Operating results of Medical Schemes
2005/2006 R356.2million deficit
2006/2007 R2.1billion deficit
2007/2008 R992million deficit
2008/2009 R929million deficit2009/2010 R2.5billion deficit2010/2011 R459million deficit2011/2012 R1 billion surplus2012/2013 R25.7million surplus
2013/2014 R1.55billion surplus2014/2015 R464.5million deficit Slide9
Consequences of “no price regulation” of Healthcare Services
–
Scene 5
Operating results of Medical Schemes
2005/2006 R356.2million deficit
2006/2007 R2.1billion deficit
2007/2008 R992million deficit
2008/2009 R929million deficit2009/2010 R2.5billion deficit2010/2011 R459million deficit2011/2012 R1 billion surplus2012/2013 R25.7million surplus
2013/2014 R1.55billion surplus2014/2015 R464.5million deficit Slide10
Consequences of “no price regulation” of Healthcare Services
–
Scene 6
Medicine Price Regulation Slide11Slide12
Healthcare AccountabilitySlide13
What is your business?Slide14
Section 27 and Section 28.1.c(Child)
1) Everyone has the right to have access to a. health care services, including reproductive health care; b. sufficient food and water; and
c. social security, including, if they are unable to support themselves and their dependants, appropriate social assistance.
2
)
The state must take reasonable legislative and other measures, within its available resources, to achieve the progressive realisation of each of these rights. 3) No one may be refused emergency medical treatment. Slide15
MSA “business of a medical scheme” means the business of
undertaking liability in return for a premium or contribution—(a) to make provision for the obtaining of any relevant health service;
(
b
) to grant assistance in defraying expenditure incurred in connection with
the rendering of any relevant health service; and
(
c) where applicable, to render a relevant health service, either by themedical scheme itself, or by any supplier or group of suppliers of arelevant health service or by any person, in association with or in terms ofan agreement with a medical scheme;Slide16
MSANot explicit
that the business of MS must be to improve healthcare of the beneficiaries, or in pursuance of the constitutional mandate!Medical scheme are quasi insurance currently regulated by CMS (not FSB) but report to Minister of health
“insurance” thinking perpetuated since the
Melamet
inquiry (late 80s)
“catastrophic cover” and “discretionary expenditure”, new terms from 90s
Inadequate stewardship/leadership about what the business of MS should be.
Need for “health governance” to be included in the definition Slide17
“Insurance” thinking evident in current problematic PMBs
Discriminatory and poorly structured!Diagnosis and severity based (ill-defined e.g. life threatening)
Limited
set of
conditions DTP/CDL
Hospicentric
, adult focus, women’s health…
No formal policy document with inclusion and exclusion criteriaNot developed with the Access to Care, or Health of beneficiaries in mind!Developed with Insurance (financial protection) in mind.Focus on depth of benefit for the few rather than breadth of benefit for most MSA Reg 7: CDL is not PMB (benefits in the spirit of the regulations)Error: brought to the attention of CMS in 2006; advice continues to be ignored. Slide18
“Insurance” thinking evident in current problematic PMBs
Regulated benefit with regulated price is required for certainty!CMS Current Reg.8 interpretation: unintended limitless liability
Lack of price certainty make PMB less affordable, particularly for lower income earners (No income cross
subsidy!)Slide19
SuggestionsPMB: Non discriminatory: service based not diagnosis based
Define “essential” services e.g. Essential Drug ListUrgent revision of the MSA and its Regulations to align with Section 27/28 and other progressive government health policiesPMBs has not been reviewed!
Stewardship:
N
eed health governance to be included!
CMS Circular
15 Of 2016: Publication Of The Healthcare Utilisation Data Specification Document For The Utilisation Section Of The Annual Statutory ReturnSlide20
Health GovernanceIdentify health NeedsEnsure health services/benefits for the needs
Actions and programs for prioritiesMonitoring and EvaluationInterrogation and Accountability (RP)Slide21
Overspending on Adverse Health OutcomesSlide22
Health Inquiry submissions:“High utilisation” and “burden of disease”
Appears to be some level of Ignorance!Probably accountant, lawyer or actuary interpretation of dataAdverse health outcomes!
Supplier induced demand!Slide23
Is healthcare cost a problem?StatsSA
Medical inflation CPI + 4.3% (
2009-2013
)
Health insurance of Household Expenditure
3.4% (2006-2007)
7.2% (2010-2011
)±10% 2015 (unconfirmed)Overspending beyond levels of affordability!Slide24
Hypertension (HQA 2015 and earlier)(underutilisation of essential care and rising adverse outcomes!)
2010
2011
2012
2013
2014
Creatinine Coverage%
383941
4345Cholesterol coverage %3433363637ECG coverage %2221212020Glucose screening %434242
Stroke admission per 10003.53.610.610.511Approx. 250,000 undiagnosed/unregistered!Slide25
Newborns (HQA 2015)LBW (<2.5kg):
5%13% of newborns admitted to NICUSick society (burden of disease) or very poor Maternity servicesSupplier induced demand
ICU fees and modifier 0019
CMS chaos related to mod 0019!Slide26
C Section(HQA 2015):
72% Additional R0.5B+ to hospital costs
10%
Paying for convenience & preference!
Lack of alignment to guidelines!
Hb
: 83%
HIV: 38%
Hep B: 30%Slide27
Maternity: RVU increased (2015)
Puerperium period reduced from six weeks to four weeks!
282
267
Approx. 100% increase!Slide28
Depression (HQA 2014):
2010
2011
2012
2013
Depression - lives
admitted per 1000
5.8
5.89.18.5Depression - 10 day post discharge %2.12.52.22Depression - 30 day post discharge %
6.46.45.75.3Slide29
Access to essentials medicines:
Inadequate health governance throughout the value chain! Finance centric rather than health centric!
2010
2011
2012
2013
2014
IHD
Aspirin Cover %6157636260Statin coverage %6759595958Diabetes I & IIStatin coverage %4034353738Cardiac FailureACE/ARB Cover %
6562606059Source: HQA 2015 reportsSlide30
Diabetes outcomes (HQA 2008)2007 claims
LL Amputation rates FFS vsCDE 11xHyperglycaemia adm FFS vsCDE: 33x
Pockets of excellence in
centers
of excellenceSlide31
Concluding Remarks
Pockets of excellence!Underspending on essential healthcare!Overspending on adverse outcomes & “wasteful events”!Need stewardship. Transform thinking about the business of Medical Scheme.
Urgent need for regulatory reform.