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Haroon Wadee
Head: Health Systems & Policy
BHF
Trends in Specialist Costs
2005/2006
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Annual increases to providers
Remuneration = Volume X unit price
% %
Funder perspective
Provider perspective
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Which is the correct perspective?
¿
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CMS 2006 report
• Specialist payments continue to climb
• Hospital payments levelling– ? Dispensing fee & SEP
• Verifiable pattern in BHF 2006 KPI report (in press)
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Medical specialist cost trends3 administrator’s data aggregated
0
200
400
600
800
1,000
1,200
1,400
2000 2001 2002 2003 2004 2005 2006
Mill
ion
s
1. PMB
2. 8%NHRPL
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Payment trends of some disciplines for a administrator
0
20
40
60
80
100
120
2000 2001 2002 2003 2004 2005 2006
Mill
ions
GYNAECOLOGISTS
ANAESTHETIST
PHYSICIAN
ORTHOPAEDICSURGEONS
SURGEONS
PAEDIATRICIANS
? ICD10
?Spesnet
Millions
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2005/2006 % Payment Increase by Administrator
14
32
19
36
23
35
20
30
05
10152025303540
Anaesthetist Psychiatrists
%Admin 1 Admin 2 Admin 3 NHRPL impact
•Result of SAMA participation in NHRPL!
•? Some science behind NHRPL process
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2005/2006 % payment increase for other specialists
6
22
11 10
30
133 5
14 15 1712
31
8
19 1819
34
1813
47
1319
11
01020304050
Admin 1 Admin 2 Admin 3
6.3% impact expected
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Key issues currently exploring
• Policy and economic analysis of specialist cost increases in South Africa– Contextual analysis (historical, political-
economy & health system landscape)– Economic analysis – agency theory & moral
hazard– Preliminary stakeholder analysis
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Funder Perspective• Key issue emerging is that of allocative inefficiency in
service provision.– Potential to off-set any efficiency gains from other policy
interventions– Potential to undermine cost-containment overall, impacting on
ability to increase access to medical aid market and in BBP context to widen the scope of benefits
– Efficiency relative to GEMS – exploration of issues – large risk pool, high employer subsidy, access of previously uninsured (or shifting of current insured)
– Sustainability of current schemes environment important factor – but also the future – LIMS and SHI
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Remedies
• No Golden Rule
• Political pressure on SAMA with close engagement with NDOH, CMS and media
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Key Messages
• Increases above NHRPL impact• Increases above CPIX• Increases above economic growth• Increases above employment growth• High increases – Paediatrics and O&G –
undermines ability to meet UN MDG’s and SA’s overall health system performance and ranking
• Obstacle to LIMS and eventual transition towards SHI
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Remedies
• No Golden Rule• Political pressure on SAMA with close
engagement with NDOH, CMS and media• Medium-term – review experience of
financing/service-delivery models that have demonstrated affordable and quality service delivery.– To inform strategy
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Traditional financing-services flows
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Flows (with co-payments and out-of-pocket expenditure)
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Member (consumer) Perspective
• Increased rate of co-payments and/or out-of-pocket expenditure– Equity consideration – regressive nature of
OOP– Relationship between consumer and scheme
under spotlight with fragmentation of trust – tilting scales in favour of providers
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Remedies
• Improved communication to members to address information asymmetry – ongoing
• Engagement with CMS
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Force-field analysis vis-à-vis NHRPL Process
<<<<<<<<<<<< <<<<<<<<<<<< <<<< >>>> >>>>>>>>>>>> >>>>>>>>>>>> NDOH CMS HPCSA Board of Healthcare Funders Medical Aid Schemes
Private hospitals SAMA
Private providers Consumers
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Key issues currently exploring
• Policy and economic analysis of specialist cost increases in South Africa– Contextual analysis (historical, political-economy &
health system landscape)– Economic analysis – agency theory & moral hazard– Preliminary stakeholder analysis
• Diagnosis and procedure coding– Coding creep? – CPT4 vs ACHI vs ICHI – design and implementation
impacts
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Thank You