Board of Healthcare Funders of Southern Africa 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 • 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
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.
Contributions Investors Investors Providers of Healthcare Private Hospitals Private Healthcare Medical Specialist Healthcare Products Funding General Practitioner Pharmaceuticals 83 Medical Schemes Pharmacists Medical devices 8.8 Million members Nurses Surgicals R140.2 billion Physiotherapists Medical Equipment R124.1billion payment (88.5%) Allied Health Traditional Healers SA Constitution Government Healthcare Policies Legislation Medicine and Related Subst Act National Health Act Medical Schemes Act Pharmacy Act Nursing Act Health Professions Act Traditional Health Pract. Act Competition Act Consumer Affairs Act
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 deficit • 2009/2010 R2.5billion deficit • 2010/2011 R459million deficit • 2011/2012 R1 billion surplus • 2012/2013 R25.7million surplus • 2013/2014 R1.55billion surplus • 2014/2015 R464.5million deficit
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 deficit • 2009/2010 R2.5billion deficit • 2010/2011 R459million deficit • 2011/2012 R1 billion surplus • 2012/2013 R25.7million surplus • 2013/2014 R1.55billion surplus • 2014/2015 R464.5million deficit
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 deficit • 2009/2010 R2.5billion deficit • 2010/2011 R459million deficit • 2011/2012 R1 billion surplus • 2012/2013 R25.7million surplus • 2013/2014 R1.55billion surplus • 2014/2015 R464.5million deficit
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 deficit • 2009/2010 R2.5billion deficit • 2010/2011 R459million deficit • 2011/2012 R1 billion surplus • 2012/2013 R25.7million surplus • 2013/2014 R1.55billion surplus • 2014/2015 R464.5million deficit
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 deficit • 2009/2010 R2.5billion deficit • 2010/2011 R459million deficit • 2011/2012 R1 billion surplus • 2012/2013 R25.7million surplus • 2013/2014 R1.55billion surplus • 2014/2015 R464.5million deficit
Consequences of “no price regulation” of Healthcare Services – Scene 6 Medicine Price Regulation
Healthcare Accountability
What is your business?
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.
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 the medical scheme itself, or by any supplier or group of suppliers of a relevant health service or by any person, in association with or in terms of an agreement with a medical scheme;
MSA • Not 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
“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 criteria • Not 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.
“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!)
Suggestions • PMB: • Non discriminatory: service based not diagnosis based • Define “essential” services e.g. Essential Drug List • Urgent revision of the MSA and its Regulations to align with Section 27/28 and other progressive government health policies • PMBs has not been reviewed! • Stewardship: Need 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 Return
Health Governance • Identify health Needs • Ensure health services/benefits for the needs • Actions and programs for priorities • Monitoring and Evaluation • Interrogation and Accountability (RP)
Overspending on Adverse Health Outcomes
Health Inquiry submissions: “High utilisation” and “burden of disease” • Appears to be some level of Ignorance! • Probably accountant, lawyer or actuary interpretation of data • Adverse health outcomes! • Supplier induced demand!
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!
Recommend
More recommend
