Haroon Wadee Head: Health Systems & Policy BHF

1. Trends in Specialist Costs 2005/2006 Haroon Wadee Head: Health Systems & Policy BHF

3. Annual increases to providers Remuneration = Volume X unit price % % Funder perspective Provider perspective

4. Which is the correct perspective? ¿

5. CMS 2006 report • Specialist payments continue to climb • Hospital payments levelling • ? Dispensing fee & SEP • Verifiable pattern in BHF 2006 KPI report (in press)

6. Millions 1,400 1,200 1,000 800 600 400 200 0 2000 2001 2002 2003 2004 2005 2006 Medical specialist cost trends3 administrator’s data aggregated • PMB • 8% NHRPL

7. Payment trends of some disciplines for a administrator Millions ? ICD10 ?Spesnet

8. Result of SAMA participation in NHRPL! • ? Some science behind NHRPL process

9. 6.3% impact expected

10. 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

11. 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

12. Remedies • No Golden Rule • Political pressure on SAMA with close engagement with NDOH, CMS and media

13. 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

14. 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

15. Traditional financing-services flows

16. Flows (with co-payments and out-of-pocket expenditure)

17. 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

18. Remedies • Improved communication to members to address information asymmetry – ongoing • Engagement with CMS

19. Force-field analysis vis-à-vis NHRPL Process

20. 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

21. Thank You