Why a new PMB package? What’s wrong with what we have?

1. Why a new PMB package?What’s wrong with what we have? Rajesh Patel BHF: Benefit & Risk May 2007

2. History • Oregan: methodology to prioritise and develop health insurance based on its • Needs • Demographics • Burden of disease • Soderland and Peprah • Used methodology to propose core hospital benefit package • DOH/CMS: • List: in and outpatient • Address “dumping”

3. Noble intentions • wayward implementation

4. SA • Very different • Demographics • Health burden • HIV • Trauma • Economy …therefore need a different approach and different benefit design.

5. SA private sector • CMS report – chronic disease prevalence • We do not have • Vital statistics • Health status data • Health burden data • Unrealised NEED! • Part of broader SA health system • Use WHO and MRC data for SA

7. Will PMBs address this? • Health Charter – common basic benefit for all South Africans

8. Catastrophic Health Cover • Driving policy framework for inclusion in current PMBs • Infertility, menopause, sec. amenorrhea,…pap smear and mammograms. • Origins in commercial insurance • Not in Health or Human development • Explicit, disease focused, individual focus, high cost-low frequency, emotive component • Not community/public focus • Not for community development

9. Benefit Driven Essential Care (primary care focus) Individual patient first Insured Benefit Public health first Disease Driven Needs based benefit design Adapted from Stolk P et al. “Rare essentials”: drugs for rare diseases as essential medicine. WHO Bulletin: Sept 2006, 84 (9)

10. Catastrophic Cover • Presupposes day to day care is adequately provided • Product of choice in developed economies • Oregon • Netherlands Small low income population, large middle income population • Is SA private sector a “developed” community? • Non randomised data • 28% of lives from families with member earning <R4500 • Is day to day cover adequately provided?

11. Labour Force Survey, September 2006

12. PMB • Predominantly referred care • NDOH promote primary care (June 94) Health benefit policy dichotomy • Disease and severity based • Fewer individuals with greater benefit depth • Not equitable benefit • Healthcare provision ≠ accessible

13. PMB • Not explicit • Interpretation problems and conflict • “life threatening” • “…outpatient tests therefore its not a PMB” • “…only pay if appealed.” • physiotherapy: pneumonia for post-op physio • no minimum non-drug benefit defined • 5years later – no clarity • except for ICD10 list with its problems and BHF’s standardised guides • Scheme’s fault • Consider the “spirit”

14. CDL • No public health policy or framework used to select diseases • Appears that most common conditions were used • Major depression and osteo-arthritis excluded • Expectation to cover other chronic conditions listed in DTP (patchwork design)

15. CDL • Algorithms vs EDL • National alignment of process and benefit • Expectation of cover for biologics (RA & MS) • But no paracetamol (essential drug) for osteo-arthritis • Anomoly

16. Benefit Driven Essential Care (primary care focus) Individual patient first Insured Benefit Public health first Disease Driven Needs based benefit design Adapted from Stolk P et al. “Rare essentials”: drugs for rare diseases as essential medicine. WHO Bulletin: Sept 2006, 84 (9)

17. PMB • No adequate povision to address allocative inefficiency – “at cost” • it entrenches inefficiencies • Schemes blamed for not controlling cost • If LIMS is housed under the same act • How does one justify inequity of benefit in the context of HC developments • LIMS benefit must be core benefit of the PMB

18. PMB • PMB implemented with no Health Impact Assessment program • How can be explain the value of R100+b spent to date • Survey of PMB cost estimate • R290-R390 PBPM • Current RETAP estimate R260 for smaller benefit than the Scheme risk

19. Finally • Current PMB conceived in the 1990s • Many developments since then • LIMS • HC • MDG targets • National initiatives e.g. EDL, primary care, PPP • … These must be taken into account as we move towards SHI!