Namibian Medical Society Health Economic Seminar 18th April 2015 The determinants of healthcare costs, models used to reimburse healthcare service providers and the future of private healthcare in Namibia Namibian Medical Society Health Economic Seminar 18th April 2015

Who am I? Medical practitioner (GP) for twelve years Healthcare funding industry for 17+ years Towers Watson for the past 9+ years Specialisation in: Coding systems Reimbursement models Claims data analyses and outcomes reporting Provide consulting services to NAMAF regarding Development and maintenance of coding systems for Namibia Determination and publication of benchmark tariffs Strategic matters

The combination of topics is very appropriate… Providers of healthcare services can only be paid if there are funds available Availability of funds is determined by: Income Cost Some reimbursement models have been shown to have a greater impact on cost than others Healthcare providers can actually assist in the management of costs The future of private healthcare in Namibia is dependent upon: Income – Contributions/Premiums Access – Affordability Access - Resources

Determinants of healthcare costs Hospitals account for a third of the healthcare expenditure Pharmacies and general practitioners account for about another one eighth each

Determinants of healthcare costs Highest increases have taken place for hospitals, optometrists, medicines and “other”: “Other” is off a low base Optometry could be due to two year cycle Medicines could (in part) be due to change in dispensing legislation (GP costs have grown slowly)

Determinants of healthcare costs Demographics Epidemiology Reimbursement models Healthcare Technology Price inflation Availability of resources and access to care Quality of care

Reimbursement models Choice Cost Cost sensitivity Funder risk Fee for Service Itemised billing Fixed Fee Aggregated billing per service type Per Diem Aggregated billing over time period Global Fee Aggregated billing by event Diagnosis Related Groups DRG’s) Full Capitation Population based billing Choice Cost Cost sensitivity Funder risk

Future of Private Healthcare Governments are typically mandated to provide universal healthcare coverage (Alma-Ata, 1978) Equity in access to health services that is based upon needs and not ability to pay Quality of services should be good enough to improve health Financial risk protection Differentiation between healthcare needs and desires Definitions vary by country Roles pf private healthcare systems Filling the gap Offering choice to those that can afford it and are willing to pay Relieving the delivery burden on the public sector Supporting the public sector toward fulfilling its mandate

Thank you!