Board of Healthcare Funders of Southern Africa Cost and Quality Board of Healthcare Funders of Southern Africa Conference 2007 Sun City The BHF Southern African Conference 22-25 July’07 Sun City

Speakers R Patel Charles Harbottle Roseanne da Silva Barry Childs Why measure quality? Role of health governance and management Perversity in private healthcare Charles Harbottle Evaluating value of non healthcare cost Roseanne da Silva Evaluation of intermediary cost Barry Childs Collaborative risk management The BHF Southern African Conference 22-25 July’07 Sun City

Governance Process Health Finance The BHF Southern African Conference 22-25 July’07 Sun City

What Value Health status accountability R66 billion in private sector R1 : R7 per capita (public vs private) Health status accountability Measure the value and achievements of health resources utilised Vital stats Millennium development goals WHO Report: indicators The BHF Southern African Conference 22-25 July’07 Sun City

Quality in healthcare & medical audit Appropriate Efficacy Effectiveness Efficiency Affordability Access Equity The BHF Southern African Conference 22-25 July’07 Sun City

Health measurement Demographic profile monitoring Health status indicators Quality /outcome indicators - HQA Utilisation indicators Economic indicators The BHF Southern African Conference 22-25 July’07 Sun City

Health status indicators Life expectancy Death rates Maternal Peri-natal, neonatal, infant Inhospital Disease specific Dx Prevalence Dx Incidence Birth weights Suicide rates Teenage pregnancy Immunisation coverage … The BHF Southern African Conference 22-25 July’07 Sun City

Examples of quality indicators Hospitalisation death rate Readmission Infection rate Disease specific complication Ambulatory Pap & mammogram coverage Flu vaccine coverage in >= 50years Chronic: Diabetes HbA1C coverage and frequency Retina evaluation Renal evaluation and outcomes Hospitalisation Acute - glucose level related Amputation rates The BHF Southern African Conference 22-25 July’07 Sun City

2005 claim data The BHF Southern African Conference 22-25 July’07 Sun City

2005 Claims Data The BHF Southern African Conference 22-25 July’07 Sun City

Diabetes 2005 The BHF Southern African Conference 22-25 July’07 Sun City

Others Beneficiaries visiting dentists Dental caries (2-8years) 32% (average of 1 per family) Dental caries (2-8years) 19.1% Optometrist visit ≤ 6years 1% (Could be low because of free screening) The BHF Southern African Conference 22-25 July’07 Sun City

Quality assurance: trends The BHF Southern African Conference 22-25 July’07 Sun City

QA: Success factors Commitment Consensus Coding including accuracy & detail (E)quipment ? The BHF Southern African Conference 22-25 July’07 Sun City

Needs Need to redefine mandatory benefits Emphasis on spend in the right places Need to promote access where benefit exists Need for ongoing monitoring Need for accountability by all stakeholders The BHF Southern African Conference 22-25 July’07 Sun City

HQA Health Quality Assessment Non profit entity Committed to quality care monitoring Independent and unbiased Belongs to the members Confidentiality assured Supported by BHF The BHF Southern African Conference 22-25 July’07 Sun City

Legal and Policy framework National Health Act Office of Standards Compliance NHIS Health Charter Quality, equity and access UN: Millennium development goals Medical Schemes Act amendment Governance guideline regulate by Circular Statutory submissions The BHF Southern African Conference 22-25 July’07 Sun City

Proactive or Reactive? Robert Kennedy - 1967 “I’m sorry. We can do better in this country. We will--we ought to.” The BHF Southern African Conference 22-25 July’07 Sun City

Private Sector Perversity The BHF Southern African Conference 22-25 July’07 Sun City

One Lab’s fee structure Test Med Aid Cash % Difference FBC/Platelet, ESR 121.30 59 51 HbA1c 109 78 29 U&E Creatinine 150 94 37 HIV ab Elisa 108.70 70 35 The BHF Southern African Conference 22-25 July’07 Sun City

Optical costs 1 + 1 specials Suggests price padding to Medical Aids If optical benefit is considered “Essential” and to be included in Basic Benefit and LIMS Prices need investigation Benefit provided needs review The BHF Southern African Conference 22-25 July’07 Sun City

Private hospitals Low flow anaesthesia Codes charged per min (code schedule) Inappropriate since low flow & Medicine Pricing Regulation Correct: R per millilitre used (SEP-regulated) NDoH confirmation Implementation: NHRPL code description change System and process changes Need for settlement, THIS YEAR! Charging error due to incorrect code description Lo-flo in about 7 of 8 patients 15-20% gas utilisation per patient when used Current billing: approx. 4 X SEP 100% - 70% appropriate (Average) 2007: est >R300m (excluding Nitrous Oxide) History: 7-10year FSB & LOA refund arrangement The BHF Southern African Conference 22-25 July’07 Sun City

Governance Low flow anaesthesia: Legal implications NDoH: current billing in contravention of the law Duties of trustees (Medical Schemes Act) Section 57(4)(h) “ensure that the rules, operation and administration of the medical scheme comply with the provisions of this Act and all other applicable laws” Failure to comply by trustees (if continue to pay) Section 66 …be guilty of an offence, and liable on conviction to a fine or to imprisonment for a period not exceeding five years or to both a fine and imprisonment. Possible personal liability The BHF Southern African Conference 22-25 July’07 Sun City

Private hospitals Rebates, off-invoice discounts and effect of centralised buying 98 RAMS (statutory body) fee structure adjustment Approx. 30% increase on tariff items 10% on materials (invoice): 2003/2004: “net acquisition price” (SOB) Invoice minus discount and rebate Pre 98: invoice padding using in-house wholesaler Late 90s: Start of “invoice padding” and price “fixing” at NAPPI level Example (discussion with Vendor) Cost of item R12 Net Sale price R15 Invoice price R80 (“insist” by hospitals) Retail R80 Coding system use and apparent misrepresentation; apparent money laundering Legal opinion required The BHF Southern African Conference 22-25 July’07 Sun City

CMS, 2007 RAMS: Regulated Unregulated The BHF Southern African Conference 22-25 July’07 Sun City

Early Analysis The BHF Southern African Conference 22-25 July’07 Sun City

Private hospitals Rebates, off-invoice discounts and effect of centralised buying estimate (from data presented last year) 2007: R2b+ & non Medical Aid payments “generic” calculator History: 7 year ….. Excludes logistic fee secured ?????? The BHF Southern African Conference 22-25 July’07 Sun City

Question Competition Commissioner investigates Bank charges Would you like the NDoH, Competition Commissioner to investigate the hospital industry and vendor relationship related to invoice price (“fixing”) of the non medicinal items? No Yes FMU, OSEO or NPA: depending on legal opinion The BHF Southern African Conference 22-25 July’07 Sun City