BHF Northern Regional Meeting Johannesburg 27 November 2007 PRIVATE HEALTHCARE INDABA Vodaworld, Midrand , 21 September 2007 Report back Dr. H.Z. Zokufa Managing Director : BHF

Background Competition Commission complaint Competition Commission application BHF Conference – Sun City Ministerial meeting – 8 August 2007 Ministerial Indaba – 21 September 2007 BHF delegation – 20 BHF Submission

Ministerial Indaba Vodaworld, Midrand : 21 September 2007. Internal issues – contributing to cost of healthcare Internal issues – interventions and solutions External issues- contributing to cost of healthcare External issues- interventions and solutions Structural and legislative issues

Ministerial Indaba Vodaworld, Midrand : 21 September 2007. Internal issues – contributing to cost of healthcare Benefit design Stagnant membership Non-healthcare costs External issues – contributing to cost of healthcare Present Coding for remuneration Provider re-imbursement Quality assessment Private hospitals New Health technology

REALITIES CMS Report: 2006/7

REALITIES CMS Report : 2006/7

KEY ISSUES – 2006 CMS Report 2006/7 Total membership 7 127 343 Gross contribution income R57,6 billion Total amount paid out R51,3 billion Total operating deficit R2.1billion Total non-healthcare expenditure R7.8 billion Investment and other sources income R1.9billion and R1.4billion respectively Final surplus R1.1billion Industry average solvency 38%

Ministerial Indaba Vodaworld, Midrand : 21 September 2007. Internal issues - intervention & solutions Change in benefit design Possible mandatory membership Non-healthcare costs External issues – intervention & solutions Change in Coding for remuneration Change in provider re-imbursement model Enforce Quality Assessment Private hospitals New Health technology Broker fees

Ministerial Indaba Vodaworld, Midrand : 21 September 2007. Internal issues - intervention & solutions Change in benefit design Possible mandatory membership Non-healthcare costs External issues – intervention & solutions Change in Coding for remuneration Change in provider re-imbursement model Enforce Quality Assessment Private hospitals New Health technology Broker fees

BHF Conclusion Submission to the Ministerial Indaba , Vodaworld, Midrand : 21 September 2007 It is very clear that the current model of making healthcare available in the private sector is not sustainable. The Minister of Health must exercise her mandate as given by Section 27 of the Constitution of South Africa and the National Health Act, 2003. Failure to do so will be abdication of responsibility to the detriment of the private healthcare. Various proposals are made to the Minister in this submission on what should be done when it comes to the private health insurance sector. There are things internal to the sector that can be dealt with by the participants. However such an intervention will make no impact if the external issue are not adequately addressed as well. It is BHF’s strong view that self regulation alone has failed in this sector because it is not applicable to every player. The private healthcare funding industry is regulated by the Medical Schemes Act, 1998 and obliged to be transparent of its activities. The private hospitals and and other healthcare professionals viz; specialists, dentists and the like, are not transparent and their professional activities, when it comes to remuneration, are not regulated. This is an unfair situation that has led to this upward trend of increasing cost of healthcare. The Minister of Health is therefore requested to intervene by creating a legislative framework that will adequately protect the consumer, funder and healthcare provider in a way that will ensure the viability and sustainability of the sector.

Minister’s response Ministerial Indaba, Vodaworld , Midrand : 21 September 2007 Pleased that issue of access, equity, improving the quality of care and inefficiencies have come up. Also, principles of containing costs, ethical practices, transparency of the system have come up – core values of our society. The Minister firmly endorsed these principles. Agreement that “self regulation” has not been effective The Minister will strengthen the regulatory and legislative framework. All the recommendations on what should be done to address the spiraling costs will be considered. Process going forward will be inclusive and consider the inputs of all the stakeholders.