1. 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

2. 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

3. 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

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

5. 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)

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

7. 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

8. 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

9. Thank you!