1. The BHF Southern African Conference 22-25 July’07 Sun City
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HEALTHCARE COSTS & QUALITY “A Managed Care Perspective” PRESENTED BY: Charles Harebottle Managing Director, MSO
The BHF Southern African Conference July’07 Sun City

2. Hospital Cost Inflation
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The BHF Southern African Conference July’07 Sun City

3. The BHF Southern African Conference 22-25 July’07 Sun City
MERC E-CLASS 1973
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The BHF Southern African Conference July’07 Sun City

4. The BHF Southern African Conference 22-25 July’07 Sun City
MERC E-CLASS 2006
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The BHF Southern African Conference July’07 Sun City

5. The BHF Southern African Conference 22-25 July’07 Sun City
TATA INDICA
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The BHF Southern African Conference July’07 Sun City

6. The BHF Southern African Conference 22-25 July’07 Sun City
Managed Care Costs
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“Managed care costs went up to R986 from R885”
2003 – “Managed care costs went down to R966 from R986”
2004 – “Managed care rose by 14,2%”
2005 – “Managed care expenses rose by 12,6%”
2006 – “Managed care fees increased by 2%”
The BHF Southern African Conference July’07 Sun City

7. Actual Managed Care Inflation at a Per Beneficiary Level
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SCHEME
Percentage
Scheme A
20.83%
Scheme B
4.53%
Scheme C
-1.68%
Scheme D
19.56%
Scheme E
12.04%
Scheme F
-2.90%
Scheme G
88.75%
The BHF Southern African Conference July’07 Sun City

8. Actual Managed Care Inflation at a Per Beneficiary Level
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SCHEME
Percentage
Scheme A
20.83%
Scheme B
4.53%
Scheme C
-1.68%
Scheme D
5.50%
Scheme E
12.04%
Scheme F
0.51%
Scheme G
5.54%
The BHF Southern African Conference July’07 Sun City

9. The BHF Southern African Conference 22-25 July’07 Sun City
HBM Service Inflation
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2000 to 2005
-12% in absolute terms
The BHF Southern African Conference July’07 Sun City

10. The BHF Southern African Conference 22-25 July’07 Sun City
Workload Increase
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27% increase in number of medical protocols to deal with new technology or changed practice.
SEP = 4 fold increase in hospital claims audit.
ICD10 = 25% increase in talk-time.
Introduction of additional cost control measures increased in pre-authorisation contacts per event 3,1 to 5,5.
The BHF Southern African Conference July’07 Sun City

11. The BHF Southern African Conference 22-25 July’07 Sun City
What of Quality
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Patient care
Risk management results
Client service
The BHF Southern African Conference July’07 Sun City

12. The BHF Southern African Conference 22-25 July’07 Sun City
Hospital Inflation
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Industry = +12%
MSO Universe = 3%
BUT
Individual scheme experience from 23% to 1%.
The Cost Drivers:
Utilisation = -11%
Cost per Incident = +15%
Highest Inflation Scheme:
Utilisation = +12%
Cost per Incident = +9%
The BHF Southern African Conference July’07 Sun City

13. Hospital Inflation 1st Qtr 2006 - 2007
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Hospital Inflation 1st Qtr
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Industry = 15%+
MSO Universe = 9%
Highest Scheme = 26%
Lowest Scheme = 1%
THE COST DRIVERS
Utilisation = 3%
Cost per Incident = 6%
The BHF Southern African Conference July’07 Sun City

14. The BHF Southern African Conference 22-25 July’07 Sun City
In Summary
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Quality foundation IP
Clear, auditable record of action
Clear understanding of scheme and challenges
Consistent innovation in response planning
Quantifiable results
The BHF Southern African Conference July’07 Sun City