1. Analysis of Shadow REF Returns Q1 to Q4 2005
Risk Equalisation Fund
April 2006

2. Submission of Data

3. Cumulative REF Submissions
Majority of schemes submitting on time. But a number of submissions continue to trickle in after the closing date.

4. Multiple Submissions
Multiple submissions reduced further to reasonable levels

5. No REF Grids Submitted
Unable to submit any REF Grid data in any quarter were:
Baymed (Supreme Health Administrators (Pty) Ltd)
Food Workers Medical Benefit Fund (Self-administered).
In Q4, Oct and Nov data missing:
Eclipse Medical Scheme (Active Health)
In Q4, no data submitted:
MASCOM Medical Scheme (Self-administered)
Sizwe Medical Scheme (Sigma Health Fund Manager (Pty) Ltd)
Thebemed (Thebe ya Bophelo Healthcare Administrators)

6. Progress on Problems with Quality of Data

7. Age Profile: REF Grids Compared to Statutory Returns
Q4 slightly better. Anomalies in age data in Q1 but Q2 to Q4 shows slightly declining average age.

8. Age Profile Issues
Higher number of beneficiaries in below 1 year age category: (beneficiaries re-classified to Under 1 which has a very much higher REF Contribution). Problem slightly improved but continues. REF Grids report 121% of the numbers reported in the Statutory Returns for Dec (127% in Sep)
Discovery: 100%
Medscheme: 221%
MHG: 100%
Old Mutual: 199%
Sovereign: 100%
Exclusive Health: 233%
Sigma Health: 100%
MxHealth: 223%
African Health: 127%
Eternity: 197%
Definiti: 236%
Private Health: 208%

9. Age Profile Issues
Lower number of beneficiaries in 85+ age category: (beneficiaries become which has higher REF Contribution). Problem has become much worse. REF Grids report only 80% of the numbers reported in the Statutory Returns for Dec (was 94% in Sep)
Discovery: 91%
Medscheme: 75%
MHG: 84%
Old Mutual: 76%
Sovereign: 100%
Exclusive Health: 84%
Sigma Health: 20%
MxHealth: 74%
African Health: 102%
Eternity: 79%
Definiti: 78%
Private Health: 74%

10. Fewer Problems with Maternity Cases
Maternity cases not reported by 22 schemes in Q1. Major improvement by Q3 and Q4. Now only 3 schemes who have not submitted any maternity cases in 2005:
MASCOM Medical Scheme
Rand Water Medical Scheme
Witbank Coalfields Medical Scheme
Maternity cases substantially exceeded possible numbers for the age and gender profile in 13 schemes in Q1. Definitional problems were fully resolved by Q2.
One ultra-small self-administered scheme, SEDMED, where MAT numbers submitted appear to be cumulative.

11. SEDMED REF Curves
Cumulative MAT figures.

12. SEDMED MAT per 1,000
Cumulative MAT figures.

13. Maternity Rate per 1,000
Over-reporting of MAT by 13 schemes – now resolved.

14. Pattern in Maternity Cases
Dip in births recorded in last month of Q2, Q3 and Q4.
Retrospective element of this risk factor. Need for schemes to be able to adjust REF Grids in the next quarter once data known.

15. Progress on Correctly Identifying Chronic Disease

16. COMMED Problems Resolved Q4
Community Medical Aid Scheme (COMMED), administered by Allcare Administrators (Pty) Ltd. overstated significantly on many diseases for Q1-Q3:
Haemophilia – dropped from 392 cases (33,000%) to 0.
Bronchiectasis was 130,000% now 0.
Multiple Sclerosis was 8,000%, now 0.
Systemic Lupus Erythematosus was 4,600% now 0.
Chronic Renal Failure – dropped from 1,604 cases to 6 (24,000% to 86% - we predicted 7 cases).
Rheumatoid Arthritis by 4,300% now 53%.
Bipolar Mood Disorder was 1,500% now 40%.
COPD was 1,500% now 14%.

17. COMMED
Persistent data problems finally resolved in Q4.

18. COMMED Financial Impact
Community Medical Aid Scheme (COMMED), administered by Allcare Administrators (Pty) Ltd.
Scheme expected some R150 million more than was due to them from REF.

19. Haemophilia Rate per 1,000 Problems resolved
Over-reporting of HAE by 9 schemes resolved.
Problems with one scheme remain.

20. RHA Rate per 1,000
Problems resolved

21. Hypertension Rate per 1,000
Reasonably stable.

22. Hyperlipidaemia Rate per 1,000
Slight increase over year.

23. Asthma Rate per 1,000
Decline in Q4 or seasonal ?

24. COPD Rate per 1,000
Lower than expected. Slightly declining ?

25. Diabetes Type 1 Rate per 1,000
Reasonably stable.

26. Diabetes Type 2 Rate per 1,000
Stable at higher level than 2002 Study.

27. Congratulations ! Administrators Clearing houses Capitated providers
Consultants
RETAP
REF Team

28. CRF Rate per 1,000 Problems with three schemes remain
New problems with two additional schemes.
Problems with two schemes remain.
Over-reporting of CRF by 6 schemes resolved.

29. Chronic Renal Failure Q4
Total cases in industry reported in Dec 2005 was 6,807.
Telemed (self -admin.) accounted for 1,815 cases.
Since June, Cape Medical Plan (self –admin.) has added some 700 cases – accounting for 707 cases.
Since July, Naspers (self –admin.) has added some 730 cases each month – accounting for 730 cases.
These three account for 3,252 cases when we expect 35 cases, based on their age profile.
These three account for 1% of beneficiaries in the industry but 48% of CRF cases.

30. Bronchiectasis Rate per 1,000
Lower in Q4 but rate is still higher than expected.

31. Cardiomyopathy Rate per 1,000
Widespread increases in number of cases reported. 5,304 cases in Jan 2005; 7,070 cases in Sep 2005; some improvement in Q4.

32. Schizophrenia Rate per 1,000
Some improvement in Q4. Still work to do.

33. Multiple Sclerosis Rate per 1,000
Improvement since Q1. Still work to do.

34. HIV Rate per 1,000
Increased slightly but still much lower than expected. Unusual pattern of decline in Q4 ?

35. Increasing Numbers with Multiple Conditions

36. Total CDL Rate per 1,000
Seems more stable after Q1 “learning curve” but expected numbers declining slightly.

37. Multiple CDL Rate per 1,000
Seems more stable after Q1 “learning curve” but expected numbers declining so A/E increases.

38. Two Multiple Conditions Rate per 1,000
Similar pattern to Total CDL Rate.

39. Three Multiple Conditions Rate per 1,000
Unlikely under “treated patient” definitions
Steep “learning curve” in Q1 and Q2, revised figures in Q3 but Q4 stabilized at high Sep 2005 levels.

40. Four or more Multiple Conditions Rate per 1,000
Very unlikely under “treated patient” definitions
Q4 stable at high levels of Sep 2005 but expected numbers declining.

41. Impact of Administrator’s on Data Quality

42. Allcare Administrators (Pty) Ltd
Impossible data reported in Q1. Some of the most serious data issues resolved by Q2 and further issues resolved by Q4 .

43. Other Code RED Administrators
Attention has produced much improved Q4 shape.
Ingwe Med has produced usable data from Q2 and is no longer considered “Code RED”.

44. Comment
Presentations to clearing houses, administrators and systems providers.
Alerts for trustees and consultants.
Major and sustained improvement in the administrators identified as “Code RED” in Q
Value of looking at REF curves by age.

45. All Administrators
Similar shape in Q2, Q3 and Q4. Q1 shape impacted by very large missing option. Heavier tail of chronic conditions than expected.

46. Discovery Health (Pty) Ltd
Similar shape in Q2, Q3 and Q4. Q1 shape impacted by very large missing option. Heavier tail of chronic conditions than expected.

47. Medscheme (Pty) Ltd
Very similar shape in all quarters. Heavier tail of chronic conditions than expected.

48. Metropolitan Health Group (Pty) Ltd
Problem in Q1 with MAT cases resolved. Some definitional issues seemed to be resolved in Q3 but Q4 exceeds the highest Q2 levels ? Highly problematic.

49. Old Mutual Healthcare (Pty) Ltd
Problems identifying chronic conditions now much improved. Tail is slightly lighter than other major administrators.

50. Sovereign Health (Pty) Ltd
Increasing numbers of chronic conditions each quarter. Definitional issues affect multiple conditions.

51. Allcare Administrators (Pty) Ltd
Impossible data reported in Q1. Some of the most serious data issues resolved by Q2 and further issues resolved by Q4 . Q4 shape now much closer to expected in mid-adult years but still higher from age 65+.

52. Rowan Angel (Pty) Ltd
High MAT and low CDL.

53. Exclusive Health (Pty) Ltd
High tail at oldest ages.

54. MULTIMED
High MAT in Dec High chronic tail.

55. SIZWE Medical Services (Pty) Ltd
No data submitted.

56. Sigma Health Fund Manager (Pty) Ltd
Similar shapes in all four quarters but definitions are problematic.

57. Mx Network Systems (Pty) Ltd
Unusually low chronic disease.

58. African Health (Amanzi, Ingwe, PPS)
Similar shapes in all four quarters and equal to Expected.

59. Medical Aid Administration Experts (Pty) Ltd
Similar shapes in all four quarters. Lower than Expected in mid-adult years.

60. Why these different Patterns?
Not a true reflection of the difference in risk
Appears systemically by Administrator
Differences are due to different application of Entry Criteria
DSPs that cannot submit data on CDLs
Clearing houses that cannot “see” certain conditions
Data passed though administrator without checking
Different systems for Statutory Return and REF Grid submissions
Trustees and Principal Officer not checking for reasonability

61. Now Need to be Under Scrutiny

62. Telemed
Self-administered. MIP systems. Needs attention.

63. CRF per 1,000 for Telemed
Expect 26 cases. Actual is about 1,800 cases.

64. CC4 per 1,000 for Telemed
Problems since August with about 450 extra cases.

65. Naspers
Self-administered. MIP systems. Needs attention.

66. CRF per 1,000 for Naspers
Problems since July with about 700 extra cases.

67. CC4 per 1,000 for Naspers
Problems since July with about 550 extra cases.

68. Cape Medical Plan
Self-administered. Needs attention.

69. CRF per 1,000 for Cape Medical Plan
Aug 2005 REF beneficiaries were 175% of SR.

70. CC4 per 1,000 for Cape Medical Plan
Aug 2005 REF beneficiaries were 175% of SR.

71. The Need for a Registry
Examples of data in 2005 from two small schemes:
First set is total CDLs – even without the very odd July number, there is no discernible pattern.
Second set is CRF.
Fluctuations with no apparent pattern – would have required several investigations.

72. Impact on Community Rate for REF CT 2005

73. Community Rate All Schemes
Ignore Q1. Increasing stability.

74. Community Rate REF Study 2005
Ignore Q1. Increasing stability ? Q4 elevated disease counts in one administrator.

75. Community Rate Discovery Health and Medscheme
Ignore Q1. Increasing stability except for MAT.

76. Risk Equalisation Fund