1. Review of the Medical Schemes Environment and the Private Health Industry: Alex van den Heever Advisor Council for Medical Schemes

2. Industry 148 medical schemes 148 medical schemes For profit entities For profit entities  Administrators  Brokers  Managed care organisations 7 million beneficiaries 7 million beneficiaries Gross contributions R42 billion Gross contributions R42 billion

3. CMS Accountability MoH CMS (15 members) Registrar Appeal Board (3 members

4. Operating results

5. Cost changes 0.00 2.00 4.00 6.00 8.00 10.00 12.00 19921993199419951996199719981999200020012002 Rands (billions) GENERAL PRACTITIONERSMEDICAL SPECIALISTS DENTISTS(incl. Specialists)Provincial Hospitals Private HospitalsMEDICINES ALLIED AND SUPPORT HEALTH PROFESSIONALSEX-GRATIA PAYMENTS OTHER BENEFITSCAPITATED PRIMARY CARE

6. Real non health expenditure per beneficiary

7. Administrator market share

8. Industry solvency levels

9. Prescribed minimum benefits Described as diagnosis treatment pairs Described as diagnosis treatment pairs Expanded to include CDL – based on treatment algorithms Expanded to include CDL – based on treatment algorithms No co-payments – but can designate a service provider No co-payments – but can designate a service provider Requirement for services to be reasonable available – otherwise no penalties for non- use of the designated provider Requirement for services to be reasonable available – otherwise no penalties for non- use of the designated provider

10. HIV/AIDS PMB expanded to include all aspects except ART PMB expanded to include all aspects except ART Will be expanded to include ART this year – general acceptance in industry Will be expanded to include ART this year – general acceptance in industry Issue to note: Issue to note:  As treatment of OI is covered, if the designated service provider is the public sector – the service must be reasonably available.  Arbitrary referrals to the public sector should and can be prevented.

11. Demarcation Based on definition of “business of a medical scheme” and definitions of “health insurance” contained in the long- and short-term insurance Acts Based on definition of “business of a medical scheme” and definitions of “health insurance” contained in the long- and short-term insurance Acts Distinction based on “defrayal of expenses” for a relevant health service Distinction based on “defrayal of expenses” for a relevant health service HIV/AIDS products: virtually all illegal and ill- focused – no real future for these products HIV/AIDS products: virtually all illegal and ill- focused – no real future for these products Long-term insurance: Long-term insurance: Short-term insurance Short-term insurance

12. End