MEDICAL ASSISTANCE RESTRUCTURING Presentation to Portfolio Committee 25 September 2002.

MEDICAL ASSISTANCE MEDICAL ASSISTANCE RESTRUCTURINGRESTRUCTURING

Presentation to Portfolio Committee25 September 2002

MEDICAL ASSISTANCE MEDICAL ASSISTANCE RESTRUCTURINGRESTRUCTURING

PROPOSED POLICY FRAMEWORK

DEPARTMENT OF PUBLIC SERVICE & ADMINISTRATION

BACKGROUNDBACKGROUND

Personnel Expenditure ReviewResolution 7 of 2000

Mechanism to introduce collective purchasing Extending medical assistance to all Feasibility of capping employer contributions Manage and control costs for employer and employees Measures and resources for the treatment of HIV/Aids Medical schemes for PS to strengthen the public health system Post retirement medical aid

Resolution 9 of 2001 Priorty given to the matters around HIV/Aids


BACKGROUNDBACKGROUND

Research report from NBC recommending direct capitation agreements with hospital networks and savings accounts.

Task team workshop.

Further exploration of solution within medical schemes:

• Direct capitation is complex and untested in RSA.

• Risks of private hospital monopolies.

• Circumvention of Medical Schemes Act.


BACKGROUND continued.BACKGROUND continued.Exploratory discussions with medical schemes and

administrators.

Consultation with Health and Registrar.

Observations:

• Closed scheme arrangement/mega scheme presents solution.

• Significant benefit by combining provider capitation agreements and closed scheme.

• Investigate delivery mechanisms in respect of closed scheme.


BACKGROUND continued.BACKGROUND continued.

DELIVERY MECHANISMS: Capitation agreement with one large administrator:

Administrator take on risk . Central gate keeping system: Administrator

regulate access to services. Accredited multiple administrators with strategic

partner: Regional distribution with strategic partner and central database for co-ordination.


RECOMMENDED RECOMMENDED FRAMEWORKFRAMEWORK

Compulsory restricted membership scheme for public service, inclusive of SAPS and DCS.

Range of benefit package options: basic/medium/high.

Basic package to include: Comprehensive hospital cover. Comprehensive disease management programme

including HIV/AIDS. Chronic medication.


RECOMMENDED FUTURE RECOMMENDED FUTURE SYSTEMSYSTEM

Subsidy based on basic package and structured according to income and dependants.

Employee contribution based on salary - sliding scale.

Administration: Accredited administrators. Geographic distribution.



Board of Trustees to contract for:Uniform administration systems.Central database.Managed health care agreements and arrangements

inclusive of central hospital admission system.Hospital rating and accreditation system.Public private partnerships.Enforcement and regulation regarding service level

agreements.



Accredited administrators responsible for :Premium collection.Claims processing and payment.Call centres.Administration i.t.o. service level agreements

and uniform systems.Member education.



Governance and financial management: National board of trustees with supporting

regional management structures and committees for the specialised areas of investment policy, auditing, scheme rules and benefits and ex gratia decisions.

Principal officer and staff.



Public private partnerships. Optimal usage of public health system. Upgrading of facilities and cost recovery systems.

Post Retirement Medical Assistance: Scheme membership and employer subsidy to

continue. Migration strategy for existing pensioners. Research: Prefunding of increased PRMA liability.


CONSIDERATIONS:CONSIDERATIONS:

Spending efficiency: Bargaining power i.r.o. admin fees and health care

providers . Remove risk of anti-selection. Stable and balanced risk pool. Removal of brokers. Mandatory solvency requirements. Potential to partly offset additional cost by spending

efficiency.


CONSIDERATIONSCONSIDERATIONS

Administration and governance Prevent market domination. Survival of current profit makers in market. Expand black empowerment net. PERSAL problems related to multiple schemes. Governance risk managed by stringent service

level agreements and strong Board of Trustees.


CONSIDERATIONSCONSIDERATIONS

Impact on health care market Public private partnerships and hospital rating

system must ensure flow of revenue to public hospitals without undermining private sector or overburdening public sector.

Quality of care Accreditation of health service providers

according to rating system.


FINANCIAL FINANCIAL IMPLICATIONSIMPLICATIONS

Additional cost: Extension of cover to low income employees. IT and administration infrastructure. Managed care fees Cost reduced with inclusion of POLMED and

MEDCOR. Increased PRMA liability.


INTERIM HIV/AIDS INTERIM HIV/AIDS PROGRAMMEPROGRAMME

HIV/AIDS - part of disease management programme

Introduction of programme for the interim Cover all aspects. Independent service provider

Funding Jointly from employees and employer


RISK ASSESSMENTRISK ASSESSMENT

Failure of governance and administration functions.

Resistance from employees-matching of existing benefits.

Effect on medical schemes and administrators in open market.

Lack of sufficient funding.Failure of implementation strategy.


IMPLEMENTATIONIMPLEMENTATION

Once-off versus phased approach.Interim HIV/Aids disease management programme.Success require rigorous management.Outline of steps:

Framework agreement. Joint Working Group. Appointment of transaction advisor Communication.


IMPLEMENTATION IMPLEMENTATION CONTINUEDCONTINUED

Benefit packages and subsidy structure development. Financial arrangements i.r.o. reserving. Registration under Medical Schemes Act. Partnerships/contracting by Board of Trustees. IT infrastructure and database. Administrator accreditation. Financial arrangements regarding bank accounts. Member education. Migration.

MEDICAL ASSISTANCE RESTRUCTURING Presentation to Portfolio Committee 25 September 2002.

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Transcript of MEDICAL ASSISTANCE RESTRUCTURING Presentation to Portfolio Committee 25 September 2002.