impact of external factors on the cost of healthcare by gary scott namaf 8 th annual conference 23...

Impact of External Factors on the Cost of Healthcare

By Gary Scott

NAMAF 8th Annual Conference23 September 2014

© 2013 Towers Watson. All rights reserved.

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Presentation Outline

A look at the impact of supply side constraints on the healthcare market in Namibia Extent of “medical tourism” in Namibia Lessons from Zimbabwe

A look at the impact of medical malpractice insurance on the healthcare market in Namibia Focus on obstetrics Lessons from South Africa

Opportunities to work together for a more sustainable solution for Namibia

© 2014 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.

Medical Tourism in Namibia


A look at some data

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Breakdown of Namibian Specialist Costs

Using 2013 admissions across NAMAF medical aid funds


26.5%

16.9%

11.3%

9.9%

9.6%

6.1%

4.7%

4.6%

3.4%2.7%

2.4%Surgeon

Orthopaedics

Spec.Physician

Ophthalmology

Obstetrics and Gynaecology

Paediatrics

Otorhinolaryngology

Neurosurgery

Cardio Thoracic Surgery

Maxillo-facial and Oral Surgery

Urology

Plastic and Reconstructive Surgery

Nuclear Medicine

Neurology

Psychiatry

Radiation Oncology

Cardiology

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Breakdown of South African Specialist Costs



12.6%

21.7%

7.7%

5.2%3.4%

8.5%

3.4%

7.0%

4.0%

0.9%

6.0%

7.8%

1.2%1.1%

7.0%2.3%

Surgeon

Orthopaedics

Spec.Physician

Ophthalmology

Obstetrics and Gynaecology

Paediatrics

Otorhinolaryngology

Neurosurgery

Cardio Thoracic Surgery

Maxillo-facial and Oral Surgery

Urology

Plastic and Reconstructive Surgery

Nuclear Medicine

Neurology

Psychiatry

Radiation Oncology

Cardiology

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% of admissions performed in South Africa



Surge

on

Orthopae

dics

Spec.

Physicia

n

Ophthalmology

Obstetri

cs an

d Gynae

cology

Paediat

rics

Otorhinolar

yngo

logy

Neuro

surge

ry

Cardio Th

oracic S

urgery

Maxillo

-facia

l and O

ral Su

rgery

Urology

Plastic a

nd Reconstr

uctive

Surge

ry

Nuclear

Medicin

e

Neuro

logy

Psychiat

ry

Radiati

on Onco

logy

Cardiology

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

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Lessons from Zimbabwe

Drivers of medical tourism in Zimbabwe (Mrs Linda Mukusha presentation at BHF Conference)

No preferred service provider networks where tariffs can be negotiated and agreed, Minister of Health will not allow this

No agreement on tariffs with service providers. Three different tariffs in the market, AHFoZ which most funders reimburse on, Association tariffs and ZIMA tariffs (bronze, silver and gold based on American model)

Sub-economic subscriptions in comparison to treatment costs Minister of Health increased tariffs by 75% on GPs and about 5% across other

disciplines (July 2014) Service providers argue that medical inflation is at CPI +300%.


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Drivers of medical tourism in Zimbabwe (Mrs Linda Mukusha presentation at BHF Conference)

Hospitals asking for +20% yearly Service providers pass on capital costs to funders through exorbitant marks ups on

services +100% to +500% Lack of Specialist skills e.g. heart bypass surgery Lack of Specialist equipment, private institutions affected, i.e. quality Affordability on the part of the patient (benefit limit does not cover treatment costs

in Zimbabwe) High loss ratios suffered by medical funders


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Mrs Linda Mukusha presentation at BHF Conference (cont.)

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How has the market received medical tourism

PATIENTS: are happy they have choice and can get affordable treatment that preserves their benefit

FUNDERS: manage claims costs resulting in better financial performance SERVICE PROVIDERS: want all treatments to be done in Zimbabwe except for

treatment not available. Raise arguments for post treatment care and externalisation of funds

REGULATOR : their position not clear as no comment has been received from the office


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What role is specialist costs playing in Namibia

Analysis of 2013 in-hospital specialist fees charged as % of NAMAF Benchmark Tariff


Neurology

Neurosu

rgery

Surg

eon

Otorhinolaryn

gology

Obstetri

cs and G

ynaeco

logy

Urology

Anaesthetists

Orthopaedics

Spec.P

hysicia

n

Plastic a

nd Reconstr

uctive

Surg

ery

Paediatrics

Ophthalmology

Cardio Thora

cic Su

rgery

Maxil

lo-facia

l and O

ral S

urgery

Psychiatry

-

0.50

1.00

1.50

2.00

2.50

3.00

Namibia

SA

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Concluding thoughts

Medical tourism:

Must be seen as a last resort in areas where Namibia has failed to attract / retain the necessary skills

Is not practical in many areas of practice such as obstetrics, psychiatry

Cannot be preferred to holistic care in an integrated system


Medical Malpractice Insurance


Focus on Obstetric care

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Breakdown of Namibian Obstetric Care



64.4%

13.5%

5.8%

4.0%

2.5%

2.2%1.0%

Windhoek Swakopmund

Walvis Bay Ongwediva

Otjiwarongo Oshakati

Tsumeb Rehoboth

Gobabis Ondangwa

Keetmanshoop Windhoek West

Grootfontein Luderitz

Rundu Kuisebmond

Mariental Oranjemund

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Count of deliveries reimbursed by NAMAF medical aid funds in 2013


Gobabis

Grootfontein

Keetmansh

oop

Kuisebmond

Luderit

z

Mariental

Ondangwa

Ongwediva

Oshakati

Otjiwaro

ngo

RehobothRundu

Swakopmund

Tsumeb

Walvis B

ay

Windhoek

Windhoek W

est

18 13 17 3 8 2 18 104

9 66

27 4

308

28

157

1,390

15 51 54

342

GPs Specialists

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% caesareans reimbursed by NAMAF medical aid funds in 2013


Gobabis

Grootfontei

n

Keetm

ansh

oop

Kuisebmond

Luderi

tz

Marien

tal

Ondangw

a

Ongwed

iva

Oshak

ati

Otjiwaro

ngo

Rehoboth

Rundu

Swak

opmund

Tsumeb

Walv

is Bay

Windhoek

Windhoek

West

67% 69%

35%

67%

88%

50%

83% 85%

56%

67%

81%

25%

85%

39%

81%76%

47%

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Lessons from South Africa – obstetric care

Distributions between GP and Specialist in attendance


17%

Namibia

GPSpecialist

71%

South Africa

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Medical Malpractice insurance

Medical Protection Society (MPS) 2014 rates

Obstetrics – private specialist practice R330,000 Neurosurgery, spinal surgery R318,190 Orthopaedic surgeon R131,080 Cardiac, general surgery R130,000 Obstetrics – General Practitioner* R92,260 ENT surgeon R70,530 Procedural – General Practitioner* R15,820 Non procedural – General Practitioner* R8,680

* GP’s spending more than 50% of their time doing work of a specialist nature must pay according to specialist rates


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Medical Malpractice insurance

Cost of insurance in private sector if spread across the GPs and Specialists doing 10 or more deliveries for NAMAF Schemes in 2013, amounts to:

General Practitioners – R1,200 per delivery Specialists – R3,700 per delivery

Namibia is paying for historical claims experience of other countries (South Africa has registered claims as high as R24 million, and has a claim incidence rate approaching 10%)

MPS premiums for specialist obstetrics have increased from R75,000 to R330,000 in eight years. MPS moving from a claims incurred to a claims made basis of insurance to keep premiums affordable.


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Namibian solution?

Co-operation between funders and doctors could give rise to a unique solution for Namibia that allows GPs to continue to practice obstetric care in remote regions

Insurance pool created for Namibian claims only Cost of insurance shared between funders and doctors Premiums set on a per-case rather than per-doctor basis Cover structured to continue after retirement 24/7 medical legal support and advice Efficient claims handling and legal support to ensure speedy and appropriate

compensation


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Concluding thoughts

Working together:

Guard against importing the antagonism between funders and doctors that has developed in South Africa

Doctors are well remunerated and medical schemes are well funded in Namibia

The focus should be on making the system sustainable for patients in terms of both access to care and affordability


impact of external factors on the cost of healthcare by gary scott namaf 8 th annual conference 23...

Documents

towers watson client

medical inflation

namaf medical aid

association tariffs

different tariffs

zima tariffs bronze

healthcare market

presentation outlinea