nhi and value-added healthcare - sbsdocs.sbs.co.za/1_koert pretorius.pdfopportunities for new,...

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NHI AND VALUE-ADDED

HEALTHCARE

SAFHE / CEASA 2019

KOERT PRETORIUSCEO

MEDICLINIC SOUTHERN AFRICA

3

SAFHE CONFERENCE

AGENDA

RSA Healthcare Context2

National Health Insurance4

Proposed Solutions5

The Key Challenges3

Global Trends in Healthcare1

Concluding Remarks6

4

DEMOGRAPHICS

GLOBAL TRENDS IN HEALTHCARE

MEDICAL TECHNOLOGY

DIGITAL HEALTH

CONSUMERISM

5

DEMOGRAPHICS


DEMOGRAPHICS

AGEINGDISEASE

PREVALENCE

NUMBER 60+ 901M

12.3% OF TOTAL

POPULATION

2015

NUMBER 60+ 1,402M

16.5% OF TOTAL

POPULATION

2030

NUMBER 60+ 2,092M

21.5% OF TOTAL

POPULATION

2050

POPULATION

GROWTH

• Global health care spending increase by 5.4% per annum in 2018–2022.

• Non-communicable diseases (NCDs) 71% deaths reported worldwide in 2016.

Source: Deloitte 2019 Global Health Care Outlook

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MEDICAL TECHNOLOGY

PRECISION

MEDICINE

ARTIFICIAL

INTELLIGENCE

PERSONALIS-

ATION


MEDICAL TECHNOLOGY

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DIGITAL HEALTH CONSUMERISM

SOCIAL

MEDIA

WEARABLES BIG DATA &

ANALYTICS

EmpoweredConsumer

ClientCentric


DIGITAL HEALTH & CONSUMERISM

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INNOVATIVE DELIVERY MODELS

Alphabet (Google) Healthcare Universe

OPPORTUNITIES FOR NEW, NON-TRADITIONAL ENTRANTS IN HEALTHCARE PROVISION

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INNOVATIVE DELIVERY MODELS IN RSA

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DEMOGRAPHICS

MEDICAL TECHNOLOGY

DIGITAL HEALTH

CONSUMERISM

WHAT DOES THIS ENTAIL FOR HEALTHCARE PROVIDERS?

1. Improve value proposition

2. Value-based contracting e.g.

global fees

3. Integrated care delivery models

4. Coordination across the

continuum of care

5. Develop PPPs to expand

access to healthcare


PROVIDER IMPLICATIONS

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SAFHE CONFERENCE

AGENDA



Proposed Solutions5

The Key Challenges3


Concluding Remarks6

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RSA HEALTHCARE CONTEXT

OVERVIEW

Government Voluntary TotalOut of Pocket (OOP)

SA HEALTHCARE EXPENDITURE: 8.1% OF GDP

3.5% government expenditure: In line with developing countries Brazil, Russia and China; lower than most

OECD countries

4.4% voluntary insurance spend: Higher than most countries; low OOP spend

0.6% OOP spend: Lower than most countries; well established private insurance

% G

DP

OECD HEALTH EXPENDITURE INDICATORS (% OF GDP, 2018 OR LATEST AVAILABLE)

Source: OECD Data

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12

10

8

6

4

2

0

16

18

Private Insurance

44%

Out of pocket

7%

Public49%

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RSA HEALTHCARE CONTEXT

FUNDING SOURCES

PUBLIC HEALTH SYSTEM

PRIVATEINSURANCE

SELF-PAY/ OUT-OF-POCKET

Pri

va

te

Source: National Treasury South Africa; Council for Medical Schemes

SOURCES OF HEALTHCARE FINANCING

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SAFHE CONFERENCE

AGENDA



Proposed Solutions5

The Key Challenges3


Concluding Remarks6

Private Insurance

44%

Out of pocket

7%

Public49%

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KEY CHALLENGES

COVERAGE OF POPULATION

Public SectorPublic Sector

Pri

va

te I

nsu

ran

ceP

riva

te I

nsu

ran

ce

83% 17%

% of population

Approx.

R4,000

Approx.

R20,000

Spend p

er

capita

per

annum

5 x higher spend per

capita private vs. public

OOP / Self pay spend spread across the population

MACRO-ECONOMIC CONDITIONS ENTAIL INADEQUATE FUNDING FOR PUBLIC HEALTHCARE DESPITE A HIGHLY PROGRESSIVE TAX SYSTEM

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KEY CHALLENGES

BURDEN OF DISEASE

SOUTH AFRICA FACES A QUADRUPLE BURDEN OF DISEASE, WHERE MOST OTHER COUNTRIES ONLY SUFFER FROM ONE OR TWO BURDENS.

CAUSE-SPECIFIC DISEASE BURDEN COMPARISON BETWEEN SOUTH AFRICA AND WORLD BANK INCOME GROUPS (DALYs PER 100,000 POPULATION, 2016)

Source: WHO Global Health Estimates 2016 Disability-adjusted Life Year (DALY) data, Mediclinic calcuations

0% 20% 40% 60% 80% 100%

Global

High Income

Lower-MiddleIncome

Low Income

South Africa

HIV/AIDS Other communicable diseases Noncommunicable diseases Injuries

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KEY CHALLENGES

INFRASTRUCTURE

DESPITE SIGNIFICANT POPULATION GROWTH, OVERALL BED CAPACITY HAS REMAINED RELATIVELY CONSTANT.

0

10

20

30

40

50

60

0

20 000

40 000

60 000

80 000

100 000

120 000

140 000

1986 1998 2010 2016

Public Beds Private Beds Population

Source: Competition Commission HMI 2018, World Bank

Hospital B

eds

Relatively constant bed capacity despite a 65% increase in population

Popula

tion (

mill

ions)

HOSPITAL BED CAPACITY AND POPULATION GROWTH

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KEY CHALLENGES

HUMAN RESOURCES

1.2

1.3

2.3

5.2

2.9

8.5

0.8

2.1

1.8

2.4

2.4

3.9

0 2 4 6 8 10

South Africa

Columbia

China

Poland

Mexico

Russia

Doctors (per 1,000 population) Nurses (per 1 000 population)

DOCTORS & NURSES (PER 1,000 INHABITANTS, 2017 OR LATEST AVAILABLE)1

SOUTH AFRICA HAS A CRITICAL HUMAN RESOURCES FOR HEALTH CHALLENGE. THE SUPPLY CONSTRAINT IS SIGNIFICANT WHEN COMPARED TO PEER COUNTRIES.

1,300 doctors are

trained annually

through 8 medical schools that are filled

to capacity.

South Africa needs to

produce 4,000 more doctors per year2

Source: (1) OECD data; (2) Econex/HASA 2015

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Fragmented deliv

• Independent providers with limited care coordination

• Hospitals provide infrastructure, nursing, pharmacy and support services

• Doctors responsible for admitting patients and clinical decisions

Regulatory

• Health Market Inquiry

• National Health Insurance and Medical Schemes Amendment Bill

• Prescribed Minimum Benefits review

KEY CHALLENGES

PRIVATE HEALTHCARE SECTOR

Macro-economic

• Nominal GDP growth

• High unemployment levels

• Stagnant medical scheme market

Macro-economic

Fragmented Delivery

Regulatory Uncertainty

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SAFHE CONFERENCE

AGENDA



Proposed Solutions5

The Key Challenges3


Concluding Remarks6

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NATIONAL HEALTH INSURACE

WHAT IS IT?

Draft National Health Insurance (NHI) Bill

2018:

• Single payer healthcare financing system

to achieve universal healthcare coverage

(UHC)

• Defined package of comprehensive health

services for all

• Accredited and contracted public and

private providers will deliver services paid

for by the Fund

Cabinet approved NHI Bill on 11 July 2019

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NATIONAL HEALTH INSURACE

WHAT IS IT?

Various aspects of the NHI are yet to be defined, including:

• Benefit package detailing the healthcare services that will be funded by NHI

• Costing of benefits

• Financing of the NHI Fund

• Role of medical schemes and private insurance

• Contracting with private sector providers

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SAFHE CONFERENCE

AGENDA


Proposed Solutions5

The Key Challenges3


Concluding Remarks6


“It’s time for a fundamental newstrategy. At its core is maximizing

value for patients: that is, achievingthe best outcomes at the lowest cost”.

Source: Michael E. Porter and Thomas H. Lee.

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Structure provision around the needs of the patient

Robust measurement of outcomes and cost of

episode of care

Move towards bundled payments and global fees

for care cycles

Create integrated care delivery systems

Leverage geographic affiliations

Create a supporting information technology

platform

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Source: Adapted from “The Strategy That Will Fix Health Care”, Michael E. Porter, Thomas H. Lee

MAXIMISING VALUE

CHANGES TO MAXIMISE VALUE

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POTENTIAL SOLUTIONS

UTILISE PRIVATE SECTOR CAPACITY

• Use private hospital capacity, where available, to

service areas with greatest need

• Hospitals take on an agreed percentage of

procedures at lower cost

• Procure pharmaceuticals and prostheses at

state tender prices

• Involve private and public sector doctors

• Examples: maternity, cataract surgery, hip &

knee arthroplasty

STRATEGIC PURCHASING TO ALLEVIATE BACKLOG OF CRITICAL SERVICE LINES

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POTENTIAL SOLUTIONS

HUMAN RESOURCES FOR HEALTH

• Public and private sector to participate in an audit of

available human resources

• Develop a detailed action plan for ensuring adequate

resources to meet healthcare needs of the population

• Collaborate across public and private to build training

capacity

� Expand private sector programmes for training of

nurses

� Potential private sector role in training of doctors

ASSESS SUPPLY OF HUMAN RESOURCES AND EXPAND TRAINING CAPACITY

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• Access to primary healthcare is fundamental to UHC

• Potential for integration between private hospitals and

primary healthcare facilities in close proximity

• Explore innovative solutions involving private hospital

emergency units and private primary healthcare facilities

• Remove barriers to new innovative delivery models, e.g.

review HPCSA ethical rules

POTENTIAL SOLUTIONS

PRIMARY HEALTHCARE DELIVERY

INCREASE ACCESS THROUGH INTEGRATED AND INNOVATIVE PRIMARY CARE DELIVERY

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POTENTIAL SOLUTIONS

UNCOVERED ‘MIDDLE-MARKET’

• Formally employed with household incomes

between R6 400 and R16 000 per month (approx.

6.9 million individuals)

• Uninsured for medical expenses and exposed to

risk of significant out of pocket payments

• Prefer cover for primary healthcare services; willing

to pay up to R350 per month

Source: *Eighty20 Group analysis of StatsSA 2011 data, **LIMS study 2005; survey by Eighty20 Group in 2015

ALTERNATIVE INSURANCE AND DELIVERY MODELS TO EXPAND ACCESS TO EMPLOYED BUT NOT INSURED

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SAFHE CONFERENCE

AGENDA


Concluding Remarks6

The Key Challenges3



Proposed Solutions5

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CONCLUDING REMARKS

Access to quality healthcare is critical to the success of any UHC system:

• Develop innovative ways of optimising limited resources

• Systems and infrastructure that are responsive to the healthcare needs of the South African population

• Move to integrated, value-based healthcare delivery to unlock efficiencies for the patient and the system overall

• Strategic collaboration between public and private sectors

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