retaining value and quality in a changing …...not-for-profit restricted medical scheme in the...

Teddy Mosomothane17 May 2016

Public Hearing

Presentation

RetainingValue and Quality

in a changing healthcare landscape

The average Bankmed member is currently

better off financially by an amount of

34% of contributions

versus if the member joined the average

open medical scheme*

Embracing the opportunity to contribute

We appreciate the inquiry process as partly leading towards

recommendations on:

Appropriate policy and regulatory mechanism that would

support the goal of achieving accessible, affordable,

innovative and quality private health care;

Role of competition policy and competition law in

achieving pro-competitive outcomes in health care.

Bankmed intends to share some insights primarily from a

closed medical scheme perspective in the banking industry.

2






1. About Bankmed

2. Insights on risk pooling successes resulting in

better value

3. Investment by employer groups in health and

wellness

4. Targeted focus on quality of healthcare

5. The challenge of behaviour change

6. An opportunity for collaboration and a phased

response to necessary change

7. Bankmed’s recent change of administrator

8. Conclusion

Agenda

3






About Bankmed

Collaboration among bankers, going back to 1914

Not-for-profit restricted medical scheme in the banking industry

Healthcare funding to more than 50 financial institutions

107 553 principal members, 216 262 beneficiaries (31/12/2015)

Market share:

2.55% of the total industry’s principal members

(and 2.31% of beneficiaries)

6.16% of the restricted medical schemes’ principal

members (5.20% of beneficiaries)

4






Bankmed Vision & Mission

Vision

To be the Medical Scheme of Choice for the Banking

Industry

Mission

To be an affordable Medical Scheme that guarantees

best-of-class member experience, value and quality

5






Strategic Overview

Competitive Benefit

OfferingService Excellence

Health & WellnessRelevance in a

changing

environment

Integrated digital strategy

Innovation / Research & Development

Value to members

6

Value Network Analysis (limited to core deliverables)

7






Partnership Philosophy

Collaborate optimally, extract as much

value as possible from the partnership,

while maintaining the Scheme’s brand

identity, and an appropriate level of

autonomy

8











Bankmed Value Attributes

What sets Bankmed apart

33%Better value AA +

42,5%vs

33,3%

9%vs industryaverage of

11%

6BenefitOptions

Compared to an average

Open scheme

Global CreditRating – 2015

(Highest in the Industry)

Solvency Ratio (2015)vs Industry Average (2014)

Non-healthcareExpense Ratio(Administration, Managed Healthcare & General Administration expenses)

A fair spread of benefits providingfor low to high Healthcare needs and affordability

9






Bankmed retained an AA+ credit rating in 2015, the highest

rating a medical scheme can attain.

Rating assigned by Global Credit Ratings (GCR).

Bankmed is one of only two South African medical schemes

with an AA+ credit rating.

Attributes contributing to the AA+ rating according to GCR:

Strong earnings capacity which is well managed

Large and stable membership base with a favourable age

profile

High level of solvency and strong historical track record

Large and diverse investment portfolio generating significant

investment returns at reasonable risk levels

Bankmed AA+ Credit Rating

10






1. Background about Bankmed

2. Insights on risk pooling successes resulting in better

value

3. Investment by employer groups in health and wellness



6. An opportunity for collaboration and a phased response to

necessary change


8. Conclusion

Agenda

11

Bankmed benchmarking - 2016

• Benchmark against 128 options offered by 12 leading open membership medical schemes

12


• Benchmark against 128 options offered by 12 leading open membership medical schemes

13


• Benchmark Bankmed against 12 leading open membership medical schemes

• Results as a percentage of Bankmed contributions:

Cost Benefit Value

PMB Plan -66% -44% 22%

Basic Plan -13% 15% 28%

Core Saver Plan -24% 1% 25%

Traditional Plan -34% 3% 36%

Comprehensive Plan -19% 19% 38%

Plus Plan -26% 6% 32%

-22% 11% 33%

14


• Benchmarking exercise:

– Bankmed members would (on average) be 33% worse off on an equivalent open

membership medical scheme option

– The calculations of relative value have been prepared by Willis Towers Watson using

the Bankmed 2015 membership and claims profile

– The value differential has increased each year from 2013 to 2016

• Reasons for the value differential:

– The value differential of 33% can be only partly explained by the younger age profile

of the Bankmed membership (12%) and the lower non healthcare costs (3%)

– The unexplained value differential (18%) is due to the compulsory nature of the

Bankmed membership

15






Employers Groups can

protect the Bankmed risk pool

from the loss of younger / healthier members

to a large degree by retaining the condition

of employment that requires membership of

Bankmed

This will enable the Employer Groups to offer

their employees access to affordable private healthcare

on a sustainable basis in the future.

Protecting Our Future

- and the Future of Our Members

16







2. Insights on risk pooling successes resulting in better value





necessary change


8. Conclusion

Agenda

17






Partnerships in Health

Aligned health and wellness strategies

Sharing of information on the health of the organization

Monitor performance of the health and wellness initiatives

18






Employer Group Client Reporting

Demographic overview

Claims & Utilization

Clinical Review

HIV/AIDS

Personal Health Assessment (PHA) and

Individual Stress Assessment (ISA)

19






Membership by Gender

(Jan – Dec 2014)

57,04%55,46%

42,96%44,54%

0,00%

10,00%

20,00%

30,00%

40,00%

50,00%

60,00%

Female

Male

Employer Client: X Bankmed

20






Membership by Age

(Jan – Dec 2014)

0,06%

23,34%

32,06%

17,56%

11,48%

4,81%

10,68%

0,04%

22,89%

33,10%

17,34%

11,32%

4,57%

10,74%

0,00%

5,00%

10,00%

15,00%

20,00%

25,00%

30,00%

35,00%

0 - 19 20 - 29 30 - 39 40 - 49 50 - 59 60 - 65 66+

Bankmed

Employer Client: X

21






Membership by Dependant

(Jan – Dec 2014)

43,41%

28,30%

14,37%

10,41%

2,87%0,53% 0,11%

44,77%

29,15%

14,08%

9,25%

2,29%0,40% 0,06%

0,00%

5,00%

10,00%

15,00%

20,00%

25,00%

30,00%

35,00%

40,00%

45,00%

50,00%

M+0 M+1 M+2 M+3 M+4 M+5 M+6+

Bankmed

Employer Client: X

22






Membership by Income Band

(Jan – Dec 2014)

6,32%

37,77%

55,91%

5,70%

26,47%

67,84%

0,00%

10,00%

20,00%

30,00%

40,00%

50,00%

60,00%

70,00%

80,00%

R0 - R5 000 R5 001 - R10 000 R10 000+

Bankmed

Employer Client: X

23






Membership Duration

(Jan - Dec 2014)

7,75%

18,00%

10,90%

25,87%

37,49%

8,97%

15,55%

10,51%

25,22%

39,75%

0,00%

5,00%

10,00%

15,00%

20,00%

25,00%

30,00%

35,00%

40,00%

45,00%

>1 yr 1-3 yrs 3-5 yrs 5-10 yrs > 10 yrs

Bankmed

Employer Client: X

24






Employer Client: X

Wellness & Preventative Care

Percentage Utilisation

X 2014 Bankmed 2014

Mammogram coverage 24.29% 29.92%

Cervical Cytology coverage 38.31% 42.71%

Bone Densitometry coverage 4.84% 8.81%

PSA Screening 29.84% 45.61%

Colorectal Cancer Screening 1.67% 3.11%

Glaucoma Screening 9.39% 15.53%

HCT Coverage 3.71% 6.27%

Beneficiaries Visiting Dentists (|>2yrs) 22.20% 36.15%

PHA Coverage 7.57% 19.94%

25






Employer Client: X

High Risks 2014

1,95%

3,71%

2,10%2,79%

11,32%11,70%

10,94%

9,53%

4,65%5,36%

3,73%4,57%

0,00%

2,00%

4,00%

6,00%

8,00%

10,00%

12,00%

14,00%

Diabetes

Hyperlipidaemia

Hypertension

Employer Client: X

Female

Employer Client: X

Male

Bankmed

Female

Bankmed

Male

26






Employer Client: X - Abnormal

Waist Circumference 2013 and 2014

36,10%

41,01%

37,42%

26,63%28,66%

25,20%

0,00%

5,00%

10,00%

15,00%

20,00%

25,00%

30,00%

35,00%

40,00%

45,00%

Female >90

Male >100

Employer Client: X

2014

Bankmed

2014

Employer Client: X

2013

27






Employer Client: X

HIV Provincial Distribution by Gender

28






Employer Client: X - HIV Provincial

Distribution by Gender and Age

29






Employer Client: X - HIV Disease

Management Enrolees

Employer Client: X 2013

Employer Client: X 2014

Bankmed2014

Females 789 (78.27%) 807 (77.29%) 2 209 (70.06%)

Males 219 (21.72%) 237 (22.70%) 944 (29.93%)

Total 1 008 1 044 3 153

Post Exposure Prophylaxis (monthly average)

3.33 1.08 6.16

Deceased 5 6 22

30






Number of HCTs

completed per Annum

2 3481 709

9 998

0

2 000

4 000

6 000

8 000

10 000

12 000

Employer Client: X

2014

Bankmed

2014

Employer Client: X

2013

31






Employer Client: X - Number of

Tested Positive

2,08%

1,11%

2,09%

1,32%

1,89%

1,67%

0,00%

0,50%

1,00%

1,50%

2,00%

2,50%

Female

Male

Employer Client: X

2014

Bankmed

2014

Employer Client: X

2013

32






Employer Client: X

HCTs % Enrolled

78,79%

34,78%

68,52%

60,00%

50,00%

71,74%

0,00%

10,00%

20,00%

30,00%

40,00%

50,00%

60,00%

70,00%

80,00%

90,00%

Female

Male

Employer Client: X

2014

Bankmed

2014

Employer Client: X

2013

33






Employer Client: X

ISAs per Annum

925

233369 386

1311

1749

0

200

400

600

800

1000

1200

1400

1600

1800

2000

2009 2010 2011 2012 2013 2014

34






Employer Client: X

Most significant Stressors reported

0% 10% 20% 30% 40% 50% 60% 70%

Social stressors e.g. friends, social isolation, religious…

Health-related stressors e.g. chronic illness

Environmental stressors e.g. crime, pollution, living…

Children or family stressors

Personal relationship difficulties

Personal financial stressors

Work-related stressors and job stress

38%

41%

47%

50%

50%

59%

64%

Most significant stressors reported

35






Employer Client: X

Top 5 Surgical Admissions

Procedure Type Admissions 2013

Admissions 2014

Cost / Admission (2014)

Caesarean Delivery 545 545 R25 083

Dental Procedures 459 471 R8 692

Ophthalmic Biopsies and Excisions 399 461 R10 356

Stomach and Duodenal Procedures 570 448 R21 097

Urinary Functional Procedures 330 420 R16 060

36






Employer Client: X

Top 5 Medical Admissions

Procedure Type Admissions 2013

Admissions 2014

Cost / Admission (2014)

Pneumonia 402 349 R17 994

Maternity 332 367 R30 192

Major Depression 203 198 R18 708

Paediatric/Neonates 74 72 R31 767

Cardiac Failure N/A 60 R37 963

37






Top 5 Chronic Medication

spend 2013 vs. 2014

2013 2014

Rank Condition No. of Claimants

Rank Condition No. of Claimants

1 Hypertension 7 130 1 Hypertension 7 127

2 Hyperlipidaemia 3 983 2 Hyperlipidaemia 4 125

3 Coronary Artery Disease

2 702 3 Coronary Artery Disease

2 753

4 Hypothyroidism 2 079 4 Depression 2 177

5 Depression 1 969 5 Hypothyroidism 2 129

38






Employer Client: X

Chronic Medication Compliance

37,06%

53,50%

63,81%

0,00%

10,00%

20,00%

30,00%

40,00%

50,00%

60,00%

70,00%

2012 2013 2014

39






Employer Client: X

Care Plan Services Compliance

32,02%

42,98%47,71%

0,00%

10,00%

20,00%

30,00%

40,00%

50,00%

60,00%

2012 2013 2014

40






Employer Client: X

Cancer type by number of Enrolees

262

187

75 7549

283

204

83 7154

0

50

100

150

200

250

300

Breast Cancer Prostate Cancer GIT DermatologicalCancer

Lymph Nodes &Lymphoma

2013

2014

41






Employer Client: X

Summary of Risks

11,32%

4,65%1,95%

9,89%

41,01%

11,70%

5,36%3,71%

5,36%

28,66%

0,00%

5,00%

10,00%

15,00%

20,00%

25,00%

30,00%

35,00%

40,00%

45,00%

Hyperlipidaemia Hypertension Diabetes Smoking Obesity

Female

Male

42






Recommendations

and the Way Forward

Focussed approach at Wellness Experiences Days (Dietician)

Online Stress Assessment (early ID of at risk for depression)

Quarterly Wellness Forums (align Bankmed Wellness Strategy with

Employer Group Strategy)

On-going screening (not limited to Wellness Experience Days): employer

driven competition amongst BUs. CEO to lead by example

Regional Strategy for increasing screening Call centre strategy

Move from fragmented to integrated wellness offering

43












necessary change


8. Conclusion

Agenda

44






Health Quality Assessment

Benchmarking exercise in the funding industry

Highlights key quality issues in the SA medical scheme industry

Drives improvement in the delivery of evidence-based medicine

18 participating Schemes in the 2014 HQA

Comprised of 88 benefit options

Represented 6,78 million beneficiaries (77,21% medical scheme

population)

Four categories are evaluated, namely:

Prevention and Screening

Hospitalization

Maternity and New-born

Chronic Disease Management 45












necessary change


8. Conclusion

Agenda

46






The challenge of behaviour change

Individual member’s responsibility

Opportunity to embrace innovative interventions

Regulatory obstacles

Prevention better than cure

Shift away from hospicentricity

Flexibility in response to unintended consequences

47











6. An opportunity for collaboration and a phased response

to necessary change


8. Conclusion

Agenda

48






Phased approach to change

Lessons on collaboration

Acknowledging current reality

Carrying forward successful practices

Interim dispensations in a changing landscape

49












necessary change


8. Conclusion

Agenda

50






Outcome of Tender Process

Strong business case, based on a combination

of the evaluation criteria, to appoint the

successful bidder – which was a new

administrator.

51






Triggers of the Tender Process

The tender process itself was triggered by the following factors and

considerations:

Good Governance: considered good governance practice to occasionally

test the market with a view to evaluating whether or not the Scheme (and

ultimately the members) is / are getting the best value via key outsourced

service providers.

The Scheme also identified a need for a more “Integrated service offering”

An opportunity for the Scheme to refresh its “Service delivery”

requirements, and evaluate proposals from competing bidders

An opportunity to secure a “Competitive price” for the refreshed service

delivery offering, in the best interest of the Scheme and its members

52






Tender Process Outline

Used independent Tender Administrator

Robust process

Compliance with procurement policy

Expert independent input when required

Clear rationale for selection of invited bidders

Closed tender (3 major players) invited based on the

rationale referred to above

A cross-functional Tender Sub-committee

Compliance with relevant regulatory notices

53












necessary change


8. Conclusion

Agenda

54






Conclusion

Acknowledgement of an unsustainable system

Some issues not unique to South Africa

Acknowledgement of other socio-economic factors

Acknowledgement of positives

Medical schemes “price takers”

A call for stakeholders to rise above the inherent tension

and work together

The tone about medical schemes must change

Solutions located in common interests and diverse

insights

Interim dispensations should be part of the solution 55

Thank You

retaining value and quality in a changing …...not-for-profit restricted medical scheme in the...

Documents