COMPETITION COMMISSION HEALTH MARKET INQUIRY TOWARDS SUSTAINABLE HEALTHCARE

Transcription

1 COMPETITION COMMISSION HEALTH MARKET INQUIRY TOWARDS SUSTAINABLE HEALTHCARE 17 May 2016

2 Presenters Kevin Aron Modjadji Tati Dr Laubi Walters CEO Medscheme Holdings CA (SA), MBA Experience in the healthcare and banking industries 15 years with Medscheme Head: Administration B.Cur Honours, BCom Honours, MBL Experience in both public and private healthcare in SA 16 years with Medscheme Head: Managed Care Strategy MBChB MPharmMed Former Professor of Clinical Pharmacology and Dept. of Health Director of Primary Healthcare 21 years with Medscheme Alex Brownlee Head: Actuarial BSc (Hons) FASSA, FFA Local and international healthcare actuarial experience, ITAP, ASSA, IAAHS 9 years with Medscheme Dr Manshil Misra Senior Medical Advisor MBChB, MBA Public and private clinical practice with public health medicine experience in academic and State sectors 2 years with Medscheme Dr Mike Marshall Head: Provider Relations and contracting MBChB Local and international experience in private and public practice 11 years with Medscheme

3 Agenda Part A Who we are What we do How we interact with stakeholders Part B Key challenges Understanding healthcare financing Common language and purpose Part C Recommendations

4 Agenda Part A Who we are What we do How we interact

5 Medscheme An overview 44yr Proven 44-year track record in Southern Africa Largest Black owned managed care provider and administrator, Level 2 B-BBEE More than 3.6 million lives under health administration and managed care 17 South African client schemes (14 restricted schemes & 3 open schemes) ISO 9001 certification in health administration Country wide networks of GPs, specialists, pharmacies full time employees

6 Medscheme Part of a Health Focused Group

7 Medscheme s Vision and Mission Vision Creating a world of sustainable healthcare Mission We create access to sustainable, affordable, quality healthcare through the application of innovation and expertise, delivered as an efficient, seamless experience

8 Agenda Part A Who we are What we do How we interact

9 Medscheme s role

10 Medscheme s Services Administration Membership administration Claims assessing Fund management and secretarial services Member communication services Broker commission processing Legal, governance, risk and compliance Internal audit (ISAE3402) Forensic services Financial management and reporting Incl. credit control management services Enquiries incl. appeals processes Managed Care Hospital Benefit Management Services - Pre-authorisation services - Case Management - Clinical Audit Pharmacy Benefit Management Services - Pre-authorisation - Drug Utilisation Review (DUR) Active Disease Risk Management Services Dental Benefit Management Services - Basic and Specialised Dentistry Managed Care Network Management Services and Risk Management - Networks of General Practitioners, Specialists, Hospitals and Pharmacies

11 Interaction with Client Schemes Being a multi scheme administrator Client schemes determine their own strategy Medscheme s function is to effectively implement each client s individual strategy Dedicated business unit structures are reflective of individual clients needs Services are provided in terms of Service Level Agreements (SLAs) Regular, transparent reporting to schemes of Medscheme s performance to SLAs Contracts with clients include penalties for poor performance Internal and external audits including independent SLA audits Trustee meetings driven by Scheme officials and Medscheme input provided by invitation only Client schemes can contract with any other service providers they choose

12 Key Stakeholders Medical schemes Healthcare service providers 57 external IT interfaces Incl. other administrators and managed care providers Scheme Beneficiaries Third Parties Independent advisors and providers appointed by client schemes Other electronic links incl. Health24 portal Regulators Brokers Independent advisors incl. actuarial firms and other consultancies

13 Member Communication Channels Walk-in Centres Web Services And Adaptive Website Member Event Driven SMS Mobi Statements and apps Written Letters (letters, ad hoc and system generated) Instant Messenger / Web Chat Voice of the Customer Surveys Voice In- and outbound Call Centres s Newsletters and educational material Interactive Voice Response Statements

14 Member Communication S 52 million s sent out to beneficiaries p.a. SMS 28 million SMS sent to beneficiaries p.a. POST 1.8 million letters sent out to beneficiaries p.a. INBOUND CALLS 2.4 million inbound calls received p.a. VOICE OF THE CUSTOMER Average surveys submitted per annum 22% Return rate 89% rated our Service GOOD & EXCELLENT

15 Member Communication Complaints Formalised complaints process Complaints on HelloPeter and social media monitored daily Transparent reporting to the client schemes Appeals Process Formalised appeals process in line with Scheme s mandate Clinical Review Committees (including the inclusion of external consultants and opinions) reviews escalations Voice of the Customer surveys Customer can be a member, trustee, PO or healthcare provider Data analysis and transparent reporting of findings to client schemes and management structure In case of dissatisfaction Analysis of free format questions and call back where concerns were raised Root cause is categorised and process includes: Investigation of sequence of events, Tracking reasons for experience, Remedial action taken

16 Accessibility: Our National Footprint Functions Process authorisations Hold focus sessions with members Resolve members queries Assess refund claims Process membership transactions Enroll new members Member education Scan claims Assist brokers Print statements for members and providers Conduct wellness days Print tax certificates & cards Member visits per Annum

17 Managed Care

18 The Need for Managed Care Already high prevalence of lifestyle disease Population % 4% 8% 88% Cardiovascular % 65% 35% 16% Diabetes % 23% 13% 5% Mental health % 41% 18% 10% Respiratory (Chronic) % 16% 7% 5% Musculoskeletal % 26% 15% 8% Average Age Risk claims per life per year R R R8 246 Ave gross contribution plpy R R R Low co-morbidity index

19 Value Based Healthcare Affordable Volume Access Outcomes The patient journey illustrates the importance of roles and relationships & structural features driving adverse market outcomes, e.g. information asymmetry Value Quality

20 Patient Journey Patient Primary Care Practitioner Disease or injury

21 Coordination of Care and Information Sharing Needed Home Based Care & Community Support Case managers and medical advisory services More Empowered Specialists, Hospitals & Auxiliary Professionals Contracts with ARMs Workplace Integration Productive Interactions Education, Training & Care Pathways Informed Activated Beneficiary More Empowered FP Part of Virtual/Actual Primary Care Teams Contracts with ARMs Patient / Family Education & Counseling Arrows: Information sharing Digital Strategy Including EHR, EMR and PHR Strategic Purchasing & Coordination of Care

22 Patient Journey Patient Primary Care Practitioner Pharmacist Disease or injury Prescription Specialist Confirming diagnosis Pathologist Step down / home care Hospital

23 Our Approach: Population Health Management Framework Patient Activation Stratification of beneficiaries Pro-active communications Active disease risk management (ADRM) Intervention process including lifestyle interventions Digital strategy including PHR Outcomes monitoring & reporting & info sharing Provider Empowerment Managed care network management services and risk management Strategic purchasing & coordination of care Contracting with ARMs Education, training & care pathways Digital strategy & EMR with decision support Outcomes monitoring & reporting & info sharing Other managed care services The relevant benefit management services as well as the disease risk management support services, adhering to CMS accreditation standards, processes, systems and reports Digital strategy including central EHR Outcomes monitoring & reporting & info sharing Cornerstone of integrated administration and managed care capability and capacity Fraud, waste and abuse management Actuarial and clinical policy services BI modelling, analysis and reporting (incl. data warehousing) Member- & providercentric processes Reliable operational IT systems with EHR Legal support

24 The Value of Managed Care Our Experience HIGH RISK BENEFICIARY PREDICTIVE INTERVENTION (TELEPHONIC ONLY) psychologist visits 45.3 per 1000 intervened lives pharmacy visits 219 per 1000 intervened lives specialist visits 3.1 per 1000 intervened lives GP visits 112 per 1000 intervened lives Measurable overall managed care savings: Claims 5 to 10% lower with an ROI consistently > 200% A 10% claims saving results in a 8% saving on contributions HIV/AIDS VIRAL LOAD: Above 80% below 400 copies/ml is considered exceptional inpatient admission cost savings R plpm inpatient admission rate 61 per 1000 intervened lives hospital ALOS 0.28 days ER admission rate 25.7 per 1000 intervened lives chronic medicine costs R36.00 plpm

25 Agenda Part A Who we are What we do How we interact

26 Medscheme s Interaction With Healthcare Professionals

27 How we Engage with GP s and Specialists General Practitioners Medscheme Independent Practitioner Association (IPA) Forum Structured engagement (3 4 times annually) Cooperation agreement Charter Other (less structured) SAMA Individual IPA s Conferences Individual GP s Specialists Medscheme Specialist Forum Structured engagement (3 4 times annually) Terms of reference Other (less structured) Specialist societies Specialist management groups (Healthman / Spesnet) Conferences Individual specialists

28 How we Engage with GP s and Specialists Professional Societies What we discuss Benefits non covered items, exclusions, co- payments Claims administration issues Managed care interventions pre-authorisation process, letters of motivation Interpretation of tariff codes Funding protocols New interventions Challenges Structural & ideological fragmentation of doctor representative organisations Clinical leadership some societies employ CEO s and other rely on leadership from doctors in full time practice Concern of transgressing competition law HPCSA legislation governing how doctors can practice Legislative framework influencing contracting

29 Performance Based Reimbursement PBR components Contracted network Payment arrangement Tiered reimbursement Profiling (REPI 2 ) Cost Quality Peer management

30 Percentage of Scheme rate Performance Based Reimbursement Outcomes Average GP tariff PMB s network vs non network Network Non-network ,0% 40,0% 35,0% 30,0% 25,0% 20,0% 15,0% 10,0% 5,0% 0,0% Percentage improvement in Indicators of Clinical Care from 2007 to 2013: Schemes with GP Networks vs Schemes without GP Networks Cholesterol Colonoscopy TDH screening PAP Smear coverage Conclusions Network plans Non-network plans HbA1c coverage Monitoring nephropathy Members are protected against co-payments & scheme protected against payment at cost for PMB s. Networks seemed to perform better on quality metrics than non networks Marginal overall improvement in quality Future models will need increased adoption of Health Information Technology. Need to address structural issues in the healthcare delivery model. Source: Medscheme

31 Specialist Contracting Dynamics 1. Open to any willing specialist 2. Essentially a payment arrangement with the objective of; Protecting members against co-payments Mitigating payment at cost for PMB s 3. Uptake related to quantum of offer Number of specialists contracted (excl. anaesthetists*) Scheme A 130% scheme rate Scheme B 165% scheme rate In addition Scheme B has been able to contract an additional 845 anaesthetists at a rate of 235% of scheme rate for the anaesthetic unit 140% for the clinical consult and procedure unit.

32 Specialist Contracting Challenges in measuring specialist performance 1. Measuring quality outcomes 2. Measuring entire care process versus a specific procedure 3. Accommodating diversity of practice within a specific specialty Global fee model for hip and knee replacements

33 Medscheme s Interaction With Hospitals

34 Hospital Landscape Hospital expenditure as a % of total expenditure 40% 35% 30% 25% 20% 15% 10% 5% 0% % Market share (by expenditure) per facility type & procedure Acute hospitals Day Clinics Sub-acute Facilities Mental health facilities Cataracts Hospital expenditure by facility type 1% 2% 1% 96% Sub acute facilities (049) Mental health facilities (055) Day hospitals (076 & 077) Acute hospitals (057 & 058) Herfindahl Hirschman Index (HHI) market concentration of hospital groups by province Source: CMS reports Medscheme data

35 How we Engage with Hospitals Structured engagement Networks / DSPs Negotiations Engagement Alternative Reimbursement Models Profiling

36 How we Engage with Hospitals Hospital Profiling No standardisation of descriptions and calculations of quality metrics as published by Hospital Groups in their annual reports ,17 2,17 8,6 Ventilator Associated Pneumonia 2,9 0,58 0,55 0,09 0,45 0,32 Surgical Site Infection 2,4 Central Line Associated Bloodstream Infection 3,2 Cathheter Associated Urinary Tract Infection 2,7 Healthcare Associated Infections 1,18 FIM/FAM 2,66 Patient incident rate 4,71 Employee incident rate Hosp Group 1 Hosp Group 2 Hosp Group 3 Hosp Group 1 Hosp Group 2 Hosp Group 3 Reporting period 1 October - 30 September 1 October - 30 September 1 April - 31 March Ventilator Associated Pneumonia per ventilator days per ventilator days per device days Surgical Site Infection per theatre cases per theatre cases Central Line Associated Bloodstream Infection per central line days per line days since 2012 per device days Catheter Associated Urinary Tract Infection per catheter days per device days Healthcare Associated Infections per PPD's per PPD's Source: Annual Reports

37 Hosp Group A Hosp Group B Hosp Group C How we Engage with Hospitals Structured engagement Networks / DSPs Negotiations Engagement Carve outs Modifiers Clinical exclusions Stop losses Line item data Alternative Reimbursement Models Profiling 0% 50% 100% Fee for Service Fixed Fees Per Diems

38 Agenda Part B Key challenges Understanding healthcare financing Common language and purpose

39 Understanding healthcare financing

40 Inherent Complexity in Health Insurance Number of claimants per Non-claimants Claimants Life Assurance Car Insurance Health Insurance Insurer & policyholder Low anti-selection 1 payment at death Insurer & policyholder Low anti-selection 1 defined payment Insurer & policyholder & facility & doctor & pharmacist High risk of anti-selection Multiple codes, subject to protocols, PMBs, etc. Unknown incidence and cost per claim Complex human body

41 Why are Benefits so Complex? From Simple Financial Limits to Clinical-Criteria Defined Benefits From simple financial limits to a hybrid design with complex clinical-criteria defined benefits Financial limits Co-payments Conditions covered / protocols Reimbursement rate Not for PMBs, which are clinically defined Can be overridden on clinical grounds Reg15(h)(i)(c) Clinical criteria used to define benefit need PMBs at cost Underpinned by social solidarity principles: Clinically defined benefits are more equitable

42 But Benefit Restrictions are Critically Important Benefits, including protocols/formularies are 2 nd largest determinant of scheme claims expenditure 1 Health Profile of members Benefit limits and protocols 2 3 Other cost drivers If no benefit restrictions were applied Fewer non-pmb benefits or Higher contributions Inequitable allocation of limited resources, favouring those with PMBs or higher income The aim is to efficiently offer the widest cover to the whole population with the greatest healthcare need

43 Why are there so many Benefit Options? Meeting unique customer needs Legacy options Different benefit packages meet different needs Setting all benefit limits at maximum levels to cater for all members in one benefit option is simply not affordable Even a scheme with a poor profile can compete by opening a new benefit option The existing poor profile members remain in so called legacy options Thus, whilst many schemes appear to have many benefit options, typically only a few are actively marketed It is typically better to not close down legacy options, since the financial impact on the remaining scheme members is negative Most parties would prefer to close legacy options, if not for reasons above

44 Common Language and Purpose Healthcare Professional Tariff Coding Challenges

45 Lack of a Common Language: Tariff Coding Medical codes describe the context and content of clinical encounters. They form the basis of communication between funders and providers of healthcare. Whereas some codes like those for the identification of diagnoses are standardized, there is no common coding structure, including terms of use, for professional services rendered. The standards used by providers and funders are not aligned. SAMA and Professional Societies maintain coding structures that underpin billing. Doctor bills code x Individual funders maintain their own coding structures for purposes of payment, using RPL codes as the foundation. Funder says x invalid Patient/member liable for doctor s account

46 Lack of a Common Language: Tariff Coding What is the problem with the use of tariff codes? Void of Standardized Industry Coding and Billing No industry review of codes and/or their associated RVUs in more than 10 years. Codes do not reflect current practice. Some codes have become obsolete as procedures are outdated. New procedures have no associated codes. Why are funders not uniformly adopting SAMA s coding structure? It represents the interests of the profession SAMA is not a statutory body. Professional Societies and SAMA coding guidelines are not always aligned.

47 Common Language and Purpose PMB Challenges

48 PMBs: Lack of a Common Understanding State doctor We support international clinical guidelines. It is a PMB. Technology company representative Doctors in State use our technology. It is PMB. Patient My doctor says it is a PMB Private doctor The condition is a PMB. That is why my treatment is a PMB. Funder It is only a PMB if

49 Determining a PMB Diagnosis Is the diagnosis a PMB diagnosis? Was it related to an emergency? Treatment Does the treatment fall within broad descriptor of the relevant DTP? Are there limitations to treatment detailed in Annexure A? Clinical condition Does the patient qualify for the healthcare service on the basis of clinical condition according to prevailing State practice PMB YES or NO? DTP: Diagnosis and Treatment Pairs

50 Determining a PMB DSP Should care have been obtained from a Designated Service Provider (DSP)? If yes, was there involuntary use of a non-dsp? Protocols Are there managed care protocols or formularies that apply? Exceptions Must exceptions to such protocols and formularies be considered on clinical grounds? PMB PAYMENT IN FULL YES or NO?

51 Prescribed Minimum Benefits: Administering PMBs Payment of all claims linked to a PMB diagnosis would result in overpayment, inefficient use of limited resources and ultimately inequity. Manually adjudicating all claims for PMB eligibility once insured benefits are exhausted is administratively impossible. Accurate and efficient PMB payment is ensured through a hybrid of operational processes. Pay all care linked to PMB diagnoses at cost Hybrid model of: Automation Pre-authorisation Contracting Exception management Pay any PMB above standard scheme rules only on preauthorisation

52 Common Language and Purpose Funding Guideline Challenges

53 Clinical Standards: Differing Views on Best Practice Hyperlipidaemia Guidelines SA Clinical Guidelines European Clinical Guidelines American Clinical Guidelines Titrate statin dose according to LDL-C target Target defined in terms of patient s 10-year risk of any CVS event. Targets defined in terms of LDL-C cut-off values (ranging from <1.8 to <3 mmol/l) Titrate statin dose according to LDL-C target Target defined in terms of patient s 10-year risk of fatal atherosclerotic event. As for SA guidelines. For very high risk patients, LDL-C reduction of >50% is alternative NO treatment target The expert panel was unable to find randomized controlled trial evidence to support use of targets. Intensity of statin dose according to estimated 10-year risk of atherosclerotic CVS event Managed care protocols must be developed on the basis of evidence-based medicine, taking into account considerations of costeffectiveness and affordability

54 Clinical Standards: Best Practice vs Funding Guidelines PMB Algorithm Hyperlipidaemia SA Essential Medicines List Titrate statin dose according to LDL-C target Treatment defined in terms of patient s 10- year risk of any CVS event. Target defined in terms of LDL-C <=3mmol/l or reduction of at least 45% from baseline No treatment target Treatment defined in terms of patient s 10- year risk of any CVS event. Use statin dose that lowers LDL-C by at least 25% (patients with very high cholesterol should be referred) Managed care protocols must be developed on the basis of evidence-based medicine, taking into account considerations of cost-effectiveness and affordability

55 Agenda Part C Recommendations

56 Recommendations Establishing a common language Facilitate value based contracting Overhaul the PMBs Establish an independent authority to define the tariff coding, the Minimum Reference Price to be used as well as define quality standards Benefits clearly defined relative to industry Minimum Reference Price List (MRPL) Healthcare practitioners and providers to transparently display their billing rates relative to MRPL Regulation to ensure the transparent reporting of healthcare quality and cost information is recommended Further recommendations

57 Recommendations Establishing a common language Facilitate value based contracting Overhaul the PMBs Alignment of differing legislation to allow for selective contracting based on value Allow employment of practicing healthcare professionals by corporate entities Public disclosure of any potential conflicts of interest Further recommendations

58 Recommendations Establishing a common language Facilitate value based contracting Overhaul the PMBs Simplify PMBs Benefit definitions Level of care Align to NHI policy direction PMBs paid in line with scheme rates, subject to MRPL Further recommendations

59 Recommendations Establishing a common language Facilitate value based contracting Overhaul the PMBs Implement Risk Equalisation Fund Further recommendations Mandatory membership with income crosssubsidisation Revise solvency framework

60 THANK YOU