Transcript Lessons from Zimbabwe

Impact of External Factors on the Cost of Healthcare
By Gary Scott
NAMAF 8th Annual Conference
23 September 2014
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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
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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
2.7%
Surgeon
2.4%
Orthopaedics
3.4%
Spec.Physician
4.6%
26.5%
Ophthalmology
Obstetrics and Gynaecology
4.7%
Paediatrics
Otorhinolaryngology
6.1%
Neurosurgery
Cardio Thoracic Surgery
Maxillo-facial and Oral Surgery
Urology
9.6%
Plastic and Reconstructive Surgery
Nuclear Medicine
16.9%
Neurology
Psychiatry
9.9%
Radiation Oncology
11.3%
Cardiology
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Breakdown of South African Specialist Costs
Using 2013 admissions across NAMAF medical aid funds
7.0%
Surgeon
2.3%
12.6%
Orthopaedics
1.1%
1.2%
Spec.Physician
Ophthalmology
7.8%
Obstetrics and Gynaecology
Paediatrics
Otorhinolaryngology
6.0%
21.7%
Neurosurgery
Cardio Thoracic Surgery
0.9%
Maxillo-facial and Oral Surgery
4.0%
Urology
Plastic and Reconstructive Surgery
Nuclear Medicine
7.0%
Neurology
7.7%
3.4%
Psychiatry
Radiation Oncology
8.5%
3.4%
5.2%
Cardiology
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% of admissions performed in South Africa
Using 2013 admissions across NAMAF medical aid funds
100.0%
80.0%
60.0%
40.0%
20.0%
0.0%
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Lessons from Zimbabwe
Drivers of medical tourism in Zimbabwe (Mrs Linda Mukusha
presentation at BHF Conference)

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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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Lessons from Zimbabwe
Drivers of medical tourism in Zimbabwe (Mrs Linda Mukusha
presentation at BHF Conference)

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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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Lessons from Zimbabwe
Mrs Linda Mukusha presentation at BHF Conference (cont.)
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Lessons from Zimbabwe
How has the market received medical tourism

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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
3.00
2.50
2.00
Namibia
SA
1.50
1.00
0.50
-
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Concluding thoughts
Medical tourism:

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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
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Medical Malpractice Insurance
Focus on Obstetric care
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Breakdown of Namibian Obstetric Care
Using 2013 admissions across NAMAF medical aid funds
2.2%
Windhoek
1.0%
Swakopmund
2.5%
Walvis Bay
4.0%
Ongwediva
Otjiwarongo
5.8%
Oshakati
Tsumeb
Rehoboth
Gobabis
Ondangwa
Keetmanshoop
13.5%
Windhoek West
Grootfontein
64.4%
Luderitz
Rundu
Kuisebmond
Mariental
Oranjemund
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Breakdown of Namibian Obstetric Care
Count of deliveries reimbursed by NAMAF medical aid funds in 2013
1,390
GPs
Specialists
342
308
157
104
18
13
17
3
8
2
18
9
51
66
27
4
54
28
15
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Breakdown of Namibian Obstetric Care
% caesareans reimbursed by NAMAF medical aid funds in 2013
88%
67%
69%
83%
85%
85%
81%
67%
81%
76%
67%
56%
50%
47%
39%
35%
25%
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Lessons from South Africa – obstetric care
Distributions between GP and Specialist in attendance
Namibia
South Africa
17%
71%
GP
Specialist
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Medical Malpractice insurance
Medical Protection Society (MPS) 2014 rates
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Obstetrics – private specialist practice
Neurosurgery, spinal surgery
Orthopaedic surgeon
Cardiac, general surgery
Obstetrics – General Practitioner*
ENT surgeon
Procedural – General Practitioner*
Non procedural – General Practitioner*
R330,000
R318,190
R131,080
R130,000
R92,260
R70,530
R15,820
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:
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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
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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:
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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
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