the costing of prescribed minimum benefits

Centre for Actuarial Research

The Costing ofPrescribed Minimum

Benefits

January 2003

Centre forActuarial Research

Söderlund & Peprah (1998) Minimum package defined in terms of diagnosis-treatment

pairs. ICD-10 codes for diagnosis element and CPT-4 codes for treatment element.

The “core inpatient package” would cost R 502 pbpa in 1998 prices.

Data on outpatient services could not be broken down into diagnosis-treatment pairs. Assumption that experience of mine hospital users would apply. Expected outpatient costs of R 183 pbpa.

Estimated that total inpatient and outpatient package would cost R 685 pbpa, for those currently without medical scheme cover.


Definition of the PMB Package

Söderlund & Peprah (1998) Minimum package defined in terms of diagnosis-treatment

pairs. ICD-10 codes for diagnosis element and CPT-4 codes for treatment element.

1999 Regulations under the Medical Schemes Act No codes in Regulation. Subjective interpretation of PMBs by each scheme.


Comprehensive Crosswalk

Included (IN) as a benefit in the PMB package Excluded (OUT) as a benefit in the PMB package NC (not classifiable) with respect to the PMB package


PMB Study Data

Data from Medscheme Data Warehouse Data covers 2001 calendar year, extracted in July 2002 Data fully run-off, no adjustment for IBNR 90 options 31 schemes 18.071 million beneficiary months of data Average exposure of 1,505,917 beneficiaries


ATotal admissions

311,783hospital costs R 1,752,659,876related costs R 684,503,015Total Costs R 2,437,162,891Average cost per admission R 7,817

B CComplete data Incomplete data

270,616 41,167hospital costs R 1,534,270,653 hospital costs R 218,389,223related costs R 614,289,970 related costs R 70,213,045Total Costs R 2,148,560,623 Total Costs R 288,602,268Average cost per admission R 7,940

Average cost per admission R 7,011

Data Sets

Chapter Analysis

Pricing


Cluster Analysis


Cluster Analysis Different clusters experience different benefit utilisation,

costs and disease profiles. Provider behaviour differs by cluster, even within the same hospital facility.

Distinct clusters: High contains options with older, 'whiter' members with

high utilisation; Medium-older contains options with medium utilisation

and older members; Medium-younger contains options with medium

utilisation and younger members; and Low contains options with younger, 'blacker' members

with low utilisation.


Beneficiaries in Study


8.8%

9.6%

10.1%

71.6%

High

Medium-older

Medium-younger

Low


Contributions and Benefits

2010

1593

11881074

1787

1121902

732

0

500

1000

1500

2000

2500

High MediumOlder

MediumYounger

Low

Cluster

Ran

ds

pm

pm

Contributions

Benefits

Q1 2002 Data



26.3%

18.4%

9.7%

5.0%

8.5%

0%

5%

10%

15%

20%

25%

30%

Hig

h

Me

diu

m-

old

er

Me

diu

m-

you

ng

er

Lo

w

Tota

l

Cluster

Pro

po

rtio

n

High

Medium-older

Medium-younger

Low

Total


Proportion of Beneficiaries Over Age 55


15.8% 16.3%22.2%

77.1%

61.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Hig

h

Me

diu

m-

old

er

Me

diu

m-

you

ng

er

Lo

w

Tota

lCluster

Pro

po

rtio

n

High

Medium-older

Medium-younger

Low

Total

Proportion of African/Black Beneficiaries



Applicability to the Industry


Simplified Age Profiles of the Study and Industry


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Hig

h

Me

diu

m-o

lde

r

Me

diu

m-

you

ng

er

Lo

w

Stu

dy

Tota

l

Hig

h a

nd

Me

diu

m

Ind

ust

ry

SH

I+P

S

55 +

20 - 54

0 - 19


Detailed Age Profile of the Industry and Study

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

11%

12%

13%

0 -

4

5 -

9

10

- 1

4

15

- 1

9

20

- 2

4

25

- 2

9

30

- 3

4

35

- 3

9

40

- 4

4

45

- 4

9

50

- 5

4

55

- 5

9

60

- 6

4

65

- 6

9

70

- 7

4

75

+

Pro

po

rtio

n

Registrar's Returns 2000 Adjusted OHS99 Unadjusted CARE PMB Study


Ethnicity Summary

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Hig

h

Me

diu

m-

old

er

Me

diu

m-

you

ng

er

Lo

w

To

tal

Hig

h a

nd

Me

diu

m

Ind

us

try

SH

I+P

S

White

Other

Coloured

African/Black

Indian/Asian


Weighted Industry Total Study contains more Low cluster beneficiaries than the

industry. Re-weighted total to give closer demographic fit to industry

data: 100% High cluster 100% Medium-older cluster 100% Medium-younger cluster 50% Low cluster

Weighted industry total gives exact matching of beneficiaries over age 55; closer to ethnicity

Low cluster is more relevant to the emerging low-cost option environment.


Cost of PMBs by Cluster


Admission Count by Status


47.2%

14.2%

38.6%

Included

Not Classif iable

Out



Claim Value by Status


55.1%

12.8%

32.1% Included

Not Classif iable

Out



R 7,817

R 6,502

R 9,127

R 7,041

R 0

R 2,000

R 4,000

R 6,000

R 8,000

R 10,000

Included Not Classifiable Out Total ClaimsPaid

Average Cost by Status



Proportion of Status by Cluster

older younger

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

High Medium - Medium - Low Total

Pro

po

rtio

n

Out

Not Classifiable

Included


87.90

108.57

141.92

118.84

97.69

0

50

100

150

High Medium -older

Medium -younger

Low Total

Inci

denc

e pe

r 10

00

Incidence of PMB Admissions by Cluster



Average Cost of PMBs by Cluster


R 11,478R 11,372

R 9,043

R 8,270R 9,127

R 0

R 2,000

R 4,000

R 6,000

R 8,000

R 10,000

R 12,000

R 14,000

High Medium -older

Medium -younger

Low Total

Av

era

ge

Co

st


Cost of PMBs by Disease Chapter


Proportion of Admissions by Disease Chapter

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

CN

S

Eye

EN

T

Res

pira

tory

Car

diac

GIT

HS

P

MS

/Tra

um

a

Ski

n/B

rea

st

End

ocri

ne

Gen

itour

inar

y

Gyn

aeco

logy

Obs

tetr

ics-

Neo

nat

e

Hae

m-I

nfe

ct

Men

tal I

llnes

s

OUTINCLUDED


Proportion of Claim Value by Disease Chapter


OUTINCLUDED

0%

20%

40%

60%

80%

100%

CN

S

Eye

EN

T

Res

pira

tory

Car

diac

GIT

HS

P

MS

/Tra

um

a

Ski

n/B

rea

st

End

ocri

ne

Gen

itour

inar

y

Gyn

aeco

logy

Obs

tetr

ics-

Neo

nat

e

Hae

m-I

nfe

ct

Men

tal I

llnes

s


Proportion of Total Cost of PMBs by Disease Chapter


CNS9.5%

Eye3.9%

ENT1.6%

Respiratory10.5%

Cardiac12.8%

GIT12.2%

HSP3.2%

MS/Trauma6.3%

Skin/Breast3.4%

Endocrine2.2%

Genitourinary2.7%

Gynaecology4.5%

Obstetrics - Neonate17.3%

Mental Illness3.2%

Other2.6%

Haem-Infect3.9%



Average Cost of PMBs by Disease Chapter

R 0

R 2,000

R 4,000

R 6,000

R 8,000

R 10,000

R 12,000

R 14,000

R 16,000

R 18,000

R 20,000

CN

S

Eye

ENT

Res

pira

tory

Car

diac GIT

HS

P

MS

/Tra

uma

Ski

n/B

reas

t

Endo

crin

e

Gen

itour

inar

y

Gyn

aeco

logy

Obs

tetr

ics

- N

eona

te

Hae

m-In

fect

Men

tal I

llnes

s

Oth

er

Tota

l

Av

era

ge

Co

st



Average Cost by ChapterHigh vs. Low Clusters

R 0

R 5,000

R 10,000

R 15,000

R 20,000

R 25,000

CN

S

EY

E

EN

T

Res

pira

tory

Car

diac

GIT

HS

P

MS

/Tra

uma

Ski

n/br

east

End

ocrin

e

Gen

itour

inar

y

Gyn

aeco

logy

Obs

tetr

ics-

Neo

nate

Hae

m-I

nfec

t

Men

tal i

llnes

s

Oth

er

Ave

rag

e C

ost

Low

High


Differences in Cluster Costs Not simply different costs charged by providers for the

same diagnoses. Issue is much more complex. Very different age and demographic profiles. Age difference would account for significant differences in

diagnoses, e.g. mainly meningitis in Low cluster and stroke in High cluster in CNS chapter.

Condition perhaps not diagnosed as frequently in Low cluster due to differences in access to doctors: Low cluster biased towards GPs , High cluster prefer specialists.

Also benefit design, severity of disease and provider and patient demand.


Top Five Disease ChaptersHigh vs. Low Cluster

ChapterPMB Claims

PaidCount of PMB Admissions

Average PMB Cost per

Admission

Proportion of Total

PMBClaims

Cardiac R 38,300,784 1,665 R 23,003 22.0%GIT R 21,487,290 2,331 R 9,218 12.3%CNS R 21,895,197 1,247 R 17,558 12.6%Respiratory R 16,430,848 1,571 R 10,459 9.4%EYE R 11,939,964 1,409 R 8,474 6.9%

HIGH

ChapterPMB Claims

PaidCount of PMB Admissions

Average PMB Cost per

Admission

Proportion of Total

PMBClaims

Obstetrics-Neonatal R 150,089,803 15,351 R 9,777 21.1%Respiratory R 83,372,298 11,645 R 7,159 11.7%GIT R 82,341,347 11,225 R 7,336 11.6%Cardiac R 63,010,421 3,952 R 15,944 8.9%CNS R 59,661,085 5,191 R 11,493 8.4%

LOW


Diagnoses by Disease Chapter

Top 10 diagnoses (ICD-10 codes) in the PMB schedule, ranked by claim value (i.e. total cost), usually account for more than 70% of total cost in each chapter.

Surprising since most chapters contain approximately 100 diagnoses (ICD-10 codes).

Probably a reflection of the state of coding in SA, rather than a true concentration of diagnoses.


Pregnancy and Childbirth

ICD-10 CODE

ICD10 CODE LABEL Total CostsProportion of Total claim

value

Count of Admissions

Average Cost per

AdmissionO82 Single delivery by caesarean section R 43,222,469 21.03% 3,920 R 11,026

O80 Single spontaneous delivery R 22,698,932 11.04% 3,237 R 7,012

O82.9 Delivery by caesarean section, unspecified R 22,437,961 10.92% 1,993 R 11,258

O80.9 Single spontaneous delivery, unspecified R 19,409,924 9.44% 2,623 R 7,400

P22.9 Respiratory distress of newborn, unspecified R 14,744,032 7.17% 461 R 31,983

O82.0 Delivery by elective caesarean section R 13,678,782 6.65% 1,192 R 11,475

O80.0 Spontaneous vertex delivery R 10,233,464 4.98% 1,389 R 7,368

P22 Respiratory distress of newborn R 8,460,302 4.12% 289 R 29,274

P07.3 Other preterm infants R 8,323,304 4.05% 225 R 36,992

O82.1 Delivery by emergency caesarean section R 7,830,086 3.81% 667 R 11,739Total claim value of top ten conditions R 171,039,257 83.21% 15,996 R 10,693

Remaining 257 disease classifications R 34,522,317 16.79% 4,574 R 7,548

Total claim value R 205,561,574 100.00% 20,570 R 9,994


Cost of PMBs by Age


Age Profile of Study

0.00%

5.00%

10.00%

15.00%

0-1

1-5

5-10

10-1

5

15-2

0

20-2

5

25-3

0

30-3

5

35-4

0

40-4

5

45-5

0

50-5

5

55-6

0

60-6

5

65-7

0

70-7

5

75+

TotalHighMedium-olderMedium-youngerLow


Age Profile Beneficiaries Admitted for PMBs

0.00%

5.00%

10.00%

15.00%

20.00%

0-1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75+



Incidence of PMB Admissions by Age

0

50

100

150

200

250

300

350

400

450

0-1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75+

Inci

den

ce



Average Cost of PMBs by Age


0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

0-1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75+

All

ages

Ave

rag

e C

os

t

R9 127

Average Cost for All

Ages


R 0

R 2,000

R 4,000

R 6,000

R 8,000

R 10,000

R 12,000

R 14,000

R 16,000

R 18,000

0-1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75+

Aera

ge C

ost

in R

an

ds


Average Cost of PMBs by Age



Raw Price of PMBs


R 1,318.70 R 1,214.46

R 823.17R 659.27

R 786.80

R 310.33

R 137.02

R 158.61

R 67.65

R 104.76

R 0

R 500

R 1,000

R 1,500

R 2,000

High Medium -older

Medium -younger

Low Total

SET C PMB

SET B PMB

R 1629.03

R 1351.49

R 981.79

R 726.92R 891.56

Annual PMB Price by Cluster(pbpa)



Raw PMB Price by Age (pbpa)


R 0

R 500

R 1,000

R 1,500

R 2,000

R 2,500

R 3,000

R 3,500

R 4,000

R 4,500

R 5,0000-

1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75+

All

ages

SET C PMB

SET B PMB

R 891.56 pbpa

Average Price for All

Ages


R 0

R 1,000

R 2,000

R 3,000

R 4,000

R 5,000

R 6,000

0-1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75+


Raw PMB Price by Age and Cluster (pbpa)



Raw PMB Price by Wider Age Bands (pbpa)


R 0

R 500

R 1,000

R 1,500

R 2,000

R 2,500

R 3,000

< 20 20-54 >55 Total Adults All ages

SET C PMB

SET B PMB

R 368.69

R1 017.71

R2710.94

R1264.53

R 891.56


Adjustments to the Raw Price of the

PMB Package


Adjustments to Raw Price Uncertainty in Definition of the PMB Package

Recoding the OUT Group Recoding the NC Group

Costs of hospital management programme Costs of hospital and related claims administration Costs of chemotherapy and dialysis Costs related to HIV/AIDS Estimate of the cost of ambulatory care Costs of ambulatory administration Reduction for cost of delivery in the public sector


Recoding of Out Group Coding originally done by Söderlund was open to debate

among healthcare professionals. No clear definitions in Act so ICD-10 codes placed into IN,

OUT or NC on a subjective basis. Reviewed all 1 614 ICD-10 codes classified as OUT. New coding moved 19.8% of admissions of OUT group to

IN group. Claim value was 27.0% of the original OUT category. Raw price for PMBs for all clusters increases from R 786.80

pbpa to R 910.14 pbpa, an increase of 13.5%.

Recommendation: allow for 27.0% of the OUT category by value to be included in the final price.


Recoding of NC Group

NC group is more complicated to recode, as many conditions need to be linked to CPT-4 codes.

Recommendation: stress-test final price using various estimates of proportion of NC that might be included in a better-defined PMB package.

Recommended estimate is to include 20% of the NC group by value in the final price.


Hospital Management Costs

Price per benficiary per

month


annum


month


annum

High R 5.43 R 65.18 R 2.47 R 29.63

Medium-older R 4.55 R 54.65 R 2.07 R 24.81

Medium-younger R 4.16 R 49.98 R 1.89 R 22.66

High and Medium R 4.69 R 56.24 R 2.13 R 25.53

Low R 3.17 R 38.05 R 1.53 R 18.35

Total R 3.60 R 43.22 R 1.70 R 20.39

Cluster

Total Hospital Management PMB Hospital Management


Hospital and Related Claims Administration


month


annum


month


annum

High R 6.12 R 73.46 R 2.78 R 33.39

Medium-older R 5.13 R 61.59 R 2.33 R 27.96

Medium-younger R 4.69 R 56.33 R 2.13 R 25.54

High and Medium R 5.28 R 63.39 R 2.40 R 28.78

Low R 3.57 R 42.88 R 1.72 R 20.68

Total R 4.06 R 48.71 R 1.92 R 22.98

Cluster

Total Hospital and Related Claims Administration

PMB Hospital and Related Claims Administration


Chemotherapy and Dialysis

Treatable malignancies and chronic renal failure most frequently managed in outpatient setting.

Clarity in Regulation November 2002 that these are included in PMBs.

Figures described as “very preliminary”. Need further work.

Recommendation: use R12 pbpa for chronic renal failure and R36 pbpa for chemotherapy.


Regulations November 2002

Note: (2A) In respect of treatments denoted as “medical management”, note (2) above describes the standard of treatment required, namely “prevailing hospital-based medical or surgical diagnostic and treatment practice for the specified condition”. Note (2) does not restrict the setting in which the relevant care should be provided, and should not be construed as preventing the delivery of any prescribed minimum benefit on an outpatient basis or in a setting other than a hospital, where this is clinically most appropriate.


Costs related to HIV/AIDS

Only 9 admissions coded 168S (Diagnosis: # HIV-Associated Disease).

Confidential data from Aid-for-AIDS programme will not be obvious.

Costs of related conditions and complications are identified in categories such as pneumonia, encephalitis, TB etc. Available for further analysis.

Study almost certainly incorporates the cost and pricing of hospitalisation of symptomatic AIDS, as at 2001.

Recommendation: Allow for impact of increased hospitalisation for HIV/AIDS in later stages of epidemic. Obtain advice from Actuarial Society of South Africa’s AIDS Subcommittee.


Estimate of Additional Cost of Ambulatory Care

Condition Non-hospital, Non-drug RequirementsEstimate of

Additional Costs

PregnancyAntenatal visits and care including office- and laboratory-based investigations such as VDRL and ultrasound

R 2,500 per patient per episode

AsthmaCosts of GP, Specialist, Casualty Dept visits, nebulisers, asthma pumps, lung function tests

R 1,900 per patient per year

DiabetesCosts of GP, Specialist, Dietician and other provider visits, glucometers, test strips, laboratory investigations such as HbA1c


HyperlipidaemiaCosts of GP and Specialist visits plus blood tests and related clinical tests such as ECGs


EpilepsyCosts of GP and Specialist visits, EEGs and drug levels



Ratio of Ambulatory to Inpatient Expenditure

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

Aus

tral

ia

Aus

tria

Bel

gium

Can

ada

Cze

ch R

epub

lic

Den

mar

k

Finl

and

Fran

ce

Ger

man

y

Icel

and

Italy

Japa

n

Kor

ea

Luxe

mbo

urg

Net

herl

ands

New

Zea

land

Nor

way

Spa

in

Sw

itzer

land

Turk

ey

Uni

ted

Sta

tes

Source: Van den Heever using OECD database

Söderlund (1998) used 36.5%


Estimate of Ambulatory Care

Amount paid to hospital groups, less admissions, was R314 million. Includes out-patient visits, on-going tests performed in a hospital setting, dispensing from the hospital pharmacy, emergency room visits for conditions such as asthma and diabetes, and costs for certain dialysis centres.

Chemotherapy and dialysis separately estimated. Caution overlap with CDL package.

Recommendation: use 15% as estimate for ratio of other ambulatory expenditure to in-patient expenditure for the PMB package, excluding the CDL package.


Ambulatory Administration

Scanty information. Level of pre-authorisation and management will be much lower and will apply only to certain tests. Administration of claims will require much less intensive activity.

Recommendation: If the other ambulatory expenditure estimate is held at the recommended level of 15%, then use 10% of the non-health care costs of the in-patient PMB package, as the estimate for the costs of ambulatory administration.


Delivery of PMBs in the Public Sector


Public Sector vs. Private Sector Costs: PAWC Study of Selected Conditions

PMB Study

UPFS Total (2002 tariffs)

BHF Total (2002 tariffs)

Low - LOS comparative with

BHF

UPFS (2002) Relative to BHF

(2002)

PMB Study (2001) Relative to BHF

(2002)

Appendectomy R 3,115 R 5,421 R 3,836 57.5% 70.8%

Unstable angina; coronary angiogram; PTCA R 9,284 R 76,866 R 24,735 12.1% 32.2%

Cataract and IOL R 1,605 R 32,609 4.9%

CABG x3, harvesting saphenous veins R 31,439 R 111,296 28.2%

Confinement - C/section R 6,494 R 10,015 R 11,436 64.8% 114.2%

Confinement - NVD R 5,571 R 6,211 89.7%

Congestive Cardiac Failure R 2,720 R 4,657 R 8,036 58.4% 172.6%

Gastroscopy - epigastric pain R 1,178 R 798 147.6%

Pneumonia R 2,583 R 3,366 R 3,854 76.7% 114.5%

Colonoscopy - Lower GI bleed R 1,178 R 571 206.3%

Tonsillectomy R 2,584 R 1,962 R 3,301 131.7% 168.3%

Myocardial Infarction R 7,962 R 47,137 R 6,986 16.9% 14.8%

Hysterectomy -mennorhagia R 7,950 R 17,067 46.6%

Laparotomy - large bowel obstruction (partial colectomy)

R 12,723 R 16,938 75.1%

PAWC Comparisons

Procedure / Diagnosis


Setting and Population Claims PaidCount of

Admissions

Average Cost per

AdmissionPublic sector District Hospital (estimate)

R 3,820

Public sector Academic Hospital (estimate)

R 4,752

Private sector High Cluster (Actual cost all admissions)

R 2,363,000 292 R 8,092

Private sector Low Cluster (Actual cost all admissions)

R 12,498,159 1,639 R 7,625

Private sector High Cluster (Actual cost for 4 days or less)

R 1,790,051 258 R 6,938

Private sector Low Cluster (Actual cost for 4 days or less)

R 9,187,697 1,413 R 6,502

Public vs. Private sector Costs for Appendicectomy

34.08% higher than public sector


Length of Stay for Appendicectomy for Low Cluster

86.2% hospitalised for 4 days or less. Maximum stay was 43.5 days.

1947

161

650763

8

0

100

200

300

400

500

600

700

800

900

2 4 6 8 10 12 12+

Length of Stay in Days

Co

un

t o

f A

dm

issi

on

s

Complications


PMB Cost in the Public Sector

Studies available use theoretical cases. Attempts to compare actual costs of public and private

sector admissions uncovered unexpected finding that not all provinces were billing using UPFS system in 2001.

Need to definitively determine the relationship between UPFS costs in the public sector and costs in the private sector. DoH study now underway.

Recommendation: use 70% of PMB price for delivery of PMB Inpatient package and PMB Outpatient package in public sector. Adjust in negotiations with provincial authorities.


Full Price of Existing PMB

Package


Full Price of PMB Package

Four components : In-patient PMB package price based on full data in

study (high degree of certainty) Portion of price for which uncertainty exists in PMB

definition (proportion to include of NC and OUT) Margin added for ambulatory costs Non-healthcare costs.

Note: Prices should not be used blindly in pricing work. Contact a professional for assistance.


Full Price of PMBs (excl CDL)

R 0.00

R 500.00

R 1,000.00

R 1,500.00

R 2,000.00

R 2,500.00

High Medium-older

Medium-Younger

High andMedium

Low TotalStudy

WeightedTotal

Per

Ben

efi

cia

ry P

er

An

nu

m

Non-healthcare costsAmbulatory packageUncertainty in PMB definitionIn-patient PMB package

R1 343.43

R1 479.04

R2 432.41

R1 100.08

R2 010.90

R1 489.49

R1 956.01



Full Price PMB Package (excluding CDL)

Price per beneficiary per annum (in 2001 Rand terms)

HighMedium-

olderMedium-Younger

High and Medium

LowTotal Study

Weighted Total

Total Inpatient package R 2,076.97 R 1,709.86 R 1,256.20 R 1,662.21 R 917.01 R 1,128.88 R 1,246.95

Total Outpatient package R 355.44 R 301.04 R 233.29 R 293.79 R 183.07 R 214.55 R 232.10

PMB package (excl. CDL) Private Sector

R 2,432.41 R 2,010.90 R 1,489.49 R 1,956.01 R 1,100.08 R 1,343.43 R 1,479.04

PMB package (excl. CDL) Public Sector

R 1,716.72 R 1,419.39 R 1,053.40 R 1,381.31 R 778.53 R 949.91 R 1,045.41


Non-healthcare Expenditure

Non-healthcare Expenditure as a Proportion of …

HighMedium-

olderMedium-Younger

High and Medium

LowTotal Study

Weighted Total

Total Inpatient package 3.9% 4.0% 5.0% 4.3% 5.4% 4.9% 4.7%

Total Outpatient package 2.3% 2.3% 2.7% 2.4% 2.7% 2.6% 2.5%

Total PMB package (excluding CDL)

3.7% 3.8% 4.6% 4.0% 5.0% 4.6% 4.4%

Well below Registrar’s benchmark of 10% of total expenditure


854

1,4141,296

1,762

1,449

2,034

1,181

1,741

R 0

R 500

R 1,000

R 1,500

R 2,000

R 2,500

Hospital only Hospital plus related

Pe

r B

en

efi

cia

ry p

er

An

nu

mPMB package (excluding CDL)Schemes in PMB StudyOpen non-study schemesRestricted non-study schemes

PMB Package Relative to Industry Hospital Expenditure



PMB Package Relative to Benefits and Contributions


1,414 1,479

4,285

5,013

4,668

5,760

4,772

5,613

R 0

R 1,000

R 2,000

R 3,000

R 4,000

R 5,000

R 6,000

Total Benefits Contributions

Pe

r B

en

efi

cia

ry p

er

An

nu

m

PMB package (excluding CDL)Schemes in PMB StudyOpen non-study schemesRestricted non-study schemes



Conclusions


Preliminary Conclusions on Affordability

The PMB package (excluding CDL) appears to be affordable compared to hospital benefits and the proxy for hospital and related benefits.

The package also appears to be well covered when compared to the level of total benefits and contributions at an industry level.


Improvements to PMB Definition

All stakeholders need an unambiguous definition of the PMB package.

The Council for Medical Schemes is requested to reconsider the definition of PMBs in the Regulations and to include clear diagnosis and procedure codes in an amendment as soon as possible.

Tighter definition of PMBs would ensure more focussed attention on accurate coding from providers and administrators.

Attention should be given to the nature of the chapters and to bringing them in line with clinical practice or a particular coding standard.


Public Sector vs. Private Sector Approaches to Treatment

As yet, no coherent approach to defining the basic essential minimum services between the public and private sectors.

Far more agreement and convergence are required in terms of public vs. private sector approaches to common conditions. Admission to hospital is the norm in the private sector but not in the public sector where some events are regarded as being non-acute in terms of PMBs.

Agreement is needed on the roles of new generation prostheses, devices, immune modulators, gene therapy, procedures and drugs.


Comprehensive Crosswalk

Provides a powerful tool for rapid application of PMB status to hospital admissions based on ICD-10 coding

Strongly recommend that this should be made freely available to other medical schemes and administrators, in order to improve their understanding and management of PMBs.

Recommend utilising this tool, or one developed from this work, to define and manage the PMB package in future.


Further Research

It is now possible (within a few minutes), to extract data for a specific ICD-coded diagnosis with its accompanying costs, related length of stay, age data and cluster data. These can also be expanded to include ethnicity, scheme options and provider information. This information can be grouped into clusters, age bands, and disease patterns depending on the requirements of the user.

This opens the possibility of doing much valuable and detailed analysis of specific problem areas in the PMB definitions in order to refine the PMB package.

Several projects planned for 2003 at UCT using this data.


A Research Unit of the University of Cape Town

(CARE)

Centre for Actuarial Research

A Research Report Prepared Under Contract for the Council for Medical Schemes

the costing of prescribed minimum benefits

Documents

industry data

disease chapteraverage

clusteraverage cost

low utilisation

different age

disease profiles

statusaverage cost

diagnosis element