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The Impact of PMBs on Affordability

The Impact of PMBs on Affordability. January 2003. Approach to Affordability. Compare price of components of PMB package to reported benefits and contributions of medical schemes. Industry level Scheme level Option level

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The Impact of PMBs on Affordability

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  1. The Impact of PMBs on Affordability January 2003

  2. Approach to Affordability • Compareprice of components of PMB package to reported benefits and contributions of medical schemes. • Industry level • Scheme level • Option level • Compare price of PMB package to published contribution tables for open scheme options. Focus on low-cost options. • Compare price of PMB package to income levels of existing members and potential members of medical schemes. Impact of employer and per capita subsidies.

  3. Price of the PMB Package

  4. Cluster Analysis • Different clusters experience different benefit utilisation, costs and disease profiles. Provider behaviour differs by cluster, even within the same hospital facility. • Four 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.

  5. Cluster Analysis

  6. Cluster Analysis • Study contains more Low cluster beneficiaries than the industry. • For industry comparisons, useWeighted industry price. • This uses 50% of the costs of the Low cluster and 100% of the other clusters. • Low clusteris more relevant to the emerging low-cost option environment. • High cluster is used to give an upper limit to the PMB price.Would only be applicable to a few high utilisation options.

  7. Price of Inpatient and Outpatient Package

  8. Centre for Actuarial Research Price of CDL Package

  9. Price of Complete PMB Package

  10. Private Sector PMB Packageper beneficiary per annum

  11. Non-Healthcare Expenditure on PMB Package Well below Registrar’s benchmark of 10% of total expenditure

  12. Public Sector Complete PMB Package

  13. Public Sector PMB Packageper beneficiary per annum

  14. 12,000 10,000 Total CDL package 8,000 Total Outpatient package Total Inpatient package 6,000 Price pbpa Complete PMB package Public sector 4,000 2,000 0 0 1-4 5-9 85+ 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80-84 Missing All ages Price of PMB Package by Age

  15. Price of PMB Package by Age • Note that for all age bands over 40, the PMB price by age exceeds the community-rated PMB price. • This explains the incentive open schemes have to attract and retain younger and healthier members.

  16. Complete PMB Packagefor family of four per month

  17. Affordability Relative to Benefits

  18. Beneficiaries 2001 Source : Registrar’s Returns 2001

  19. Centre for Actuarial Research Centre for Actuarial Research Hospital Only Source : Registrar’s Returns 2001

  20. Centre for Actuarial Research Centre for Actuarial Research Hospital and Related Source : Registrar’s Returns 2001

  21. Centre for Actuarial Research Centre for Actuarial Research Medicine Source : Registrar’s Returns 2001

  22. Centre for Actuarial Research Centre for Actuarial Research Total Benefits Source : Registrar’s Returns 2001

  23. Affordability Relative to Contributions

  24. Centre for Actuarial Research Centre for Actuarial Research Total Contributions Source : Registrar’s Returns 2001

  25. Centre for Actuarial Research Non-Healthcare Expenditure 2001 Source : Registrar’s Returns 2001

  26. Centre for Actuarial Research Real Non-Healthcare Expenditure Source : Registrar’s Returns

  27. Other Non-Healthcare R 1,000 921 Administration and Managed Care R 900 169 786 R 800 110 R 700 R 600 501 Per Beneficiary per Annum 5 R 500 R 400 752 676 R 300 496 171 R 200 - 90 113 - R 100 - R 0 PMB High Cluster Cluster PMB Low Schemes Restricted PMB Industry Weighted Schemes All Registered Open Schemes Centre for Actuarial Research Non-Healthcare Expenditure Source : Registrar’s Returns 2001

  28. R 6,000 5,625 Private Sector 5,520 5,475 Public Sector R 5,000 3,798 R 4,000 Per Beneficiary per Annum R 3,000 2,425 2,157 R 2,000 1,551 1,400 1,016 R 1,000 R 0 PMB High Cluster Cluster PMB Low Schemes Restricted PMB Industry Weighted Schemes All Registered Open Schemes Centre for Actuarial Research Centre for Actuarial Research Public Sector Source : Registrar’s Returns 2001

  29. Bargaining Council Schemes

  30. Bargaining Council Schemes Source : Registrar’s Returns 2001

  31. Bargaining Council Schemes Source : Registrar’s Returns 2001

  32. Exempt Scheme Benefits 2000 Source : Registrar’s Returns 2000

  33. Exempt Scheme Benefits 2000 Source : Registrar’s Returns 2000

  34. Impact on Low-Cost Options

  35. Centre for Actuarial Research Options Available to Benchmark Family Source : CARE Monograph

  36. 843 Fedsure Larona PrimeCure 638 Ingwe PrimeCure 728 Ingwe CareCross 966 Medihelp Nucleus 730 Medimed PrimeCure 824 Medimed ECIPA, UDIPA 657 Metropolitan Primary Plus 576 MSP/Sizwe PrimeCure 780 MSP/Sizwe Ecipamed 904 MSP/Sizwe MediCross 732 NMP PrimeCure 280 Protector Health Primary 480 Protector Health Primary Plus 841 Provia SilverCure 810 Spectramed Spectra Alliance 672 Topmed Bophelo Network 635 Vulamed Standard 321 Low cluster PMB Public Sector 489 Low cluster PMB Private Sector 0 100 200 300 400 500 600 700 800 900 1,000 Contribution per family per month Centre for Actuarial Research Primary Care Network Options Source : CARE Monograph

  37. Recommendations for Low-Cost Option Design • Need contribution less than R500 for family of four earning R4 000 per month. • Hospitalisation offered in differential amenities in a public hospital. • Specialist services in a public hospital. • Chronic medicine offered either in the public hospital or with a strict formulary by the primary care providers. • Primary care offered in private sector capitated networks. Source : CARE Monograph

  38. Affordability Relative to Income

  39. Income Levels Open Schemes CMS Survey 2001 Source : Council for Medical Schemes

  40. Employment Medical Scheme Beneficiaries Source : OHS 1999

  41. Centre for Actuarial Research Centre for Actuarial Research Employment Profile Medical Scheme Beneficiaries Source : OHS 1999

  42. 800,000 700,000 600,000 500,000 Retired (Pensioner) Permanently unable to work Not working 400,000 Not working (but looking for work) Going to school/college/university Full time homemaker/housewife N/A 300,000 200,000 100,000 - 0 1-4 5-9 85+ 10-14 15-19 20-24 25-29 30-34 35-39 40-45 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80-84 (blank) Centre for Actuarial Research Workers Profile Medical Scheme Beneficiaries Source : OHS 1999

  43. Income Levels Medical Scheme Beneficiaries Source : OHS 1999

  44. Centre for Actuarial Research Centre for Actuarial Research Income Profile Medical Scheme Beneficiaries Source : OHS 1999

  45. Centre for Actuarial Research Centre for Actuarial Research Income Proportion by AgeMedical Scheme Beneficiaries Source : OHS 1999

  46. Centre for Actuarial Research Centre for Actuarial Research Income Profile All Citizens Source : OHS 1999

  47. Part of a medical scheme Potential SHI Public Sector Centre for Actuarial Research Possible SHI Income Earners Source : OHS 1999

  48. Affordability Issues for Pensioners

  49. Centre for Actuarial Research Centre for Actuarial Research Vulnerability of Pensioners Source : OHS 1999

  50. Centre for Actuarial Research Centre for Actuarial Research Vulnerability of Pensioners Not in Medical Schemes Source : OHS 1999

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