ACTUARIAL SOCIETY 2009 CONVENTION LITE AND THE PENSIONS, HEALTH AND LIFE SEMINARS PAPERS AND PRESENTATIONS (listed alphabetically by first author, please see the programme for scheduling details) The lights are on but no one is at home above 300%). Paper by JP Andrew This presentation sets out the current methodology as set out by the DoH and This paper identifjes a widening gap between discusses some of the major issues. The the way in which actuarial material is being sensitivity of the results to various inputs will be presented to boards of trustees and the capacity presented, including issues related to the critically of those boards to assimilate the information important allocation of time units which have and take informed decisions. There is a need for not been adequately examined and measured in interpretation and distillation. Either the actuarial the practice cost surveys. profession must satisfy this need, or the actuary will be relegated to the back-offjce. The paper Investigating private hospital capacity in sets out some guidelines which may help to South Africa bring the actuary back into the decision-making process. Presentation by barry childs This presentation offers an analysis of the Practice cost study submissions for capacity of private hospitals in South Africa National Health Reference Price List with regard to the possible next tier of medical (NHRPL): methodology and issues scheme membership. In conducting this analysis, data was obtained from the private hospital Presentation by Alex brownlee sector and analysed for spare capacity taking into The National Health Reference Price List account seasonal and geographical variations in (NHRPL) process aims to provide a standardised bed supply and demand. Demand for bed days tariff structure for private practice. These tariffs of the next tier of medical scheme membership are meant to represent benchmark tariffs, useful was modelled using Statistics South Africa data. as a reference in defjning benefjts and billing in a The author aims to show that combining the standardised format. two data sets allows for an evaluation of capacity The Department of Health (DoH) has been constraints in the current private provider calling for submissions to obtain information market in anticipation of the expansion of the for the determination and publication of a medical scheme population. reference price list. The basic guidelines, as set out under regulation 681 in the Government The devil is in the detail: technical matters Gazette, require a zero cost based methodology, arising from the decision on defjned benefjt whereby practice costs are measured and vs defjned contribution national pension divided by productive time in order to derive the scheme appropriate tariffs. Paper by colin dutkiewicz, Andrew After having completed practice cost studies gladwin, Stanley bisho, roger birt of their constituents, many provider groups and carolyn clark have provided submissions to the DoH. Implementation plans for the National Social The submissions imply increases in tariffs Security System (NSSS) are still underway and signifjcantly above infmation (with some increases [ 4 ]
many actuarial modelling exercises are being A brief on the updated medical component undertaken in an attempt to gauge the likely of the consumer price index (CPI) effect of the NSSS on the various stakeholders. Paper by Patrick Kelly The authors of this short technical paper have Earlier this year, Statistics South Africa (Stats developed a stochastic asset-liability model to SA) released the fjrst offjcial consumer price help understand what the trade-offs are between index (CPI) based on the much-publicised new the different systems. This process highlights basket and weights. This presentation outlines a number of decision areas that need to be the recent updates to the medical component of specifjed. The success of whichever system is the CPI. These include medicine prices, medical used in a country depends on the detail of its professional fees and hospitalisation costs. The implementation, thus these decisions need to be rationale for the changes as well as the impact of taken consciously with a good understanding of the changes is discussed in detail. The presenter their long-term impact. also explores the impact of the changes in CPI in general as well as the various regulatory links Retirement fund reform for dummies between CPI and CPIX. Paper by david gluckman This presentation explores the view that Managing agency risk in defjned the models mooted to date for the NSSS contribution retirement funds signifjcantly underestimate the cost and Paper by mickey lowther and complexity of the transition from the current to Jonathan mort the proposed dispensation. Risk management has been highlighted recently The alternative to the proposals set out to as a wider and promising fjeld for actuaries, who date is to reform the existing retirement fund may be able to add value within DC funds as system gradually over many years. This could be consultant, valuator, trustee, peer reviewer, or achieved by working to improve elements of the even expert witness. Clearly the fjeld is complex existing system in a gradual and more controlled and one solution will not fjt all. This paper aims manner aimed at reducing costs and improving to stimulate debate amongst practitioners by value to members. By refjning the existing contrasting theories of risk management with system, the cost and risks associated with current practices in member choice DC funds. transition can be contained very signifjcantly. Boards of South African retirement funds Ultimately the aim of this paper is to introduce are urged by PF 130 to put in place a risk a practical overlay to what, to date, have been management policy. Such policy should prescribe theoretical debates, and to introduce a practical a process of identifying and managing risks to roadmap to accelerate reform in the ultimate the achievement of the fund’s aims. However, best interests of the average working South it is our experience that some member choice African. DC funds are going through risk management exercises more relevant to defjned benefjt funds or entrepreneurial companies. These solutions may be irrelevant to these funds, not [ 5 ]
understandable to the Board or stakeholders, Defjned contribution and age-related risk inconsistent with the purpose of fund benefjts: the equitable myth governance, and unnecessarily expensive. Paper by neil Parkin and vivek moodley The impact of the sequential The authors explore group assurance implementation of complex healthcare arrangements where benefjts are based on age fjnancing reforms and the resultant issues that arise from these Presentation by heather mcleod structures. The paper looks at the purpose of and Pieter grobler such schemes, the processes involved and how South Africa intends to implement major they affect the various stakeholders. The authors reforms in the collection and pooling of include an explanation of the decision-making fjnancing for healthcare. This began with a processes used for these schemes and the impact process of re-regulation, with the reintroduction these have on the fjnal benefjts to members. of open enrolment, community-rating and This paper further describes how age- minimum benefjts from January 2000. A system related schemes can be structured and priced of national health insurance with income cross- and considers the complexities involved subsidies, risk-adjusted payments and mandatory when comparing between insurers. Pricing membership was envisaged in policy papers from methodologies and benefjt design variations 1994 onwards. Subsequent work has seen the may result in members of two different group design of a Risk Equalisation Fund (REF) that assurance arrangements having signifjcantly will operate between competing private health different benefjts, even though they share similar insurance funds. The REF was also envisaged as risk profjles. This then raises the question: are the vehicle to distribute the government subsidy age-related structures as equitable as they fjrst for healthcare. appear, or has the complexity simply shrouded The broad vision for the South African their true nature? healthcare system is to focus energies primarily on rebuilding the public health sector to Long-term sustainability of medical the point where it once again becomes the schemes provider of choice for the vast majority of Presentation by christoff raath South Africans. This would be achieved by reversing the effects of the GEAR policy, Medical schemes are regulated and operated and gradually, but substantially, increasing tax on a pay-as-you-go basis. Statutory solvency is funding for health services, as well as introducing calculated based on a single year’s experience a compulsory National Health Insurance at a time with no consideration of the manner contribution for all formal sector employees in which future contributions and future claims (those in paid employment). However as of are projected to develop. The medical scheme end February 2009, no details of the proposed industry is presently in a phase of consolidation National Health Insurance (NHI) system and several amalgamations are expected to have been publicly released. This paper aims occur in the near future. An actuary evaluating to analyse the various reforms that have been the impact of an amalgamation is inherently articulated to date. [ 6 ]
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