with beneficiaries interest? Yes, but. HMI seminar: Funders market - - PowerPoint PPT Presentation

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Will the proposed regulatory interventions realign funders interest with beneficiaries interest?

HMI seminar: Funders market concentration and countervailing power 10 April 2019

Yes, but….

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Eric Topol https://twitter.com/EricTopol/status/109971977061 2453377?s=19 https://ourworldindata.org/

Trends in health expenditure and life expectancy for selected countries

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Life expectancy by health expenditure (For countries spending <$2,000 PPP)

Based on data downloaded from www. http://data.worldbank.org/

$1 121 ; 57

y = 5,0383ln(x) + 38,453 R² = 0,5227

40 45 50 55 60 65 70 75 80 85 $- $500 $1 000 $1 500 $2 000

Life expectancy at birth, total (years)

Health expenditure per capita, PPP (constant 2011 international $) South Africa

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Total health expenditure is higher than expected for SA’s GDP per capita

y = 0,0136ln(x) - 0,0562 R² = 0,3307

0,0% 2,0% 4,0% 6,0% 8,0% 10,0% 12,0% 14,0% 16,0% 18,0% $- $20 000 $40 000 $60 000 $80 000 $100 000 $120 000

Health expenditure, total (% of GDP)

GDP per capita (current US$) South Africa USA United Kingdom

Based on data downloaded from www. http://data.worldbank.org/

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Kya Sands vs Bloubosrand, Johnny Miller https://www.businessinsider.com/drone-photos-show-inequality-in-south-africa-2016-6

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https://www.businesslive.co.za/bd/economy/2019-02-28-how-sas-fiscal-position-may-be-worse-than- treasury-says/

7 Debt service costs is the fastest growing expenditure item… (2019/20 — 2021/22) 4,6 5,8 7,0 7,0 7,3 7,6 9,3 10,7 2 4 6 8 10 12 Peace and security General public services Economic development Health Social development Learning and culture Community development Debt-service costs Per cent average nominal growth in spending

http://www.treasury.gov.za/documents/national%20budget/2019/

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Employment and medical scheme membership

Trading economics, https://tradingeconomics.com/south-africa/employed-persons CMS Annual Report 2016 17

0,5 1 1,5 2 2,5

MEDICAL SCHEME MEMBERS

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Progressivity of health spending Concentration curves and Lorenz curve for market income

Health

Inchauste, Gabriela, et al., et al. The Distributional Impact of Fiscal Policy in South Africa. s.l. : The World Bank. Poverty Global Practice Group & Macroeconomics and Fiscal Management Global Practice Group, February 2015.

10 Change in Gini: disposable vs market income (in Gini points)

Inchauste, Gabriela, et al., et al. The Distributional Impact of Fiscal Policy in South Africa. s.l. : The World Bank. Poverty Global Practice Group & Macroeconomics and Fiscal Management Global Practice Group, February 2015.

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Source for population, poverty and taxpayer numbers: SARS Tax Statistics 2018, StatsSA, NHI White Paper presentation

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Objectives of mandatory minimum benefit package(s)

1. Facilitating catastrophic insurance cover 2. Ensuring risk based cross subsidies 3. Improving allocative efficiency 4. Reducing burden of disease 5. Improving equity 6. Controlling moral hazard and cost escalation 7. Fostering competition 8. Facilitating transparency & participatory democracy

Neil Söderlund, Possible objectives and resulting entitlements of essential health care packages, Health Policy 45 (1998) 195–208

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CMS, IHRM Breakfast meeting. 21 May 2010

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Base benefit PMB PMB

Single base benefit

Risk level Number of beneficiaries per option Cross subsidies will correctly be from low risk to high risk, but incorrectly from low income to high income

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Risk adjusted benefit

Single base benefit and risk adjustment address horisontal equity

Base benefit Base benefit

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Total health expenditure and monthly expenditure per beneficiary by risk pool (2017)

R 178 R 334 R 746 R 1 491 Tax credit (for 9 million) Health benefit public service users (48 million) PMB expenditure (for 9 million) Medical scheme benefit (9 million) R billion 192 R billion 161 Total public health expenditure, 2017/18: Total benefits paid (including from savings accounts), 2017

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CMS presentations to health portfolio committee, 15 September 2010

Risk pooling challenge to equity in provincial expenditure? (2015/16 budget)

R 2 402 R 3 892 26% 46% 0% 10% 20% 30% 40% 50% 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 Health expenditure per capita Health as % of total

National Treasury. Documents - Medium Term Budget Policy Statements - 2015

• Tables in Excel. National Treasury. [Online] 2015. [Cited: 4 May 2016.]

http://www.treasury.gov.za/documents/mtbps/2015/tables.aspx. Statistics South Africa. Mid-year population estimates 2015. Pretoria : Statistics South Africa, 23 July 2015. Statistical release P0302.

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Statistics South Africa. Mid-year population estimates 2015. Pretoria : Statistics South Africa, 23 July 2015. Statistical release P0302. Health Systems Trust: http://indicators.hst.org.za/healthstats/77/data/eth

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Medical Schemes

(Differential cost

• ptions)

Risk adjusted contribution subsidy Community-rated Contribution Employer Member

Flow of funds to support horisontal and vertical equity (Contribution subsidy is central)

Prospective risk assessment

Provinces Provinces Provinces Provinces Provinces Provinces

Provinces Converted tax credit Risk and Income Adjustment Vehicle Central Equity Fund General Taxes Fiscus

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Medical Schemes

(Differential cost

• ptions)

Risk adjusted contribution subsidy Community-rated Contribution Employer Member General Taxes Fiscus

Flow of funds to support horisontal and vertical equity (Contribution subsidy is central)

Prospective risk assessment

Provinces Provinces Provinces Provinces Provinces Provinces

Provinces Converted tax credit Risk and Income Adjustment Vehicle Central Equity Fund

Implement a very basic mechanism rapidly – reform the tax credit Very simple age and gender adjusted contribution subsidy paid directly to medical schemes

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Application of benefit packages

Primary and preventive care Primary and preventive care with hospitalisation for public health priorities Revised PMB package Revised delivery team PPPs for hospitalisation Risk management

• Multilateral tariff

negotiations

• Flexibility to develop new

commercial delivery entities

• Outcomes measurement
• Reimbursement systems
• Mechanism to prevent

buy-down to low cost

• ptions
• Coding systems
• Human resources,

RWOPS

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What happens with the HMI recommendations?

• Submitted to parliament
• Review health policy to accommodate the HMI

recommendations:

• Market failure
• Government failure
• Capability requirements
• Establish a consultative forum to participate in the

policy development process