Integration of Service Delivery to SASOG/GMG Members

March 2007

AGENDA

• Welcome & Introduction - Prof Franco Guidozzi

• GSK Overview - Sue King

• Proposed Integration of SASOG & GMG Services - Dr Chris Archer

• Healthcare Analysis - Casper Venter

• Malpractice Insurance- Paul Lewis

• Proposal – The way forward

OBJECTIVES

• New legislative and economic threats facing Gynaecology & Obstetrics / Private Healthcare

• Unify Gynaecology & Obstetrics in South Africa under auspices of SASOG

• Improved Service Delivery contracted by SASOG to - GMG

- HealthMan

- E2 Solutions

- Other

1.Historical Background

Analysis

Board of Directors

Membership

CEOSecretary General

Coding

Legal & Ethics

Private Practice

PPC

Oncology

SPPC GPPPC

Chair

3 Consulting

3 Surgeons

1 Pathology

Anaesthetics

SAMA STRUCTURE

Historical Background Analysis

SASOG

• Representative Association

• Approx. 500 Members

• Focus on - Academic

- Ethics

- Medico Legal

Historical Background Analysis

GMG

• Before SHCJV

• Formation of GMG

• GMG representation on SASOG

• SASOG representation on GMG

• SAMA representation

Gynaecology Management Group

• 10 years old

• Structured as a public company

• Functions as a Managed Service Organization (MSO)

• Membership of 250

• Funding from Member contributions and pharmaceutical sponsorships

Why the need for change?

• Enormous challenges & Threats– Appropriate response from Private Practice– Cannot leave it to SAMA

• Unity in the Gynaecology Community• GMG will continue – no debt• Better representation for O & G• Unfair burden on GMG members• Limited funding limits effectiveness• Need to employ professional consultants

2. Threats Facing Gynaecology &

Obstetrics in Private Practice

Reforms originating from Government – objectives

Enabling legislation nearly complete

Ensuring health care services for all

Ensuring equity in the delivery of health care services

Move to an integrated National Health System –

Social Health Insurance for the future

Public Private Partnership initiatives are essential

Government Initiatives - Legislative

Private PracticeKey Legislative and other Issues Facing Private

Practice

• Medical Schemes Act of 1998• National Health Reference Price List 2007• Risk Equalisation Fund 2007• Circular 8 of 2006 to be implemented 2008• Management of PMBs, CDLs, DSPs• GEMS, LIMS, REF• Basic Benefit Package• Amendments to Health Professions Act• Increased Malpractice insurance costs• Increased Litigation• Hospitals taking control• Lack of new students specialising• NHRPL Processes• Premier Plan• DSP arrangement

4.Proposed Integration of

SASOG & GMG Services

Where should a PPU be situated?

• Inside SASOG?

• Outside SASOG?

SASOG COUNCIL

Executive CommitteePresident, Secretary, Treasurer,

GMG Rep, Academic Rep, Medicolegal

SecretariatSecretary, Academic, GMG Academic/Ethics

Finance CommitteeTreasurer, Academic, GMG, HealthMan

Private Practice (GMG)

Sub- Groups & DoH

SAMA & Medical Aids & DoH

Medico Legal

5. Funding• Member contributions

• Pharmaceutical interactions– Grants

– Sponsorships

PROPOSED FEE STRUCTURE FOR MEMBERS

1800 – Full-time Private Practice

1200 – 1st & 2nd year Full-time Private Practice

1200 – Academic + RWOPS

450 – Full-time Academic

100 – Registrars

The Cost/benefit Relationship

Costs:

– GMG R2400

– SASOG R360

GMG Value add:

– R15,638 per month

– 651% return on investment

6. Healthcare AnalysisGynaecology in Perspective

Government initiatives – LegislativeFunding Issues – NHRPL 2007

ECONOMICS OF HEALTHCARE

2000 – R393

0

100

200

300

400

500

600

700

Mil

lio

n

2000 2001 2002 2003 2004 2005

Gynaecology Payout

2001 – R479 2002 – R533 2003 – R568

2004 – R614 Average – 15.52% p.a.2005 – R698

ECONOMICS OF HEALTHCARE

1997 – R20 254 968 1998 – R23 669 446 1999 – R28 747 153 2000 – R31 159 571

1997 – 2005 = 168% Increase (20.94% p.a)

0

10

20

30

40

50

60

mil

lio

n

1997 1998 1999 2000 2001 2002 2003 2004 2005

Medical Scheme Contributions

2001 – R36 977 784 2002 – R43 238 412 2003 – R48 635 737 2004 – R52 210 917

2005 – R54 192 476

0

1000

2000

3000

4000

5000

6000

7000

8000

2001 2002 2003 2004 2005

Admin Expenses

MedicalSpecialists

Clinical SupportSpecialists

Bil

lion

Economics of Health Care 2001 - 2005

Admin Expenses 14.36%

Medical Specialists 12.74%

Clinical Support 13.96%

Medical Specialists

0

100

200

300

400

500

600

700

2005 2004 2003 2002

Gynaecologists

OrthopaedicsSurgeonsPhysicians

Surgeons

Ophthalmologists

Paediatricians

Cardiologists

Otorhinolaryngologists

R/

Mil

lio

n

Year

Economics of HealthcareBENEFIT PAYOUT (R’000)

R 0

R 2,000

R 4,000

R 6,000

R 8,000

R 10,000

R 12,000R 14,000

R 16,000

R 18,000

Hospital Pharmaceutical

2000

2001

2002

2003

2004

2005

Hospital Increase - 95.73% - Average 19.15%

Pharmaceutical Increase - 15.53% - Average 3.12%

Pharmaceutical 2004 – 2005 - (-9.72%)

MEDICAL SCHEME Financial Review – Premium Income 2005

Discovery Health

Bonitas

Medihelp

Polmed

Medshield

Discovery HealthR14,760 millionBonitas

R3,748 million

Medihelp R2,658 million

PolmedR2,697 million

MedshieldR1,272million

Total: R25,135 million - 46.4%

ECONOMICS OF HEALTHCARE

IMPACT OF CIRCULAR 8 OF 2006

Non-PMB hospital & other common benefits

PMB Benefits

Option 1Option 2

Option 3Supplementary

Benefits

Common Benefits

7.Gynaecology

NHRPL SUBMISSIONS TO CMS2007

RAND CONVERSION FACTOR (O&G)

• Labour RCF: R9.20 p.m.(Based on R729 405 p.a.)

• Overhead RCF: R8.49 p.m.(Incl. equipment cost)

• ROI Rate R1.07 p.m.• Total RCF: R18.74• Total RCF (Vat Incl.) R21.38 x 30 minutes• 30 Minute Consult R641.60

NHRPL 2007

0123456789

1011121314151617181920212223

Pra

ctic

es

Overheads

100-150151-200201-250251-300301-350351-400401-450451-500501-550551-600601<

Gynaecology

Overhead Costs

Staff Costs R309,873

Premises R51,151

Administration R129,223

Financial/Insurance R104,812

Other R52,417

Equipment/Fittings R84,077

Total: R731,553

Gynaecology

SURGICAL Rand Conversion Factor (Incl. VAT)

RENT 19.54GYNAECOLOGY 21.40OPHTHALMOLOGY 24.26UROLOGY 19.11NEUROSURGERY 20.28ORTHOPAEDICS 22.38(AVERAGE) 21.16

NON-SURGICALPHYSICIANS 19.06PAEDIATRICS 19.49PSYCHIATRY 17.00(AVERAGE) 18.52

SPECIALIST GROUPS RAND CONVERSION FACTOR

TARIFFS – THE WAY FORWARD

• Awaiting changes to the National Health Act – submissions by 28 February 2007

• Chris Archer to re-do coding structure- logical/anatomical sequence- assign time- assign post-op time- assign complexity

• Obtain hospital data• Cost studies to be re-done?• Review equipment utilisation

8.Service Offering to

Members

Service Offering to Members

• Academic

• Ethical

• CPD

• Medico Legal

• Healthcare Interactions

• Communication

• Commercial

Service Offering to MembersHealthCare Interactions

• HealthMan/GMG interacts and facilitates between various stakeholders in the health care market: - Private practitioners- Regional & National IPAs- SAMA & various Statutory Bodies- Medical Schemes- Administrators- Managed Care Organisations

• Summary of Key offerings- Coding & relative value units- Practice costs & tariffs- PMB disputes & resolution- ICD10 coding structures

Service Offering to MembersCommercial Offerings

HealthMan has established relations with a number of alliance partners that make their services available at preferential tariffs:

• Alexander Forbes (Malpractice)• Citadel (Wealth Preservation)• Prosper Financial Services (Investments, Life & Risk Insurance &

Employee Benefits)• Medigro (Short Term Insurance)• Sanlam (Bond Finance)• Wesbank (Motor Vehicle Finance)• VICIFIN (Bond Originator & Commercial Finance)• Absa (Credit card terminals)• NuDebt (Debt collection via ACB’s)• Payroll service• HealthFocus Practice Management system

Service Offering

Communications• Website

– Design / build, maintain, host and secure – see next slide

• Bulk E-mail – with auto responses• Bulk SMS service• Outcome based registers• Prescription pad facilitation• Internet Access

– Dial up / ADSL

• Electronic Journals

Proposal – The way forward

QUESTIONS