Alliance-Midmed Medical Scheme

2019 Budgets and Planning

Rumours and National Health

• NHI - Government provide / pay for healthcare provider and payer for all citizens – and some

• Medical schemes – supplementary benefits

• All medical schemes will be affected

• RUMOUR - AM will close down - NHI consolidation plan?

• NHI timeframe, cost and stakeholders

• Many stakeholder groups – members, business, trade unions, civil society, healthcare professionals, employers, etc.

• Ownership questions asked by members

• Alliance-Midmed – Private Health Administrators is a private company now 60% held by Medscheme and 40% by private individuals

• Sizwe - Sechaba – NUMSA owns 60% of Sechaba and a group of doctors owns 40%

2019 Budget assumptionsand decisions

Contribution increase 10.7%

2019 Scheme contributions compared

2 0 1 9 C O N T R I B U T I O N S % I N C R E A S E N E W R AT E S

Most expensive Medical Scheme Option 10.70% 20 940

Comparable benefit option 9.20% 15 578

Comparable benefit option 10.70% 15 379

Comparable benefit option 9.20% 12 585

Option with ~0% less benefits at same rate 8.50% 7 569

____ more affordable care – significantly less benefits 6.10% 8 426

____ fuller benefit option – comparable benefits 6.10% 12 364

Alliance - Midmed (highest income bracket) 10.70% 7 729

Family of four in highest income bracket

Alliance-Midmed 2019 increases -The Rand Value impact

New monthly premium Additional monthly contribution (before subsidy)

Monthly income

Member Adult Child *2 Total Member Adult Child *2 Total

R5 000 2 119 1 927 1258 5 304 204 178 74 456

R10 000 2 844 2 589 1702 7 135 275 250 164 689

R20 000 3 081 2 804 1844 7 729 298 271 178 747

Additional monthly premium (after subsidy)

Member Adult Child *2 Total

82 71 30 182110 100 66 276119 108 71 299

Scheme positioning

Description BenefitMonthly

ContrExample

66-Star,

hotel-likeChoice and exclusivity

R20,954Most expensive and fuller benefit option

6

5 5Alliance-Midmed

4 4

3Alliance-Midmed

3

2 2

1Hospital

Plan

Limited choice and

benefitR3,228

Cheapest hospital plan

1

Private room Designer drugsMeals and

alcoholPrivate nursing

Visitors at any time

No limitsEntertainment

suite

Reasonable Access

(availability, turnaround time, efficiency)

Quality Healthcare

(Accurate diagnosis and treatment, competent and efficient care, reduced risk and downside of intervention)

Affordable price

(Cost of optimal diagnosis, treatment and care, administration, turnaround, wastage prevention, skills, etc.)

INCREASES – 1999 to 2017

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Industry AM CPI M-CPI

0%

32 – 70%

Scheme operational statistics – Dec 2017

Alliance-Midmed Industry

Number of members at the end of the year 1 855 Number of beneficiaries at the end of the year 4 413 Average age of beneficiaries for the year 31.24 Pensioner ratio (beneficiaries > 65 years) 6.03%

Healthcare expense as a percentage of gross contributions 90.52%

Aver non-healthcare expenditure per beneficiary per month R 113

Non-health expenses as a % of gross contributions 6.33% 11.89%

Ave accumulated funds per member at year-end R 26 429Net member movement trend: Last 3-5 years 26Contribution increases (%): Last 3-5 years 7.17%Health care expenditure - 2017 R 85.604mCurrent solvency 34.60%Solvency changes over last 3-5 years (5.74%)% of contribution subsidised by employer 60%

Replaced Deloitte with BDO as Scheme auditor from Oct 18

The industry and why things go

wrong and right?

• Basic processes, procedures (and) checklists

• Skills and exposure

• Level of care

• Coordination

• Transparency

• Ownership

• Profit

• Referral systems

• Permission to fail

• Preferential treatment

• Rule and regulation

• Patient involvement and wishes

Most healthcare professionals want to excel…

Level of Care

Why does it matter?

Surgeons book patients overnight into high care post-surgery because they are concerned about the level of care in general wards

=

R5 507 per day

Level of care Cost Emergency consult at hospital R970

- Plus wound care R370

Medical and Surgical Wards R3,092

Pediatric Ward R3,677

Maternity – Caesarean 1st Day R19,950

- Cesearian – subsequent days R4,244

High Care R8,607

Intensive Care R14,050

www.alliancemidmed.co.za | Tel 087-740-2815 | Call Centre 0860-002-101 | Emergency Number 0860-255-426

Generic medicines• Generic vs sub-standard manufacturing

• Bio-equivalent vs biosimilar

• Counterfeit (fake) meds • Developed world - 8%, developing world 13%, Africa – 19%, and South Africa 8.9%• World Health Organisation (WHO)

• Surveillance and AlertSystem for Counterfeit Medicines• Medicines quality assurance task force

• Popular counterfeit targets• Malaria, diabetes, hypertension erectile dysfunction, cancer medicines, HIV/AIDS• Antibiotics and corticosteroids

• AM is affected BUT less • Mediscor monitor and check and we deal with known pharmacies….

• In high-risk/ precision dosages – extra cautious - Neurology and children under 6 years

• Buy only from known and legitimate pharmacies and avoid street vendors and internet

Always consult a medical practitioner when you change your treatment

www.alliancemidmed.co.za• >benefits• >chronic medicines

which are covered• http://www.mediscor.

net/Midmed_Formulary_Lookup.html

Always consult a medical practitioner when you change your treatment

Cost per

tablet

Cost for 30-day

supply

0.57 17.11

2.19 65.81

Aspirin 300mg

Count = 17

informed and participative patient decisions, together with your healthcare professional

Saving

__Some insulin pen - 3ml, 100

unit ml___818.07 341.89

476.18__Its

generic_____

Original

Generic

Saving___Some Antibiotic_______ 133.27 24.58 108.69 __Its generic_____

___Some Antibiotic_______ 161.38 50.53 110.85 __Its generic_____

___Some antibiotic - pediatric_ 95.81 32.74 63.07 __Its generic_____

____Some other anti-biotic__ 132.46 -2.83 135.29 __Its generic_____

Original Generic

Adherence Ratio

<41% 1.7%

50% 6.8%

75% 16.8%

80% 44.9%

100% 29.7%

Total 2 196

Hypertension

Cholesterol

Thyroid disease

Asthma

Depression

Non-insulin dependent

diabetes

Ischaemic heart disease

Epilepsy

Bipolar mood disorder

Menopause

Chronic medicines adherence

How often members collect

their prescriptions from the

pharmacy for these conditions

Indicative costs

CostPer one event

for all lives

No of lives 4 413

Cost per GP Consult 485 2 140 305

Cost per GP consult and meds 851 3 753 344

Per visit / test (ZAR)

Doctor visit R485

Medicine (average acute script) R366

Specialist visit R970 - R3 400

Black and white x-ray – arm R627

Colonoscopy R1 923

Gastroscopy R1 020

Sinus scan R860

One day hospital visit R10 436

Three day hospital visit R15 257

Blood test – sugar R65

Blood test – lipogram (cholesterol) R387

Blood test – allergies R339

A day in intensive care R14 818

An hour in theatre R11 838

Lifestyle and cost impact – the power of team work

Members Lives

1 844 4 415

R2,4m R108.50/ month R45.33/ month

R2,7m R122.00/ month R51 .00 /month

2.8% to 3.1% of contributions

It is possible to reduce hospital expenses (+-30% of the total) and medicine expenditure @5% of the total by R.2.7m and that equates to the savings indicated above.

Our health management risk strategy

Age Chronic condition/s

Family history and

illness profile

Prevention, treatment

compliance

Current health profile

Lifestyle indicators

Cost profile

R7m or R321,28 per member per month

Know Your Numbers

Body mass index (height and weight)

Blood pressure

Blood glucose

Cholesterol

Health risk questionnaire

Solutions

www.alliancemidmed.co.za

Tel 087-740-2815

Call Centre 0860-002-101

Emergency 0860-255-426

Challenges

FraudAbuseOver-servicingIncompetenceSelf-harmPreventable use

• The system

• Fraud

• Abuse

• Waste

• Skills and training

• Under-staffed

• Over-pricing and over-charging

• Charging for unnecessary services

• Calling patients back unnecessarily

• Hospital acquired infections

• Duplicate services

• Non-essential use of expensive drugs/ treatment

• Inaccurate diagnosis

• Ineffective prescription

• Lifestyle (diet, exercise, smoking, alcohol and drugs)

• Non-compliance to treatment plans

• Dependence

• “Locking into the system”

• Doctor-hopping

• Abuse

• Cash for claims

• Beneficiary not registered (substitute)

• Incomplete information

The system The “players”

Connect with us…

Emergency 0860-255-426After hours nursing staff and doctor on call

0860-255-426

Middelburg office (08H00 - 16H00) 087 740 2815 service@alliancemidmed.co.za

The cell phone app

Address SEVEN@DOLERITE or (7 Dolerite)

Mediscor Chroniline 0860-119-553 preauth@mediscor.co.za

Denis Call Centre 0860-000-702 allianceenq@denis.co.za

Fraud Hotline 0860-040-040 mail@beheard.co.za

www.alliancemidmed.co.za

Alliance-Midmed

app

www.alliancemidmed.co.za | Tel 087-740-2815 | Call Centre 0860-002-101 | Emergency Number 0860-255-426

Collect emergency stickers at Ronelle

and member card in cubby hole

Questions so far…• GP consults

• Optical benefits

• Out-of-area

• Preferential treatment

• Alliance-Midmed versus Midmed Hospital

• The vulnerable groups

• Gym membership

• Multivitamins

• Monthly updates

• J Hartzenberg – 0828013323/ jhhartz@outlook.com

QUESTIONS?

Brand names and generics

• https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3150029/

• http://scienceblogs.com/deanscorner/2011/12/20/generic-lipitor-the-same-and-n/

• https://www.cadth.ca/generic-drugs/similarities-and-differences-between-brand-name-and-generic-drugs

• https://www.cadth.ca/generic-drugs/similarities-and-differences-between-brand-name-and-generic-drugs

• https://www.rxlist.com/script/main/hp.asp

• http://www.who.int/medicines/areas/policy/monitoring/empmedmon/en/

Some things that we do differently and well

• Claims processing speed

• Query answering speed

• After-the-pay-run audit

• Non-healthcare cost as % of contributions

• Medical care as % of pay.

• Cost and benefit

www.alliancemidmed.co.za | Tel 087-740-2815 | Call Centre 0860-002-101 | Emergency Number 0860-255-426

Life stages and cost

Medical expenses rise as we grow older – if the expense for all or most groups rise, the scheme becomes financially stressed

2 832

1 854

5 212

10 700

3 824

-

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

18 000

Up to 6 7 - 20 21 25 30 35 40 45 50 55 60 65 >65

In this example the average cost changed from R4 960 to R7 787 and reserves and member

contributions will be affected

Pharma context

• World pharma market – USD 1.1Trillion

• USA constitutes ~70 of that amount.

• RSA pharma market - R1.2 Trillion (USD 1/ZAR 14.55) • USD R82 Billion.