MANAGED CARE REPORTING
IS MANAGED CARE ADDING VALUE?
DR ANDREW GOOD - PROGNOSYS
Outline of presentation
• Overview of South African health systems and trends
• The importance of measuring value – How do we define
value?
• Managed care financial reporting – Is information readily
available to trustees to compare the performance of
managed care programmes?
• Results of a Prognosys research exercise to analyse the
financial performance of a managed care company using
publically available data.
State of South African healthcare
We have presented previous research that showed that South African health
systems are failing
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State sector
Policies good
Implementation poor
Resources very limited
Private sector
Lack of focus on primary care
Hospital / specialist focus
Fragmentation of care
Affordability under pressure
The WHO 2008 report: Primary Health Care (Now More Than Ever) details three
trends that undermine the delivery of health outcomes:
1.
2.
3.
Hospital centrism
Fragmentation in approach
Commercialisation in unregulated systems
Private healthcare trends
General practitioners
Hospitals
Medical specialists
Medicine
4500
4000
3500
3000
2500
2000
1500
1000
500
Year
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
0
1988
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Benefits paid pabpa in 2012 prices
5000
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Year
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
Benefit paiid pabpa in 2012 prices
State sector – voting with their feet
Provincial hospitals
250
200
150
100
50
0
How is value defined? – The Value Agenda
• Should the goal be cost management?
• Should the goal be improved access?
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• Should the goal be maximising profits?
• Should the goal be quality at any price?
The goal must be value
Managed care in South Africa
• Who is South Africa’s best HIV manager?
• Who is South Africa’s best Diabetes Mellitus
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manager?
• Who is South Africa’s best hospital risk manager?
• Who is South Africa’s best medicine risk manager?
• Who is the best provider of primary health care
networks?
How do we measure who is best?
• Productivity – meeting SLAs
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• Financial outcomes – effective cost
management
• Clinical outcomes – showing value
Some thoughts
• Productivity – general productivity: Limpopo
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school text book analogy
• Financial outcomes – low level of
information: is enough information available
• Clinical outcomes – dealt with by another
speaker
Research – CMS data
• Background to research
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• Challenge with research
• Process
• Methodology
• Results
• Next steps
Research – Background
• Challenged MCO to do put their “money
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where their mouth is”
• Project funded
• CMS data used
Research – Challenges
• Limited data
• Actuarial oversight – risk adjustment / benefit
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adjustment
• Statistical oversight – is the methodology
statically sound
• Clinical oversight – does the research make
sense
Research – Methodology
• Schemes joining and leaving
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• Clustering of schemes and options
• Adjust for risk – avoid duplication implicit within
option clustering
• Run models
• Result sign-off
Research – Statistical Methodology
• Linear Regression Analysis – Multiple specifications
• Requires all variables relating to:
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•
Attributes of MCO clients – Measurement problem
•
Hospital costs
• Measurement problem: Benefit design unmeasurable
• Solution: Cluster schemes based on proxies for
“benefit richness” and “administrative richness”
Research – Statistical Methodology
•
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Variables Used in Regression:
•
Year indicators – control for hospital cost inflation
•
Restricted scheme indicator – controls for anti-selection
•
Demographics variables – Lives
•
Clinical risk variables – Beneficiaries admitted (hospital, high care, renal
dialysis, ICU), Pregnancies
•
Cluster variables – proxy for benefit richness
•
MCO indicator – independent variable of interest
•
Cluster MCO indicator – test whether MCO has a significantly different
impact on some clusters than on others
Research – Results: context
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• Measuring the performance of managed care initiatives is key
• These comparisons are complex and open to criticism
• Progress in measuring the performance of managed care and
debating how this is best to compare performance is not an
option
• The management team at the client believe that they add value
to schemes
• We have had additional input on our model specification from
the Department of Economics at Stellenbosch University
• We hope that this report opens up the debate around managed
care
• We welcome input, commentary and criticism that promotes the
dialogue
Research – Results: summary
• Medical schemes may be grouped together (clustered) and
the cluster used as a proxy for benefit design
• 4 Clusters identified and named:
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• Cluster 1: Basic Benefits
• Cluster 0: Extended Benefits
• Cluster 3: Comprehensive Benefits
• Cluster 2: Premium Benefits
Research – Results: summary
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Research – Results: summary
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• Results reported robust to specification
• There is a statistically significant probability that being
a client of X reduces hospital costs compared to not
being a client if the client is in cluster 0 (extended
basic benefits) or cluster 3 (comprehensive benefits)
• It is estimated that the average scheme that is an X
client and offers extended basic benefits or
comprehensive benefits will save about 20% on
hospital costs per beneficiary per annum compared to
when the same scheme is not be a client of X
Research – results: graphically
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Next steps
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• We need debate
• We need more research into this
• We need agreed models
• We need benchmarked financial measures to
become standard in managed care reporting
• We also need standard productivity measures
and outcomes measures
• Purchasing decisions should be linked to
performance
Questions?
Dr Andrew Good
agood@prognosys.co.za / 072 797 7279
THANK YOU