Analysis of current situation and
developing a copayment system in
Health Insurance - Khartoum State
(HIKS) – Sudan.
1
Analysis of current situation and developing a
copayment system in Health Insurance - Khartoum
State (HIKS) – Sudan.
prepared by:
Omer Mukhtar Abdulkhalig Ahmed
(M.Sc in Health Economics- University of Khartoum)
2
Introduction
3
Introduction
 Health insurance is defined as “a contract
between the insured and the insurer to the effect
that in the event of specified events (determined in
the insurance contract) occurring the insurer will
pay compensation either to the insured person or
to the health service provider. There are two
major forms of health insurance. One is private
health insurance, with premiums based on
individual or group risks. The other is social
security, whereby in principle society’s risks are
4
Introduction
pooled, with contributions usually dependent on
their capacity to pay”(Guide to producing national health accounts:
with special applications for low-income and middle-income countries, 2003).
 New theory suggests that health insurance provides
an economy wide redistribution of income from
those who remain healthy to those who become ill
which is efficient and it increases the welfare of
society (Nyman, 2004).
5
Introduction
 One of the problems that facing health insurance
plans is a moral hazard which refers to the
additional health care that is purchased when
persons become insured. This is regarded, by
health economists, as inefficient because health
care is represented less than its cost of the
production (Nyman, 2004).
6
Introduction
 Copayment, which is defined as “an amount
under a health insurance scheme for which the
insured person is liable. Copayments take the
form of deductibles and/or coinsurance” and
Coinsurance, which is defined as “a form of
copayment in which the consumer pays a fixed
amount or a percentage of the charges for each
good or service rendered”, are considered as
mechanisms which done by the insurance
companies to contain the cost (Guide to producing national
health accounts: with special applications for low-income and middle-income
countries, 2003).
7
Introduction
 It is important for policy makers to understand
the expenditure elasticity, i.e., the ways in which
consumer demand for health services changes in
response to differences in out-of-pocket costs
(Duarte, 2012).
 It is found that, in studies done in different
countries, health expenditure income elasticity is
higher at low-income levels and lower at higher
income levels (Matteo, 2003).
8
Introduction
 Because copayment can reduce both
necessary and unnecessary medical utilization, it
may cause unintended outcomes in the
treatments of some diseases, because there are
certain groups of patients more sensitive to
copayment changes, like non exempt patients on
regular medications, the elderly and those on
low incomes (Chen, Lee, Lin, Lee, Li, & Wu, 2012).
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Research Problem
10
Research Problem
 HIKS faces an increasing manner of the total
cost of the health care services which are
provided in two major groups, pharmaceutical
services and medical services . This is may be
due to many factors, like the universal coverage
plan, the increase of prices of health care
services, supply-induced demand …etc. But, this
increasing cost may influenced by other factors
like moral hazard.
11
Research Objectives
12
Research Objectives
 Because there is already copayment in the
pharmaceutical services, the research aims to
analyze the cost of medical services in 2012 to
detect the medical services that cause 80% of the
total cost of medical services to introduce
copayment system in these detected medical
services, so as to decrease the cost of medical
services which me be influenced by moral
hazard.
13
Research Methodology
14
Research Methodology
 The research methodology is
retrospective cross sectional study.
mainly
a
 It is a descriptive study rather than proving of
hypothesis due to the limitation of the data.
 It is applied conclusion-oriented study.
15
Research Methodology
 The data is analyzed by using Microsoft Excel’s
tables and charts by using Pareto 80/20 rule to
determine the medical services that cause 80% of
the total cost of medical services.
 Pareto 80/20 rule is a causal relationship between
the minor factors that cause the majority of the
effect.
16
Research Methodology (cont.)
 Also, Pareto 80/20 rule is applied to analyze two
medical services from these selected medical
services, which contain many subservices, to
detect sub-medical services that cause 80% of the
total cost of each of these two medical services.
This is because, these sub-medical services are
technically and costly different.
17
Results & Findings
18
Results & Findings
 It is found that 8 medical services, from 34
medical services, after exclusion operations
because it was already involve copayment,
caused 79.65% of the total cost of medical
services, which were 23.5% of the total number
of medical services.
 These 8 medical services were: laboratory
investigations, consultant visits, GP visits,
ophthalmic services, ultrasounds, MRI, X-Rays
and CT.
19
Results & Findings (cont.)
No.
Medical Service
Cost
%
Accumulative %
1
Laboratory Investigations
23,379,557.13
33.23
33.23
2
Consultant Visits
9,912,551.50
14.09
47.31
3
General Practitioner (GP) Visits
6,777,225.54
9.63
56.95
4
Ophthalmic Services
4,644,932.50
6.60
63.55
5
Ultrasounds
3,890,776.50
5.53
69.08
6
Magnetic Resonance Imaging (MRI)
2,820,793.00
4.01
73.09
7
X- Rays
2,408,987.75
3.42
76.51
8
Computed Tomography (CT)
2,208,929.00
3.14
79.65
9
Operations
3,447,777.00
4.90
84.55
10
Hospital Admissions
1,632,389.00
2.32
86.87
11
Physiotherapy
1,560,786.00
2.22
89.09
12
Dental Services
1,294,899.00
1.84
90.93
13
Dentist Visits
691,477.50
0.98
91.91
14
Others (21 Service)
5,691,623.50
8.09
100.00
Total
70,362,704.92
100
20
Results & Findings (cont.)
 As a result of the analysis of laboratory
investigations and ophthalmic services, which
they contain many sub-services, it is found
that:
 30 laboratory investigations, which were
10.6% of the total number of laboratory
investigations, were responsible for 80.59% of
the laboratory investigations cost.
21
Results & Findings (cont.)
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
Laboratory Investigation
CBC
Urine General
TWBC
BFFM
Random Blood Suger
Hb%
TFT
Fasting Blood Suger
S. Creatinine
Blood Urea
I.C.T For Malaria
Widal For Enteric A
ESR
S. Uric Acid
Renal Profile Test
Stool General
S.K+
S.Na+
Hb A1C
TWBC Diff
Widal For Salmonella Shigellosis
Lipid Profile
HDL / LDL
Cholesterol
Histopathology
PSA
S.Ca+
T3
T4
Pregnancy Test
Triglyceride
Liver Function Test
Others (251)
Total
Cost
2,429,099.75
2,215,726.00
1,168,326.00
1,119,727.00
1,070,664.00
1,010,600.50
889,615.00
888,185.00
818,113.75
750,746.25
698,297.00
596,980.00
570,571.03
506,006.50
490,861.50
388,473.50
373,218.50
359,092.00
342,985.00
255,660.00
233,622.00
229,056.00
218,905.00
191,036.75
179,075.00
174,540.00
174,193.00
172,623.00
170,519.00
170,410.25
170,386.00
167,706.00
4,204,282.85
23,399,303.13
%
10.38
9.47
4.99
4.79
4.58
4.32
3.80
3.80
3.50
3.21
2.98
2.55
2.44
2.16
2.10
1.66
1.59
1.53
1.47
1.09
1.00
0.98
0.94
0.82
0.77
0.75
0.74
0.74
0.73
0.73
0.73
0.72
17.97
100.00
Accumulative %
10.38
19.85
24.84
29.63
34.20
38.52
42.33
46.12
49.62
52.83
55.81
58.36
60.80
62.96
65.06
66.72
68.31
69.85
71.32
72.41
73.41
74.39
75.32
76.14
76.90
77.65
78.39
79.13
79.86
80.59
81.32
82.03
100.00
22
Results & Findings (cont.)
 And 8 ophthalmic services, which were 9.76%
of the total number of ophthalmic services, were
responsible for 79.22% of the ophthalmic
services cost.
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Table 3
Results & Findings (cont.)
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
Ophthalmic Service
Phaco Foldable *
Argon Laser
OCT
AC/PC + IOL
Avastin Intra-Vitreal Injection
A&B Ultrasound
Perimetry
YAG LASER
P.P.V *
Fundus Flurecein
Removal Of Silicon Oil *
Chalazion
Others (70 Service) **
Total
* Already copayment was involved.
Cost
1,707,000.00
636,000.00
358,200.00
333,400.00
194,200.00
164,680.00
144,620.00
141,800.00
132,300.00
76,900.00
58,000.00
55,720.00
642,112.50
4,644,932.50
%
36.75
13.69
7.71
7.18
4.18
3.55
3.11
3.05
2.85
1.66
1.25
1.20
13.82
86.18
Accumulative %
36.75
50.44
58.15
65.33
69.51
73.06
76.17
79.22
82.07
83.73
84.98
86.18
100
** Include five services already involved copayment.
24
Conclusions & Recommendations
25
Conclusions & Recommendations
 More studies must be done to determine
suitable copayment rate that would be
introduced to the medical services.
 If copayment system is introduced, it would be
introduced to the detected 8 medical services
and to the detected sub-medical services which
include 30 laboratory investigations and 7
ophthalmic services (service no. 1 in the
ophthalmic services table is already involved
copayment).
26
Conclusions & Recommendations (cont.)
 More studies must be done to determine if any
groups - according to specific specifications - of
enrollee demand more services than others.
 More studies must be done to determine if any
specific groups may be excluded from copayment;
like: pregnant women, patients above 70 years old,
children under 5 years old, …etc.
27
Conclusions & Recommendations (cont.)
 If any copayment rate is introduced, more studies
must be done to determine the effect of this
copayment rate on the demand of medical
services, i.e. the elasticity of demand, and its
effect on the overall cost of the medical services.
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References
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References
 Chen, L.-C., Lee, Y.-Y., Lin, T.-H., Lee, C.-S., Li, C.-J., & Wu, D.-C. (2012).
How Does Out-of-Pocket Payment Affect Choices When Accessing. Value in
Health Regional Issues , 1 (1), 105-110.
 Duarte, F. (2012). Price elasticity of expenditure across health care services.
Journal of Health Economics , 31 (6), 824–841.
 Guide to producing national health accounts: with special applications for
low-income and middle-income countries. (2003). Geneva: World Health
Organization.
 Matteo, L. D. (2003). The income elasticity of health care spending. The
European Journal of Health Economics , 4 (1), 20-29.
 Nyman, J. A. (2004). Is ‘Moral Hazard’ Inefficient? The Policy Implications
Of A New Theory. Health Affairs , 23 (5), 194-199.
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