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Presentation on Tariff Guidelines. 22 August 2012 Parliamentary Portfolio Committee on Health. Who is SAMA?. SAMA is a Doctor’s organisation Originally founded in 1927 Transformed in 1998 by amalgamation of all major doctor groupings Section 21 company and a registered Trade Union - PowerPoint PPT Presentation
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22 August 2012Parliamentary Portfolio Committee on Health
Who is SAMA?• SAMA is a Doctor’s organisation
– Originally founded in 1927– Transformed in 1998 by amalgamation of all major
doctor groupings
• Section 21 company and a registered Trade Union– Not for profit organisation
• Represents >17 000 Doctors in public service and private practice
SAMA’s Coding history• First coding booklet published in 1944
– Annually updated ever since –> called the Doctors Billing Manual (DBM)
• >60 years of intellectual property in DBM• SAMA is the steward of doctor’s codes
– Custodian for future generations of Doctors
The SAMA DBM• The DBM represents the scope of practice of
the medical profession• Current format first created in 1975• Why does SAMA do coding?
– SAMA is a neutral referee– Inter disciplinary relativity is maintained
• The DBM is the recognised industry standard– Today used by HPCSA & Discovery, GEMS and
BHF, representing over 80% of medical schemes
Tariffs past and present• Until 1978 SAMA Rate and RAMS Scale of Benefits were equal
– Scale of Benefits then became lower than SAMA rate– RAMS replaced by the BHF– Subsequently SAMA and BHF negotiated tariffs annually
• 2003 = last year SAMA calculated a rate on behalf of doctors
• 2004 – Competitions Commission ruled the above activity “anti-competitive”
• NRPL (National Reference Price List)– 2004 – 2005, CMS produced guideline NRPL– Codes based on SAMA DBM
• NHRPL (National Health Reference Price List)– 2006 NHRPL produced by NDoH– Codes based on SAMA DBM
• HPCSA– Produced an “Ethical Tariff” in 2006– Used NHRPL (multiplied by 3)– 2008 the Ethical Tariff was scrapped
• RPL– basis of the RPL was challenged – RPL declared invalid by High Court of South Africa
Tariffs past and present
SAMA/HPCSA Guideline Tariff process• 15 July 2011
– HPCSA Ombudsman invited SAMA to discuss tariff guidelines
• 22 July 2011– SAMA submits written Tariff Guideline Proposal to HPCSA
• 17 January 2012– SAMA meets with acting HPCSA registrar and enquires
when guideline will be published – stresses importance of using updated DBM for process
• 11 June 2012– SAMA meeting with the new Registrar – above again
emphasized
SAMA/HPCSA 2012 Guideline Discussion Background
• SAMA offered 2012 DBM to HPCSA– Contains 150 altered codes since 2010– Contains 445 altered codes since 2009– Contains 1202 altered codes since 2005
• SAMA offered services of coding department• SAMA delayed publishing of 2012 DBM• SAMA requested a single RCF across all
specialities– RVU gives interdisciplinary relativity
Healthcare InflationHealthcare Inflation• 1990
- Average CPI Inflation = 14.2% - Average Medical Scheme inflation =27.3%- Average contribution PBP/m = R74.45
• 2000-Average CPI Inflation =5.4%- Average Medical Scheme inflation =7.5%- Average contribution PBP/m = R343.45
• 2010-Average CPI Inflation =4.3%- Average Medical Scheme inflation =11.3%- Average contribution PBP/m =R975.82
1981R11.73 PBPm
2010R168.08 PBPm
2010R975.82 PBPm
Scheme Expenditure per beneficiary per month
2010 ContributionsR975.82 PBpm
2010 ContributionsR975.82 PBpm
Healthcare Costs?• Administrator cost
• Managed Care cost
• Broker fees
• Actual cost of healthcare
2010R11,564,770,000
Council for Medical Schemes 2009/2010 Annual report p214
“Administrators and businesses associated with administrators
often provide managed healthcare services. In many instances, these
services are merely additional layers of administration costs with questionable benefits for the
schemes themselves.”
Medical Scheme Membership as % of Population
Broker Summary• 2000 - 2010
– 16% population growth• 19% MS membership growth• 9.4% MS membership growth excluding GEMS
– 1 326 587 new MS members• 665 377 new MS members excluding GEMS
– Cost of R8.85 Billion• R6 670.13 per new MS member• R13 298.50 per new MS member excluding GEMS
Conclusion• Brokers are being paid large sums of
money but have effectively attracted few new members
• MHC has not succeeded bringing down healthcare costs only GP visits
• Administrators are charging medical schemes significantly
• Hospitals are a significant cost
How to determine an RCF?Days Per Year 365Weekend Days -104Annual Leave -22Public Holidays -11CPD Days -5Sick Leave -8Available Working Days 215Working Hours Per Day 8Available Working Hours 1,720Productivity Factor 0.75Productive Hours Per Year 1,290Consulting RVUs per hour 45
Annualised 2012 Overheads
2012ALL
SPECIALISTSCONSOLIDATED
SURGICALCONSOLIDATED
CONSULTING GP'S
Staff Salaries & Related Costs R 367,641.41 R 388,408.88 R 327,993.68 R 307,750.50 Equipment Costs R 79,696.59 R 79,591.03 R 79,898.33 R 66,201.14 Rend and Utilities R 84,652.12 R 90,249.23 R 73,966.95 R 93,099.39
Practice Management & Administration R 205,769.88 R 216,428.07 R 185,423.48 R 151,330.63 Finance & Insurance R 131,315.00 R 146,343.44 R 102,623.38 R 91,300.15 Other R 17,762.48 R 18,794.64 R 15,792.00 R 18,134.29 Total Costs R 886,837.48 R 939,815.28 R 785,697.83 R 727,814.93
SAMA 2012 RCF = R28.93
2012 Salary Comparison of Private Practitioners versus Public Sector Practitioners versus Corporate Employed Accountants
Job Title & DescriptionSalary Per Annum Salary Per Productive
Hour RCF
Lowest Highest Lowest Highest Lowest Highest
*Calculated Private Practice GPs SalariesGP - More than 10 years R 1,418,732.93 R 1,591,619.93 R 1,099.79 R 1,233.81 R 24.44 R 27.42
Comparative Salary if GPs Private Practice overheads are added to Public Sector Salaries
Senior Clinical Manager (Medical) Grade 2 R 1,686,500.93 R 1,760,582.93 R 1,307.37 R 1,364.79 R 29.05 R 30.33*Calculated Private Practice Specialists' Salaries
Specialist - More than 10 years R 1,817,395.48 R 2,050,243.48 R 1,408.83 R 1,589.34 R 31.31 R 35.32
Comparative Salary if Specialists' Private Practice overheads are added to Public Sector Salaries Head : Clinical Department (Medical) Grade 2 R 2,385,331.48 R 2,477,290.48 R 1,849.09 R 1,920.38 R 41.09 R 42.68
*Comparative Salary if GP Private Practice overheads are includedRobert Walters Survey of Corporate Salaries for Accountants 2011Audit/Tax/Accountancy/Treasury Director Level - 5+ years exp R 1,627,814.93 R 1,727,814.93 R 1,261.87 R 1,339.39 R 28.04 R 29.76
*Comparative Salary if Specialists' Private Practice overheads are includedCorporate Finance (CA (SA)) Corporate Finance CA - 5-10 years exp R 1,636,837.48 R 1,886,837.48 R 1,268.87 R 1,462.66 R 28.20 R 32.50Tax Specialists (CA (SA)) Director - 8+ years exp R 1,986,837.48 R 3,386,837.48 R 1,540.18 R 2,625.46 R 34.23 R 58.34
*Excludes risk compensation factor
2012 HPCSA Tariff Guideline
– 62% increase in doctors’ input costs since 2003– Malpractice insurance costs are increasing
exponentially– Massive administrative burden
• 98 Medical schemes with on average 5 options each• 490 different tariff guides• 490 different protocols and formularies• Exhaustive authorisation and motivation procedures• 5 -10% of income to claims bureaus
Conclusion• Benchmark tariff is essential
– Provide much needed stability and framework– NHI process will require an appropriate tariff
guideline
Suggested Way Forward• SAMA suggests a benchmark tariff
– Must be based on actual practice cost studies– Must include Tiered Tariffs
• SAMA 2012 DBM used as the standard– Tariff codes are the scope of practice of the
medical profession
• Access = affordable healthcare + available doctors
Suggested Way Forward• SAMA willing to work with the HPCSA
– Use the 2012 DBM as basis for tariff guideline– Must use actual cost studies on which to base tariffs
• Competition Commission– Medical Industry must be exempted– Allow SAMA to suggest guideline to members– Allow doctors and funders to negotiate tariffs
• Pricing Commission– The composition of Pricing Commission to be
equitable