REPLY BY THE SOUTH AFRICAN ORTHOPAEDIC ASSOCIATION (SAOA) ON THE INQUIRY INTO PRIVATE HEALTHCARE: SUBMISSIONS BY STAKEHOLDERS THAT IMPLICATE

Transcription

1 REPLY BY THE SOUTH AFRICAN ORTHOPAEDIC ASSOCIATION (SAOA) ON THE INQUIRY INTO PRIVATE HEALTHCARE: SUBMISSIONS BY STAKEHOLDERS THAT IMPLICATE ORTHOPAEDIC SURGEONS 5 MARCH

2 Table of Contents 1. Right to reply Reply to specific matters raised Utilisation increases Cost of orthopaedic procedures Price setting, price negotiation and price benchmarking Coding matters Arthroscopy Conclusion

3 1. Right to reply The SAOA, the professional association for orthopaedic surgeons in South Africa and those abroad who have had orthopaedic training in SA or who show a continuing interest in the affairs of the Association, in this submission respond to a number of assertions made in the submissions by other stakeholders. It also refers to its initial submission, where its views on a number of matters raised pertinently, such as the supposed necessity to employ practitioners to control cost, utilization and ensure care coordination, was addressed. As the reasons for these, and other matters have now become more transparent, further information is provided to substantiate the views of SAOA. 2. Reply to specific matters raised 2.1. Utilisation increases The SAOA acknowledge the increase in the volume of orthopaedic surgical procedures, but deny the allegations that our members are over- servicing. This allegation is implicit in many of the submissions, as increased utilization in procedures and related aspects such as hospital admissions, are done by medical practitioners. Over- servicing refers to the rendering of care that is inappropriate and/or unnecessary and/or superfluous over and above other, appropriate, care already rendered. Over- servicing constitute an unprofessional act, and is prohibited by the Health Professions Act, 1974, the 2006 Ethical Rules and the numerous documents published by the HPCSA to further give guidance on this matter, most notably the Perverse Incentives Policy, 2008 (Annexure A ) and the Undesirable Business Practices Policy, 2006 (Annexure B ). Over- servicing would also constitute possible criminal offences. In addition, it would be a violation of the National Health Act on informed consent (i.e. portraying care as a relevant option whereas it is not), the Consumer Protection Act (i.e. misleading the consumer as to the care (service) required) and possibly fraud. If it is true that there are many instances of over- servicing, one would have expected large numbers of forensic investigations by medical schemes, and the SAOA excutive is not aware of any such allegations currently from medical schemes and/or of large numbers of complaints at the HPCSA. To the best of our knowledge, this is not the case. During the past number of years, we have not had no more than 3 incorrect coding issues. Most importantly, surgery and orthopaedic procedures are subject to medical scheme pre- authorisation. The scheme would in the ordinary course of events not provide pre- authorisation for surgery or procedures that are unnecessary or not within benefits (either as a PMB condition or as benefits outside of the PMBs). Where pre- authorisation was obtained in a fraudulent manner, the scheme would be fully entitled, and do have all the legislative mechanisms (such as reversal of payments) to take action. 3

4 In addition to the above, and in contrast to many other professionals and facilities, orthopaedic surgeons spend significant time complying with informed consent processes, and many have developed forms and information brochures, as well as use models, to explain to patients their conditions and the treatment options available to them. As orthopaedic procedures carry a significant number of risks, it is imperative that patients understand the benefits, but also the risks, of the various options available to them. The Consumer Protection Act requires patients to agree in writing to risks that could be serious, and those that are unusual / unexpected. The National Health Act compels practitioners to discuss available options with patients. This means that even procedures that may be more expensive, devices that may be more expensive and/or high- tech have to be offered to patients when such options are, according to the Act generally available. The HPCSA Ethical Rules require of a practitioner (ethical rule 27A) to always act in the best interest of his/her patients, and to provide patients with care that is agreed to, is appropriate and cost- effective, provided that the patient understands what the other options are s/he has given up on (ethical rule 23). Therefore, even if schemes or hospitals deem it better for doctors to keep a lid on it they are by law and ethics obligated to discuss options, even those that may not be the cheapest or most cost- effective. The above is further complicated by patients doing their own research, and understanding the benefits of shorter lengths of hospital stay, faster return to work or a return to a more active lifestyle, procedures that are less invasive, equipment that are more custom- made and in general less risky interventions (arthroscopic versus open surgery). These patients approach doctors with a good understanding of the options available to them and are active participants in determining the care they require. For such patients, where they would have been adequately and appropriately treated with less high- tech options, the regulations to the Medical Schemes Act contain provisions that co- payments can be imposed of the condition is a PMB (for the difference in cost), and with non- PMBs the scheme can refuse to fund all, or part of the patient- chosen care. As many submissions also point out, demographics (age, gender, disease patterns) play a significant role in the above CPI- increases of medical scheme premiums and healthcare costs. By and large, patients requiring orthopaedic interventions are older patients. Add to this the well- known impact of motor- vehicle accidents and injuries at work (many submissions also referred to the 2008 Roadmap to Health data on disability- adjusted life years prevalence of certain conditions where injuries are one of the top drivers), and increases in utilisation of orthopaedic services is not all to surprising. What is noteworthy from the hospital submissions, is that the increase in utilisation did not led to longer theatre time in minutes, neither to increases in length of stay. This should be a good thing! In addition it is acknowledged, and in some cases undisputed by commentators, that there are now improved outcomes due to better and newer procedures and technology. The SAOA would therefore welcome the institution of mechanisms to measure health outcomes, and believes that many schemes and administrators are already in possession of data that would allow them to do so. Also important to note that the surgeon works for a set, all- inclusive, fee for the surgical procedure. S/he is the only person in the surgical team who has no incentive to prolong the surgical time, patient stay in intensive care, high care or in the ordinary ward. Post- operative visit is included in the total fee. Other professionals tariffs are time- based, relate to numbers of visits and/or consultations, as well as where the patient is (ICU, ordinary ward, etc.). 4

5 Through its interactions at global conferences and the likes, the SAOA understands that there is globally an increase in the volume of total joint replacements. These volumes are also often used as a quality measure. Once again demographics seem to play a significant role: people live longer, work longer, they are more active, and they require functioning joints. Their quality of life, and their reliance on early retirement, disability cover (whether from private or state), their reliance on others, etc. are significantly reduced. As much as over- servicing may be a problem, in the absence of a system whereby outcomes are measured, under- servicing is as much of a risk, as is inappropriate care. Incentivisation of a reduction in the volume, or reduced utilisation of specific cost- driving orthopaedic procedures, could have severe implications for practitioners in terms of law suits, (e.g. being negligent in not offering patients specific options that are generally available and/or in not taking steps to prevent more severe harm in future, etc.) but also in terms of the overall health outcomes and the burden on society and medical schemes in the longer term Cost of orthopaedic procedures To illustrate that tariffs and reimbursement have not kept pace with the cost and risk of running an orthopaedic practice (as was also confirmed by the scientific practice cost studies and then by High Court in the RPL case), the following example is provided: According to the 2006 Doctors Billing Manual (DBM) the NRPL rate for a Total Hip Replacement (THR) was R , using the single code Although neither NRPL, nor RPL exists now, the general equivalent rate in 2015 for code 0637 is about R for THR. This amounts to an approximate inflation- related 5,7% increase per annum since Other costs that make up the total cost for a medical scheme of the procedure include prosthesis costs (ceramic- on ceramic cementless costs of approximately R to R per prosthesis). The SAOA understands that the total costs for a hip replacement could be between R R , making the share of the healthcare professional negligible. Not only does this illustrate that the surgeon cannot be deemed to be the cost- driver in terms of medical scheme reimbursement, it is simply wrong that the person who takes professional liability and coordinates care, is remunerated at about 2.2% of the total procedure cost. According to one of the Medical Schemes the average bill of the surgeon in 2013 for a THR was R8000. This constituted about 5,3% of the total expenditure. The same Scheme pays currently about R12000 per THR and this equals about only 6,6% of the total expenditure. An international study 1 reflected that the South African Surgeons portion of the total bill for a THR is about 4,5% versus 7,2% in the USA or 10,4% in Australia. The prosthesis cost, as a percentage of the total cost for a THR is 23,2% in SA, 30,3% in the USA and 38,75% in Australia. A quick review by one of our members of recent accounts (their own and that of the hospital) have revealed: All- inclusive Hospital Device suppliers Doctor Total Hip Replacement R R R R Total Knee Replacement R R R R Hip Arthroscopy R R R Knee Arthroscopy R R6 000 R Dr Kevin Bozic from San Francisco (UCFS). 5

6 The above, coupled with the information already provided in the initial submission (on how practitioners set their fees), makes it clear that the tariffs of surgeons can in no way be seen as a cost driver for the PMBs in particular, and for non- PMBs (i.e. scheme discretionary) benefits. If global fees are alternative reimbursement mechanisms are set along the above lines, orthopaedic surgeons would be worse off, and one may find a decline in this already scarce skill. In the practice cost studies, drafters worked in the costs of becoming an orthopaedic surgeon (at least 11 years in training, and an additional two years in many cases in the public sector), and maintaining that status (through mandatory CPD events, local and international congresses). Not many professionals outside the health sector can claim an equal duration and intensity of study and work, before being registered as a specialist in their field. In addition, the practice costs studies referred to in our initial submission showed that orthopaedic fees are approximately 365% less than what it should be. Healthman has done medical scheme tariff comparisons over the years, also tracking the last published NHRPL (2006) reference prices as it would have been adjusted over the years. The costs of legal- and ethics compliance, undertaking care coordination (i.e. with the anaesthetist, physiotherapist and hospital), as well as undertaking towards medical schemes pre- authorisation, motivation and appeals on behalf of patients, adds to an increasing regulatory- and administrative burden. The medical schemes administrative burden is unfortunately not scalable, as benefits, pre- authorisation and motivation processes differ significantly from scheme to scheme Price setting, price negotiation and price benchmarking From the survey SAOA did, it was clear that most practitioners set their fees in direct response to scheme reimbursement levels. This shows a sensitivity to the environment and the schemes to which patients belong. It should also be stated that for a number of orthopaedic procedures, orthopaedic surgeons are at the mercy of scheme benefit levels and scheme reimbursement processes. As such orthopaedic surgeons are clearly price takers. PMB care is limited to emergencies and there are a limited number of PMB conditions which must be funded as described, in the regulations. This means that for all other procedures, orthopaedic surgeons have very little to claim from schemes, and even where there are PMBs that should be funded (in theory) in full. The PMBs are limited to the following: MUSCULOSKELETAL SYSTEM; TRAUMA NOS Code: Diagnosis: Treatment: 353H Abscess of bursa or tendon Incision and drainage 32H Acute osteomyelitis Medical and surgical management 950H Cancer of bones treatable Medical and surgical management, which includes chemotherapy and radiation therapy 206H Chronic osteomyelitis Incision and drainage 902H Closed fractures/dislocations of limb bones/epiphyses excluding fingers and toes Reduction/relocation 85H Congenital dislocation of hip; coxa vara and valga; congenital clubfoot Repair/reconstruction 147H Crush injuries of trunk, upper limbs, lower limb, including blood vessels Surgical management; ventilation; acute renal dialysi 491H Dislocations/fractures of vertebral column without spinal cord injury Medical management; surgical stabilisation 6

7 500H Disruptions of the achilles/quadriceps tendons Repair 178H Fracture of hip Reduction; hip replacement 445H Injury to internal organs Medical and surgical management 900H Open fracture/dislocation of bones or joints Reduction/relocation; medical and surgical management 34H Pyogenic arthritis Medical and surgical management 901H Traumatic amputation of limbs, hands, feet, and digits Replantation/amputation It is noteworthy that, whereas a hip fracture is a PMB, a shoulder fracture is not (only an open fracture is). In order to guide both practitioners, and medical schemes, as to what fair remuneration for both PMB- and non- PMB conditions would be, SAOA supports the idea of a system of price benchmarking. It is, however critical that the pitfalls of the RPL process, that landed in Court, be avoided. For example, it is noted that the Department of Health believes that by setting prices, (instead of completing regulatory reforms), the PMBs could become more affordable. It is this view on healthcare services that have led to the reference pricing system having become a price setting system, thereby leading to the regulations and actions following it, being declared ultra vires the empowering National Health Act. Price setting cannot make good on variables such as practice costs, experienced, efficiency, risk, special interests (e.g. shoulders versus hips), etc. Medical schemes should then be compelled to use the reference or benchmark pricing in setting DSP contracts, alternative reimbursement mechanisms, global fees and networks. Practitioners should be compelled to use the reference price list as a benchmark for setting their own tariffs (as is intended by the applicable provisions in the National Health Act), and be able to defend charging above that. The absence of the types of integrated and big picture datasets in the possession of medical schemes also make the individual orthopaedic surgeon relatively powerless evaluating and agreeing or entering into negotiations, on what is being offered by a scheme. Section 59 of the Medical Schemes Act in any event gives a strong legal power over practitioners, viz. the scheme can at any stage decide to not longer pay the practitioner, but to pay the patient directly. This is an effective deterrent and without amending this entrenchment of unilateral power, schemes will always have legally- sanctioned market power Coding matters One of the allegations by two submissions in particular, is that there are problems with the development of the codes (the allegation being that the profession would or could exploit this to increase income), and that there are up- coding and unbundling of coding. In terms of how codes were set, a scientific and iterative process (where other specialities are also involved to ensure critical reflection) was followed at a combined SAMA private practice meeting, and cross- walks on the USA- accepted CPT4 system is undertaken. SAOA has extracted the relevant parts from the SAMA coding manual for ease of reference to its members, and has not, as is alleged, unilaterally published codes. In terms of allegations of grey areas in coding, one should differentiate between possibilities created by wording and meaning (the same applies to the PMBs, for example) and the by its very nature 7

8 inexact nature of healthcare (no two patients react the same to the same treatment, and a multitude of variable affect how care is delivered), and instances of fraud and unprofessional conduct. Billing for an action not undertaken, or billing as if the care was for one condition, whereas it was for another, is fraudulent and should under no circumstances be condoned. The Medical Schemes Act s section 59 makes provision for reversals of payments in these circumstances. Incorrect billing, and billing mistakes, can be dealt with by medical schemes under regulation 6 to the Act. It prescribes a mechanism to deal with such instances, and it would include billing interpretational differences. SAOA finds it odd that the schemes that have contributed account examples to the BHF and DoH submissions have not exercised the powers afforded to them by law. SAOA has also been willing to evaluate accounts whether coding (a) accurately reflects what practitioners have been doing, i.e. whether the service was rendered and (b) whether the patient had agreed to the proposed fee prior to service delivery, and to deliver an opinion as to whether coding used was appropriate or not Arthroscopy The allegations in relation to arthroscopic procedures are dealt with under the heading: utilisation increases, above. The total bill for an arthroscopy is much higher than the surgeon s fee. Some of this is, in the view of SAOA, due to prohibitively expensive disposables (trade cost). 3. Conclusion SAOA thanks the Commission and Panel for this opportunity and will be happy to further engage on any matter raised herein. SAOA can be contacted via its office on the following contact details: 8