The challenges of same day surgery: a Medscheme perspective

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1 The challenges of same day surgery: a Medscheme perspective DHA Conference 30 th October 2015 Dr Jenni Noble

2 CONTEXT prices in the private healthcare sector are at levels that only a minority of South Africans can afford 1 1 Private Healthcare Market Inquiry Statement of Issues, 2014

3 HEALTHCARE INFLATION Increase in Claims per life per month Medscheme research shows utilisation drives 50% of growth in total claims

4 STAGNANT INSURED POPULATION Source: CMS Annual Report 2014/2015 Growth: 0.4% (8.78 million to 8.81 million) Negative growth in the restricted schemes

5 MEDSCHEME APPROACH: POPULATION HEALTH MANAGEMENT Stratified population High risk individuals Emerging risk individuals Diseased individuals Individuals with risk factors or acute episodes Healthy individuals

6 Office-based facility Acute Hospital Day Clinic APPROPRIATE LEVEL OF CARE Right person, right procedure, right place, right time

7 Acute hospital APPROPRIATE LEVEL OF CARE Service Facility ASA Class ASA Rating Resus Level Procedure ASA 1-2 Level 1 BLS Office Based Day Clinic Surgery (minor) ASA 3-4 All ACLS Surgery (major) All All ACLS

8 DAY CASES AND DAY CLINICS % of Total Cases done as Day Cases and % done in Day Clinics 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 44% 42% 43% 12% 12% 12% % Same day cases % Same day cases in day hospitals Internationally: Day surgery 60% to 80% of all surgical procedures Growth in day surgery over past 20 years Source: Medscheme database

9 CHALLENGES Dominance of acute hospitals Day clinic geographical access Supply induced demand Day clinic value proposition Lack of specialists buy-in Lack of cost sensitivity 3 rd party payer Lack of patient channelling

10 ACUTE HOSPITALS VERSUS DAY CLINICS Day clinics 29% Acute hospitals 71% Acute hospitals Day clinics

11 INCREASE IN HOSPITAL BEDS Group Mediclinic 271 Midstream (176 beds) Mediclinic Durbanville Mediclinic Limpopo 159 Life Healthcare Netcare 178 Hilton Hospital (94 beds) Pinehaven 100 beds; Polokwane 200 beds Netcare Waterfall (68); Ferncrest (48) Netcare St Annes (38); Kingsway (48) Red text = acute hospitals Black text = day clinics

12 INCREASE IN HOSPITAL BEDS Group NHN / Independent Busamed Paardevlei Advanced Durbanville Advanced Worcester Cure Bellville Intercare Century City Melomed Tokai (148) Melomed Richards Bay (100) Busamed Harrismith (120) Busamed Modderfontein (170) Derdepoort (120) Ahmed-Al-Khadi (150) Fairview Private Hospital (270) Capital surgical: Umhlanga, Chatsworth Advanced Panorama Advanced Soweto Advanced Knysna Advanced Waterkloof Somerset Cure Fourways

13 SUPPLY INDUCED DEMAND

14 PROVIDER-RELATED SUPPLY INDUCED DEMAND

15 LOS INCREASING LENGTH OF STAY Year

16 DAY CLINIC VALUE PROPOSITION Cost Comparison Cost per Event NHN Day Clinics versus Acute Hospitals All procedures 4% Excluding cataracts 12% Excluding cataracts and lens procedures 13%

17 DAY CLINIC CHALLENGE Is the difference in input costs fully reflected by the tariff differential between acute hospitals and day clinics? What models will encourage provider price sensitivity? What of quality?

18 ENHANCE THE DAY CLINIC VALUE PROPOSITION Differentiate from acute hospitals Cost efficiency Must significantly differentiate from acute hospitals Reimbursement models address price insensitivity Fixed fees Global fees Quality Share objective quality indicators

19 QUALITY INDICATOR MEASURES Share objective quality indicators Procedure quality markers Procedure/surgery complications rates Readmission rates to same or different day case facility Readmissions to same of different hospital Mortality and morbidity rates Facility quality markers Infection rate Unplanned Cancelation (Did not arrive) rates Client Satisfaction Key objective quality measures include the patient s view on: Doctor/Nurse Facility Cleanliness/Appearance Friendliness of staff Ease of navigation of system

20

21 THANK YOU!

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