Regulatory environment needs a shake-up – Broomberg
Speaking on challenges in private healthcare during a
presentation at Discovery’s head office in Sandton on 29 May,
Broomberg said the notion that cost-efficiency was to the
detriment of quality care was simply untrue and the very
opposite of modern trends in healthcare. Eye-care hospitals were
leading the specialty hospital field locally while one
orthopaedic centre had opened, with licence applications for
others in the pipeline. Specialists – and investors – were
showing increasing enthusiasm for an idea that would create
competition and free up beds in general acute hospitals. He said
Discovery Health conducted a case study on a new hospital pilot
model for hip replacements, partnering with willing orthopaedic
surgeons and using UK-derived care pathways. They found that the
average length of patient stay dropped from 7.34 days to 3.5
days, theatre time dropped from 126 minutes to 75 minutes,
routine high-care stays of 1.22 days were eliminated and costs
plummeted from R110 000 to R70 000 per patient.
Let hospitals employ doctors, change payment mechanism
One of the critical regulatory changes South Africa needed was
for the HPCSA to scrap the requirement that no hospital could
employ a doctor – as this would eliminate the impact of
fee-for-service billing which gave doctors a financial interest
in the decisions they made about a patient (e.g. length of
hospital stay). The entire payment mechanism needed changing to
one in which doctors took responsibility for the care of a
population of patients – and the cost of a clinical episode,
thus radically ‘dampening down’ the risk of waste in the use of
healthcare resources. ‘Then it’s not just the doctors’ fees that
are their concern but the total cost of the system … in that
sense, it’s beneficial for doctors to have “skin in the game” –
there’s an interest in getting costs down and earning the
rewards.’ He cited, but did not name, ‘one of the most famous
hospitals in the United States’ as having all its doctors on the
payroll with the deliberate exclusion of a ‘fee-for-service’
tariff structure, quoting its chief quality officer as saying,
‘We never want doctors to face a financial conflict of interest
with their patients.’ Broomberg said that once the licencing
regime was modernised, ‘progressive’ surgeons conducting
tonsillectomies, implanting grommets, doing gastroscopies or hip
replacements would organise their practices around technology
and partner with eager investors, to create specialised
high-volume surgical centres. All it needed was one facility to
become both successful and competitive and other specialists
would probably jump on the bandwagon. He saw this vision
becoming a reality, ‘within 3 to 5 years’. Another major issue
in South African healthcare was the lack of teamwork. This
stressed out specialists who ended up doing the work of
generalists while generalists found themselves doing
straightforward tasks (including simple diagnostic work) that
could quite easily be done by a mid-level worker or senior
nurse. He suggested medical officers in hospitals do more
workups, including overnight, to spread the load more
efficiently. ‘Also, how often do you get 5 or 6 specialists
walking past the same patient bed over 2 days and not even
talking to each other? We’re trying to drive this change,’ he
added. Borrowing from ‘Obama-care’ in the United States,
Discovery Health was experimenting with ‘the patient-centred
medical home,’ a simple, elegant and exciting concept where GP
practice returned to its rightful place as the ‘medical home for
families – and where you go back to after the specialist – where
records are kept and you get total treatment for life.’
Work together – or we all pay the price
Broomberg said the HPCSA regulations barring different health
professions from working and billing together were archaic.
‘I’ve never understood the rationale. It seems to be some form
of trade protection. What logic is there in saying a GP practice
can’t have nurses, a social worker, physios and specialists
working together? It stands in the way of efficiency. Our
current hospital care is ‘one size fits all’, whether it’s
Sandton or Hermanus; you can get the full range of treatment’.
He said South African healthcare in the 21st century probably
looked like manufacturing did in the early 20th century; ‘it
needs to catch up with what happens in the rest of the global
economy in terms of service delivery’. What was required was
highly specialised production facilities, the most sophisticated
equipment and highly trained individuals at each point in the
process. Broomberg said there were ‘significant opportunities’
for increasing doctor payment by reducing waste and improving
quality. Data showed that in cases costing on average R25 000,
some 20% was paid to the gynaecologist and the remainder to the
hospital (mostly), radiology, pathology, anaesthesiology and
physiotherapy. ‘What if you were able to work with the
specialists who after all are making all the other decisions?’
Reducing wastage in the other 80% was a way to pay specialists
more; ‘if you have a 10% reduction in spend on the non-doctor
side, you could increase doctors’ pay by 50% and the medical
scheme and patient will still be in the same position (i.e.
unaffected). We could pay the surgeons or other specialists more
and the scheme still saves money,’ he said by way of
illustration. Most doctors were not aware of the cost of all the
required investigations, or of the clinical pathway needed to
reduce hospital stays. He gave the example of a Discovery
peer-review partnership with paediatricians in which detailed
profiling ‘comparing apples with apples’ led to a saving for
Discovery of R250 million over 4 years and additional payments
of approximately R43 million to participating paediatricians
over the same period. Detailed profiles showed that of 350
paediatricians, 80 were ‘outliers’ in terms of their hospital
admission rates. The Paediatric Management Group peer review
process reduced admissions by a full 10% – and has kept them
down.
High-end claims double in 10 years
A Discovery analysis of the
numbers of claimants per 10 000 population claiming more than
R500 000 per year a decade ago (adjusted for inflation and in
2012 money terms) showed that by 2012 this had doubled. In the
context of the impending Competitions Commission Enquiry into
private healthcare, issues such as disease, ageing,
regulations and technology would be highly relevant, and he
asked that the commission review the health sector ‘in a
holistic way’. An article in the Journal
of American Medicine
lead authored by Don Berwick,1 a leader in the USA’s
healthcare quality movement, quantified the relative causes of
waste in the USA healthcare system – which Broomberg said
would be ‘broadly similar here’. It suggested that 21% of all
healthcare costs could be wasted. This broke down into 5.9% on
overtreatment (no clinical value added – yet another argument
against a fee-for-service tariff system), 4% on administrative
complexity, 3.8% on failures of care delivery (e.g. nosocomial
infections, mistakes such as incorrect medication), 3.2% in
pricing failures (distortions in the market), 3.1% in fraud
and abuse, and 0.9% for failures of care co-ordination. From
2011 to 2012, Discovery Health achieved an 84% improvement in
fraud savings, recovering R254 million in cash, most of it
through detective work in uncovering the nondisclosure of
pre-existing conditions by claimants at the time they joined
(a 227% improvement), forensic work (a 171% improvement) and
hospitals (a 40% improvement). Broomberg said scams ranged
from criminal syndicates and individual consumers to
healthcare providers ‘and other stakeholders,’ trying to outdo
the system.
‘Card sharing’ a significant problem
In a 12-month dataset of healthcare practices characterised by the visit rates of Discovery Health Medical Scheme (DHMS) members seeming much higher than average, it was found that 70% of the doctors were ‘card-sharing’ (accepting a DHMS membership card not belonging to the patient treated or their listed beneficiaries). Broomberg said 50 such offending practices were removed from the DHMS provider networks. ‘Word got out and doctors began practising a different way,’ resulting in a 13% drop in patient visit rates and a ‘powerful halo effect’. He hoped this meant that other medical schemes had also benefitted, revealing that when doctors were confronted, they generally responded that they were acting out of ‘compassion’ for a poor family or ‘doing their civic duty’. ‘Of course the right answer is: “Doctor, you can’t practise your charity at the expense of the medical scheme – if you want to give a free consult, please do that but don’t claim it from the medical scheme.”’
Broomberg appealed to the Competition Commission not to look
just at healthcare pricing when unpacking healthcare inflation
(running at 3% above CPI). ‘Pricing is a key issue, but if there
was no change in the consumption of services by medical aid
members, you’d find tariffs going up quite close to inflation;
usage factors are vital,’ he maintained. Regarding supply side
cost-drivers, he cited as an example the new high-tech
trans-catheter aortic valve implantation (controlling the flow
of blood to the body) technique, which had increased patient
age-eligibility from 75 (the upper age limit for what was open
heart surgery 2 years ago), to 89 years old. While the procedure
(which has a 30% mortality rate) raised fascinating economical
and ethical considerations, it stood to add 5 to 10 years of
life to a patient – at huge cost (up from R25 000 for the old
procedure to R400 000 for the groin-inserted catheter procedure,
device included). ‘If the evidence is there, it’s well-nigh
impossible for the medical scheme to say this will not be paid
for,’ he said, adding that DHMS had paid for 60 such cases so
far.
1. Berwick DM, Hackbarth AD. Eliminating Waste in US Health Care. JAMA 2012;307(14):1513-1516. [http://dx.doi.org/ 10.1001/jama.2012.362]
S Afr Med J 2013;103(7):443-445.
DOI:10.7196/SAMJ.7113
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