CMS Strategic plan, annual performance plan and budget

1. CMS Strategic plan, annual performance plan and budget Portfolio Committee on Health 22 April 2015

2. INTRODUCTION OF CMS DELEGATION • Prof. Yusuf Veriava - Chairperson of Council • Mr. Daniel Lehutjo - CFO / Acting Registrar & CEO • Mrs. Tebogo Maziya - GM: Financial Supervision • Mr. Craig Burton-Durham – GM : Legal Services Unit • Mr. Paresh Prema – GM: Benefits Management Unit

3. CONTENTS • Introduction of the CMS and its legislative mandate • Strategic Plan • Strategic Objectives • Budget • APP

4. INTRODUCTION OF CMS AND ITS LEGISLATIVE MANDATE Mr Daniel Lehutjo CFO, Acting CEO & Registrar

5. INTRODUCTION OF CMS • Created in terms of the Medical Schemes Act 131 of 1998 • Regulates the private healthcare industry – medical schemes, administrators, brokers, managed care providers

6. CMS LEGISLATED MANDATE • CMS is established in terms of Medical schemes Act 131 of 1998 • Section 7 of the Act confers the following functions on Council • protect the interests of the beneficiaries at all times; • control and co-ordinate the functioning of medical schemes in a manner that is complementary with the national health policy; • make recommendations to the Minister on criteria for the measurement of quality and outcomes of the relevant health services provided for by medical schemes, and such other services as the Council may from time to time determine; • investigate complaints and settle disputes in relation to the affairs of medical schemes as provided for in this Act; • collect and disseminate information about private health care; • make rules, not inconsistent with the provisions of the Act for the purpose of the performance of its functions and the exercise of its powers; • advise the Minister on any matter concerning medical schemes; and • perform any other functions conferred on the Council by the Minister or by the Act.

7. LEGISLATIVE AND OTHER MANDATES • Constitution of RSA –Section 9, Section 27 of Chapter 2 of the Bill of Rights, Section 36 • National Health Act – key objective is to unite various elements of the national health system - promote spirit of shared co-operation and responsibility amongst public and private health providers, professionals and other role-players

8. LEGISLATIVE AND OTHER MANDATES • National Development Plan Vision 2030 • Sets out nine priority areas, with several referring to required interventions to achieve a more effective health system • NDoH strategic goals 2014 -2019

9. CMS STRATEGIC GOALS • Goal 1 • Access to good quality medical scheme cover is maximized • Goal 2 • Medical schemes are properly governed, are responsive to the environment, and beneficiaries are informed and protected • Goal 3 • CMS is responsive to the needs of the environment by being an effective and efficient organisation • Goal 4 • CMS provides influential strategic advice and support for the development and implementation of strategic health policy, including support to the NHI development process

10. CMS STRATEGIC GOALS Access to schemes 1 Medical schemes 2 Regulator 3 Strategic review 4

11. Looking forward... Strategic focus areas for next 5 years • strengthening regulatory mandate, amendment of the Medical Schemes Act and regulations, measuring the quality and outcomes of healthcare in medical aid schemes • assessment of the value add of managed care in the medical scheme environment; • development of a beneficiary registry to facilitate the collection of data; • the development of an alternative benefit framework; • an evaluation of the adequacy of the current solvency framework; • enhancing the effectiveness Council and its committees; • improving the visibility and reach of CMS brand • development of information technology (IT) information systems and knowledge management to improve efficiencies in the organisation; • continuous improvement of CMS as Employer of Choice; and • adequate and sustainable funding of the operations of CMS.

12. ORGANOGRAM

13. REGISTRAR & CEO’S OFFICE

14. CEO’S OFFICE Sub Programme 1.1

15. CFO’S OFFICE Sub Programme 1.2

16. INFORMATION & COMMUNICATION TECHNOLOGY Sub Programme 1.3

17. HUMAN RESOURCES Sub Programme 1.4

18. STRATEGY OFFICEProgramme 2

19. CLINICAL UNIT Sub Programme 2

20. ACCREDITATIONProgramme 3

21. RESEARCH & MONITORINGProgramme 4

22. STAKEHOLDER RELATIONSProgramme 5

23. COMPLIANCE & INVESTIGATIONSProgramme 6

24. BENEFITS MANAGEMENTProgramme 7

25. LEGAL SERVICESProgramme 8

26. FINANCIAL SUPERVISIONProgramme 9

27. COMPLAINTS ADJUDICATIONProgramme 10

28. STRATEGIC PLAN

29. OVERVIEW OF STRATEGIC PLAN Ms Tebogo Maziya GM: Financial Supervision

30. SP PROCESS • The strategic plan 2015 to 2020 was developed taking into account the vision of the National Department of Health as our Executive Authority. • Management held a workshop to identify key strategic matters which have been elaborated in this document. A consultation was also held with Council in the form of the Chairperson who further identified strategic matters which were incorporated in this strategic document. • A strategic planning session was held together with Council and Management on 21 and 22 August 2014 and 29 October 2014, which culminated in the strategic plan as presented. • First draft submitted to Executive Authority 30 November 2014, with proposed levy • Final draft submitted January 2015 • Based on National Treasury template, PI audited

31. SITUATIONAL ANALYSIS • Private healthcare system is complex • Policy intervention required to enhance where system is doing well, and minimise failures in the market

32. SITUATIONAL ANALYSIS • Continued focus on member protection • Challenges to PMB regulations • Open enrolment • Cost: Absent health price determination framework • Increasingly larger portion of benefits go towards PMBs • GAP cover drives up professional fees • Income • Tax credit system in place • The problem of affordability of medical schemes is considered to be the greatest obstacle to growth in the industry

33. SITUATIONAL ANALYSIS • Governance in medical schemes • Assessment of the value proposition of managed care interventions

34. TREND ANALYSIS ANALYSIS OF PERFORMANCE OF MEDICAL SCHEMES

35. MEDICAL SCHEMES AND CMS FINANCIAL YEARS • Financial year of medical schemes from 01 January to 31 December • Required to submit their audited financial statements four months after year end i.e. 30 April of each year • CMS year end 31 March of every year as per PFMA • CMS Schedule 3A entity – financial cycle from 01 April to 31 March

36. CONTEXT OF FINANCIAL DATA • Graphs below relate to performance of medical schemes NOT CMS • CMS has oversight function over medical schemes • Latest audited financial information available is 2013 – always a 1 year lag.

37. REGULATED INDUSTRY • Gross contributions – R130 bn • Gross claims – R113 bn • Net assets – R43 bn

38. NUMBER OF SCHEMES AND BENEFICIARIES

39. AVERAGE AGE OF BENEFICIARIES

40. MONIES SPENT BY SCHEMES (RISK POOL)

41. TOTAL HEALTHCARE EXPENDITURE Hospitals + Medical Specialists + Medicines = 75.8%

42. TOTAL HEALTHCARE BENEFITS PAID (2013)

43. NON HEALTHCARE EXPENDITURE : 2013 PRICES

44. SOLVENCY

45. STRATEGIC OBJECTIVES

46. STRATEGIC OBJECTIVES Mr Daniel Lehutjo CFO, Acting CEO & Registrar

47. STRATEGIC OBJECTIVES • Programme 1: Administration - Sub programme 1.1 : CEO and Registrar Purpose: The CEO is the accounting officer exercising overall control over the office of the Council for Medical schemes, and as Registrar, exercises legislated powers to regulate medical schemes, administrators, brokers, and managed care organisations Strategic Objectives: Provision of strategic leadership to the organisation and effective regulation of the industry

48. STRATEGIC OBJECTIVES • Programme 1: Administration - Sub programme 1.2 : Office of the CFO Purpose: The purpose of the sub-programme is to serve all business units in CMS, the senior management team and Council by maintaining an efficient, effective and transparent system of financial, performance and risk management that complies with the applicable legislation. The Internal Finance unit also serves the Audit and Risk Committee, Internal Auditors, National Department of Health, National Treasury and Auditor-General by making available to them information and reports that allow them to carry out their statutory responsibilities Strategic Objectives: 1. An effective, efficient and transparent financial management system 2. Risk management 3. Planning and Budgeting

49. STRATEGIC OBJECTIVES • Programme 1: Administration - Sub programme 1.3: ICT & KM Purpose: The purpose of the sub-programme is to serve the CMS business units by providing technology enablers and making information available to stakeholders Strategic Objectives: 1. ICT Operations & Infrastructure 2. Software Development & Maintenance 3. Knowledge and Records Management

50. STRATEGIC OBJECTIVES • Programme 1: Administration - Sub programme 1.4 : Human Resources Management Unit Purpose: The purpose of the sub-programme is to provide high quality service to internal and external customers by assessing their needs and proactively addressing those needs through developing, delivering, and continuously improving human resources programs that promote and support Council’s vision. Strategic Objectives: 1. Recruitment and Talent Management 2. Performance is maximised