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CMS Annual Report 2010-2011

CMS Annual Report 2010-2011. Dr Monwabisi Gantsho Registrar & Chief Executive 26 October 2011 Parliament, Cape Town. welcome. Outline of presentation. Legislated mandate of the Council for Medical Schemes (CMS) Highlights for the CMS in 2010-2011

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CMS Annual Report 2010-2011

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  1. CMS Annual Report 2010-2011 Dr Monwabisi Gantsho Registrar & Chief Executive 26 October 2011 Parliament, Cape Town

  2. welcome

  3. Outline of presentation • Legislated mandate of the Council for Medical Schemes (CMS) • Highlights for the CMS in 2010-2011 • Financial year 1 April 2010 to 31 March 2011 • Dr Gantsho joins the CMS on 1 June 2010 • Overview of medical schemes industry 2010 • Financial year 1 January-31 December 2010

  4. 1. Our legislated mandate • Medical Schemes Act 131 of 1998 • Governs us and industry • Medical schemes • Administrators • Managed care organisations (MCOs) • Healthcare brokers and broker organisations • Heart of the Act: protecting medical scheme beneficiaries and regulating schemes • CMS is a Statutory Regulator as opposed to self-, co-, and independent regulator • As we become effective we are constantly being accused of “abuse of power”

  5. How the Act protects members • Promote non-discriminatory access to privately funded healthcare through: • Open enrolment • Community rating • Guaranteed benefits (prescribed minimum benefits/PMBs) • Promote financial stability and sustainability • Encourage member’s active participation in scheme affairs • Investigate and resolve complaints as per Act

  6. Our revised strategic goals • Goal 1: Access to good quality medical scheme cover is maximised • Goal 2: Medical schemes and other regulated entities 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 with the benefit of regional and international experiences.

  7. 2. Highlights for CMS in 2010-2011 • Revised strategy • Mandate has not changed • NHI Green Paper: schemes will continue to exist side by side NHI although their role may change • Better performance information reporting • 4 strategic goals instead of 7 starting this year • Alignment with Consumer Protection Act (MoU with Consumer Commissioner) • 11th clean audit in a row (since inception). • We need your support in facilitating concurrence between MoH and MoF to approve 2012/13 budget

  8. Our Annual Financial Statements • Clean audit by AG • Robust internal controls • Competent Audit & Risk Committee which oversees the role of the internal auditors  • CMS has passed the readiness test of AG in terms of the Performance Information report • Revenue- Levies, Broker Fees ,etc • Major Expenditure Items • Rental • Telecommunication Expenses

  9. Our Annual Financial Statements cont.. • Audit Fees • Consumer Education • HR/Organisational Strategy • Investigation Costs • Legal Fees • Media and Promotion • Strategic planning costs • Trustee Training • Staff Costs

  10. CMS expenditure 2010 / 11

  11. CMS expenditure 2010/100

  12. 3. Overview of industry 2010 Strategic overview: • National Health Insurance (NHI) system • Governance • Health costs • Prescribed minimum benefits (PMBs) • Complaints resolution Industry overview: • Non-financial information • Financial information

  13. NHI system • Council has always supported and continues to support strategic reform of the entire health system • Sect 7 of the Act: Advise the Minister • Support the DG of DoH • Assistance to HPC researcher: Contribute to health economics and policy research • A task team is exploring the NHI Green Paper to formulate a view on it by 31 December • Green Paper recognises continued existence of medical schemes although their role may change • There is recognition that medical schemes further advance health systems and access to quality healthcare in SA

  14. Governance • There are provisions in Medical Schemes Act • Boards are removed & curators are appointed • Schemes can be put under liquidation or deregistered (Section 27) • Currently formulating a view on scope of applicability of King III to medical schemes; guidelines will be published in 2011-2012

  15. Health costs • CMS monitors health costs; they are rising • Supply-side regulation is required: • CMS assists in curbing possible perverse behavior • Monitoring and reporting on private hosp costs • Price negotiations between schemes and providers should take place

  16. PMBs • Prescribed Minimum Benefits: 1 pillar of MSA • Guaranteed by the Medical Schemes Act • Regulation 8: schemes must pay for PMBs in full (at cost). Awaiting judgment by end Oct. • Must be covered from risk pool, not savings • Serious & life-threatening diseases/conditions • 270 PMB diseases/conditions; 25 chronic disease list and any emergency condition

  17. Resolving complaints • In 2010-2011 we received 5 617 complaints • Almost 1 000 more than in last financial year • Of those, 5 351 complaints were resolved • Of those, 4 734 were valid complaints and 617 were enquiries • 3 480 complaints were resolved within 120 days

  18. Top 10 types of complaints New CMS Sharecall hotline 0861 123 267

  19. How to complain • Speak with your scheme first • Contact the CMS if no resolution • complaints@medicalschemes.com • 0861 123 267 (Sharecall hotline / consultants)

  20. Thulani Matsebula Head: Research & Monitoring Non-financial information

  21. Schemes and beneficiaries

  22. Schemes and beneficiaries cont. • Fewer medical schemes • No negative effect on number of beneficiaries • Consolidation through amalgamations (mergers) and liquidations • Number of smaller schemes declining faster • Restricted schemes folding into larger schemes • Consolidation trend continues • 99 medical schemes currently

  23. Benefit options

  24. Age of beneficiaries

  25. Age of beneficiaries cont. • Open schemes are getting older • Restricted schemes are getting younger (impact of GEMS) • Implications for beneficiaries in other schemes • Implications for industry

  26. % of total benefits paid ( 09 vs. 10 FY)

  27. Total healthcare benefits paid pbpm

  28. Utilisation of services

  29. Utilisation of private hospitals

  30. Benefits paid Amount (R) % changes GPs 6,2 (5,7) 9,0 (8,4) Meds specialists 18,8 (16,7) 12,2 (19,1) Medicines 14,0 (13,3) 5,6 (18,6) Hospitals 31,1 (28,3) 10,0 (18,1) Figures in parenthesis are prior year figures

  31. FINANCIAL INFORMATION Tebogo Maziya Head: Financial Supervision

  32. Contributions and claims Total • Contributions increased by 13.7% to R96.5 billion (R84.9 billion) • Relevant healthcare expenditure increased by 11.0% to R84.7 billion (R76.3 billion) Risk • Contributions increased by 13.7% to R87.7 billion (R77.1 billion) • Relevant healthcare expenditure incurred increased by 11.2% to R76.6 billion (R68.9 billion) Savings • Medical savings accounts contributions increased by 13.2% to R8.7 billion (R7.7 billion) • Medical savings accounts claims increased by 12.0% to R8.3 billion (R7.4 billion) Figures in brackets depicts 2009 figures

  33. Contributions and claims(pabpm) Total • Contributions increased by 9.6% to R975.3 (R890.0) • Relevant healthcare expenditure increased by 7.3% to R858.4 (R800.2) Risk • Contributions increased by 9.6% to R886.9 (R808.9) • Relevant healthcare expenditure incurred increased by 7.2% to R774.6 (R722.5) Savings • Medical savings accounts contributions increased by 4.9% to R110.8 (R105.7) • Medical savings accounts claims decreased by 3.7% to R105.0 (R101.2) pabpm = per average beneficiary per month Figures in brackets depicts 2009 figures PABPM=per average beneficiary per month

  34. Risk claims ratio all schemes 2010 prices

  35. Cost trends pbpa: 2010 prices

  36. Non-healthcare expenditure Consists mainly of: • Gross administration expenditure (biggest component) – 67.6% • Managed healthcare: management services – 19.5% • Brokers fees – 11.4% • Impaired receivables – 1.5%

  37. Non-healthcare expenditure • Increased by 6.9% to R11.6 billion • pabpm figures increased by 3.1% • Open: increased by 4.8% to R147.1 (R140.4) • Restricted: increased by 3.5% to R74.1 (R71.6) Figures in brackets depicts 2009 figures

  38. Gross administration expenditure • Increased by 4.4% to R7.8 billion • Open schemes: increased 1.4% to R5.6 billion • Restricted schemes: increased 13.1% to R2.2 billion • GAE is main component of NHE: 67.6% • Adjusted for membership (pabpm): • Open: R96.6 (R95.5) • Restricted: R54.2 (R52.3) pabpm = per average beneficiary per month Figures in brackets depicts 2009 figures

  39. Managed healthcare: management services • Increased by 16.2% to R2.3 billion • Number of members covered: 8.2 million (3.3% increase) • 98.8% of all beneficiaries covered

  40. Broker costs • Broker costs: increased by 8.9% to R1.3 billion • On a pampm basis: • Broker fees increased by 7.7% to R44.4 (R41.2) pampm = per average member per month Figures in brackets depicts 2009 figures

  41. Broker fees and membership

  42. Net healthcare results

  43. Solvency: all schemes

  44. Overall trends

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