Briefing to the Health Briefing to the Health Portfolio Committee: Portfolio Committee:

Operational Activities and Operational Activities and BudgetsBudgetsKP MatshidzeKP Matshidze

Acting CEO and RegistrarActing CEO and RegistrarCouncil for Medical SchemesCouncil for Medical Schemes

XX August 2009XX August 2009

Presentation OutlinePresentation Outline• Introduction• Legislative Mandate

– Medical Schemes Act– Functions of Council– Vision of Council– Strategic Objectives

• Accountability Structures• Composition of the Council• Office Organogram• Overview of Industry• Operational activities for 2009/10

Legislative MandateLegislative Mandate• The Council for Medical Schemes was established in terms of the Medical

Schemes Act, 131 of 1998, key policy objectives of which include to:• Protect the interest of beneficiaries

– Promote non-discriminatory access to privately funded health care through:

– Open enrolment– Community rating– Guaranteed benefits

– Promote financial stability and sustainability– Encourage active participation of members in scheme affairs– Entertain complaints from members

Other Legislative ProvisionsOther Legislative Provisions• Constitution• National Health Act• Medicines and Related Substances Act• Health Professions Act• Pharmacy Act• Nursing Act• Competitions Act

Functions of CouncilFunctions of Council• Protect the interest of the beneficiaries at all times• Control and coordinate the functioning of medical schemes in a manner that is

complementary with national health policy• Make recommendations to the Minister on the 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 provided for in this Act

• Collect and disseminate information about private healthcare• Makes rules, not inconsistent with provisions of this 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 this Act

Our VisionOur VisionTo regulate fairly and effectively in order to protect the interests of

beneficiaries, and to promote equity in access to medical schemes

Our 7 Strategic AimsOur 7 Strategic Aims Secure an appropriate level of protection for beneficiaries of medical schemes and

the public by authorizing the conduct of medical schemes business and monitoring the financial performance and soundness of schemes

Provide support and guidance to trustees and promote understanding of the medical schemes environment by trustees, beneficiaries and the public

Foster compliance with the Act by medical schemes, administrators and brokers and initiate enforcement action where required

Investigate and resolve complaints raised by beneficiaries and the public

Monitor the impact of the Act, research developments and recommend policy options to improve the regulatory environment

Foster the continued development of the CMS as an employer of choice

Develop strategic alliances nationally, regionally and internationally

CMS Accountability StructuresCMS Accountability Structures

MINISTER OF HEALTHDr Aaron Motsoaledi

COUNCIL

12 Members

ACTING CEO & REGISTRAR

Khathutshelo Patrick Matshidze

Composition of the CouncilComposition of the Council• Consists of Chairperson, Deputy Chairperson and 10 members,

appointed by the Minister of Health

• Chairperson – Prof William Pick• Deputy Chairperson – Ms Tracy Fortune

• The Council comprises a broad spectrum of highly skilled senior people which include the representative from the National Department of Health, actuaries, lawyers, medical specialists, consumer representatives and general practitioners

Committees of CouncilCommittees of Council

• Council comprises of the following committees:– EXCO– Council

• The following specialist sub-committees have been established to aid Council in the fulfillment of its complex mandate:

• Appeals• Human Resources• Audit

REF PROJECTREF PROJECTACCREDITATIONACCREDITATION

BENEFITS MANAGEMENTBENEFITS MANAGEMENT

IT & KMIT & KM

HUMAN RESOURCESHUMAN RESOURCES

RESEARCH AND MONITORINGRESEARCH AND MONITORING

COMPLIANCE AND EDUCATION & TRAININGCOMPLIANCE AND EDUCATION & TRAINING

FINANCIAL SUPERVISIONFINANCIAL SUPERVISION

LEGAL SERIVCES LEGAL SERIVCES

REGISTRAR’S OFFICEREGISTRAR’S OFFICE

ACTING CEO & REGISTRARACTING CEO & REGISTRAR

COMMUNICATIONCOMMUNICATIONPERSONAL ASSISTANTPERSONAL ASSISTANT

COMPLAINTS ADJUDICATION MANAGER COMPLAINTS ADJUDICATION MANAGER INTERNAL FINANCEINTERNAL FINANCE

Overview of the Industry Overview of the Industry (as at end 2008)(as at end 2008)

• 110 not-for-profit registered medical schemes– Open: 37– Restricted: 82

• Numerous for-profit intermediaries– Administrators - 23– Brokers – 7755– Brokerage companies - 2081– Managed care companies – 55

• 7.8. million covered lives• Annual gross contribution income: R74.0 billion• Annual gross claims incurred: R64.7 billion

Total benefits paid in real termsTotal benefits paid in real terms( 2008 prices) ( 2008 prices)

Solvency ratioSolvency ratio

10.0

13.5

17.5

22.0

25.0 25.0 25.0 25.0 25.0

20.2 20.4

22.9

29.3

37.339.1

37.9 38.036.6

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

2000 2001 2002 2003 2004 2005 2006 2007 2008

Solvency ratio (%)

Prescribed Solvency Level Industry Average All

Type of Complaints Type of Complaints Type of complaint Period

  2007-08 % of total 2008-09 % of total

Unpaid accounts 1 066 36.9 1 166 37.2

Scheme refuses to issue authorisation 231 8.0 320 10.2Limitation of benefits / PMBs / formularies / DSPs 359 12.4 291 9.3

Reversal and short-payment of accounts 102 3.5 225 7.2

Non-payment of refund 138 4.8 193 6.2

Administrative inefficiencies 189 6.5 170 5.4

Termination of membership 161 5.6 163 5.2

Misunderstanding with scheme 204 7.1 132 4.2

Exclusion of a condition and/or benefits 131 4.5 98 3.1

Unauthorised deductions 72 2.5 67 2.1

Operational Activities: 2009/10Operational Activities: 2009/101. Review and approval of contributions and benefits2. Accreditation of administrators, brokers and managed care organisations3. Assessment of trends on coverage of non PMB conditions4. Monitoring of ICD 10 implementation5. Ensure finalisation of the PMB Review process6. Ensure finalisation of Risk Equalization Fund process7. Training and education of trustees and consumers8. Ensure compliance with provisions of legislation9. Investigation and resolution of complaints10. Monitor the financial soundness of schemes11. Institutional strengthening of CMS

– IT and KM– HR– Internal Finance

Thank YouThank You