sahr2001 - Health Systems Trust

4 • Private Sector Financing
considerably. This fall has occurred in all types of schemes, even the exempted
ones, which tend to have a lower cost structure. The fall in expenditure on
medicines (-5.5%), and considerable growth in private hospital expenditure
(40.7%) in 1996/97 may be due to mis-recording of data – (expenditure
recorded under private hospitals should have been recorded under medicines).
In 1997/98 the growth rates seem more reasonable, and better data capture
may have occurred.
Table 11 examines the expenditure on medicine in more detail. Medicines
dispensed by pharmacists amounts to approximately 16% of total benefits,
whereas that dispensed by practitioners amounts to 8% - suggesting that the
policy to limit dispensing of medicines by practitioners may not have a
substantial impact on total expenditure.
Table 11: Medicine expenditure: Share of total benefit expenditure 1997-1998
All schemes: Percentage of total benefits 1997 1998
Medicine 28.7% 29.1%
Hospital medicine 4.5% 4.6%
Medicine dispensed by pharmacists 15.6% 16.7%
Medicine dispensed by practitioners 8.7% 7.9%
Total benefit expenditure 100.0% 100.0%
Source:
Registrar’s office
Impact of managed care
From this data it is possible to draw some conclusions about the impact of
managed care. Expenditure by schemes on managed care began to be recorded
separately in 1997, and increased substantially in the following year. It would
appear, however, that managed care has not led to schemes being able to
contain overall growth in expenditure. Pharmacy benefit programmes may
have had an impact on medicine expenditure in 1997, (although the fall in
expenditure may have been due to a mis-recording of data), but rose again
substantially the following year. Hospital authorisation programmes also
seem to have had no impact on expenditure.
During the period under review, a significant new feature of benefit design
was the introduction of personal medical savings accounts for day-to-day
expenses. The intention was to create the incentive for members to control
day-to-day expenditure by allowing any unused funds to be carried forward
to the next year, and removing cross-subsidisation, forcing patients to rely
on their own resources. However, growth in claims to schemes with savings
accounts grew slightly faster (15.7%) than claims to those without savings
accounts (14.9%), suggesting that there was no impact on expenditure.
Excessive expenditure on health care is not only driven by the lack of
constraints on members due to third party payor insurance, but more
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