SAHR 2007 - Health Systems Trust

Medical Schemes 4
Figure 7: Age profiles in medical schemes, 2000 to 2006
10
9
8
Percentage of beneficiaries
7
6
5
4
3
2
Data only
to 75+
1
0
Under 1
1-4
5-9
10-14
15-19
20-24
25-29
30-34
35-39
40-44
Age group
45-49
50-54
55-59
60-64
65-69
70-74
75-79
80-84
85+
REF June 2006 cleaned
SR Sep 2005 cleaned
SR 2002 cleaned
SR 2000 cleaned
Source: Derived using Statutory Return data to 2005 and REF Grid data in 2006
Improved management of chronic disease
Chronic disease benefits in terms of the CDL legislation are
inclusive of diagnosis, medical management and medicine
costs. Prior to the introduction of the CDL, benefit design and
managed care tended to focus on chronic medicine only
and did not take an integrated approach.
The inclusion of the CDL in PMBs limited the extent to which
schemes could use financial limits to manage benefits. As
a consequence, other means of rationing benefits such as
drug formularies and reference pricing have increased in
importance. Formularies are often used to encourage the
use of generic products. By contrast, the application of reference
pricing requires that drugs be categorised into therapeutic
classes, with a reference drug selected in each class.
The maximum price to be reimbursed is then set based on
this reference drug, with the consumer having to pay the
difference in price if a more expensive drug is used. Cost
savings depend both on how broad the therapeutic classes
are and on the selection of the reference drug in each class.
One of the aims of reference pricing is to have manufacturers
compete to be the reference product and thereby
A drug formulary is a list of reimbursable drugs and has the effect of
limiting coverage to those drugs.
drive prices down. 39
Generic utilisation has increased significantly in South African
medical schemes. The Mediscor reports indicate that the
proportion of generic items claimed increased from 27.7%
in 2002 to 43.7% in 2005. 32,33,34,40 A number of possible
reasons are provided for the increase in generic utilisation,
including the introduction of more generic alternatives to the
South African market, the role of reference pricing and formularies
in promoting the use of generics and greater awareness
of generic products amongst consumers. Pharmacists
are now required to substitute generic products (where
cheaper), unless the prescribing practitioner has specified
otherwise. The Mediscor Medicine Review reflects substantially
lower average expenditure per item for generics than
for branded products (including those with valid patents and
those with expired patents) with price differences averaging
63% in 2005. Even where generic equivalents are not available
the use of drug formularies can decrease the utilisation
of particular drugs if they are excluded from the formulary
and increase the utilisation of others that are included. For
example, the utilisation of Lipitor declined significantly from
2003 to 2004, whilst the utilisation of therapeutic equivalents
increased.
65