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Healthcare industry reforms

Johannesburg, 29 Mar 2004

One of the most far-reaching proposed reforms to SA`s healthcare environment is the introduction of a social health insurance scheme for the country. This scheme will ultimately make medical aid membership compulsory for all people in formal employment and will bring a large number of state employees into the medical insurance system.

Other reforms include the empowerment of public sector hospitals, a system of risk equalisation between medical schemes, a set of prescribed minimum benefits that must be provided to all medical scheme members, a rationalisation of medicine prices and the regulation of access to medical services through certificates of need to dispense medicines and operate a healthcare practice.

Regulatory pressures are mounting on the entire industry to lower costs and improve efficiencies. The competitiveness of medical schemes will increasingly become a matter of service levels and cost-efficiency. Management of financial and clinical risk will be key to the success of a medical scheme, and information technology is increasingly recognised as a vital tool for identification, management and control of business exposure. Comprehensive national data on disease patterns and health will facilitate macro economic planning and policy-making, thus allowing more effective management of national healthcare matters.

SA is not alone in coming to terms with the complexities of dealing with national healthcare matters. George Halverson, CEO of the Kaiser Foundation Health Plan in the US, says: "The US healthcare system, beset by increasing costs and quality lapses, cannot be fixed without a system-wide commitment to healthcare informatics. In an information-dependent profession, there is a lack of necessary information and simply sometimes a dysfunctional, illegible record-keeping system."

At the World Healthcare Congress in Washington in January this year, Herbert Pardes, president of the New York Presbyterian Hospital, said: "There needs to be a national effort to set standards and establish the financial foundation for a national, interconnected medical system."

In the UK, the National Healthcare System (NHS) is currently awarding tenders for centralised electronic medical/patient records. The future of the NHS is inextricably linked to successful deployment of information technology and connectivity between all players in the system.

SA likewise needs to implement leading technologies in healthcare management if we aim to successfully launch meaningful policies. Worldwide, a realisation is growing that electronic health records is an indispensable part of the solution, and a number of countries have set targets to implement national or regional data repositories within the foreseeable future. SA has not stayed behind in these developments, although there is not yet a formal national movement to support such repositories. A number of technology solutions that encompass electronic medical records have been developed and is already in use at several leading medical practices and hospitals.

Electronic medical records (EMR), sometimes also referred to as electronic patient records (EPR), fulfil the function of recording and tracking a patient`s medical history, replacing paper-based filing systems. EMR include images such as X-rays and medication history, allowing the practitioner easy access to all the relevant information pertaining to the patient, regardless of physical location of the records. In instances where the care provider is expected to assume financial risk, such as with capitation plans, it would allow the practitioner instant access to the patient`s history. A significant benefit of electronic records is that they can be efficiently stored, thus overcoming the limitations of paper-based systems. Additionally, because data are electronically captured and stored, ambiguity is averted and no misinterpretations relating to illegible notes can arise.

There is growing and alarming evidence that a lack of clinical history and misinterpretation of written notes are causes of a significant proportion of in-hospital patient fatalities. This fact alone is creating an international groundswell of support for the more pervasive use of information technology in healthcare, and specifically for EMR.

Most modern EMR systems rely on codified data, because only then is data analysis possible. For example, an EMR should incorporate the healthcare industry-standard ICD10 coding system for diagnosis of disease. These codes are important elements of tracking clinical history, for ensuring that care prescribed is fitting for the condition diagnosed, and that proactive steps can be taken in the treatment of chronic illness.

Connectivity between the players in the healthcare arena is another important aspect of healthcare informatics. Claim transaction processing through electronic data interchange (EDI) and other means is not a new concept, however, the availability of real-time data processing, as opposed to batch technology, between care givers and funders can play a major role in the control of costs and the management of risk.

For most doctors, being able to uniquely identify the patient and receiving confirmation of available benefits will take care of a large portion of their business risk. If facilities such as pre-authorisation for treatment, requests for auxiliary clinical services (eg pathology tests) and referrals are also available electronically, the benefits would be tremendous.

To realise these benefits requires a concerted effort to move the industry from a paper-based (and labour-intensive) claims handling system to electronic transaction processing, and then from batch to real-time. Batch processing may be likened to the sending of a registered mail item from one party to another, while real-time processing is likened to a direct telephone conversation between two parties.

Real-time processing offers substantial benefits to medical funders and service providers alike, among these being: faster claims processing; improved cash flows; reduced call-centre pressure; more accurate claims handling with little or no human intervention; less workload on claims processing staff with each claim only being handled once; and immediate assessment of patient eligibility for services rendered. Real-time claims processing ensures that schemes can identify risk, and can plan and manage the elements of risk arising out of a medical incident, for example being able to identify the number or types of treatments required, and to assess the costs to be incurred to effect the treatment.

Information technology will be a key enabler for a social healthcare system where effective cost-control and risk management are imperative. For the caregiver, quick access to patient information (clinical and financial) is already a critical success factor. For the funder of healthcare, the ability to assess risk, trends and patterns will determine their survival in what is becoming a much more competitive business environment. For the state, national health data holds the key to effective planning and management of their responsibility to citizens.

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Alan Baronet
DHSwitch
(011) 265 5400