Actuarial Society 2017 Convention 17-18 October 2017
Understanding maternity costs in the South African
private healthcare sector: Where we are, how we got here and a case study of a possible solution
Presented by: Matan Abraham
Co-author: Tiffany Elliott
Actuarial Society 2017 Convention 17-18 October 2017
Some context…
Rising healthcare costs are well documented in the South African
private sector. Solutions are needed that are targeted at both a
system level and a category level.
2
The focus of this research concerns the decision-making during
pregnancy and birth.
Second-order effects also need to be considered, examples
specific to maternity costs are:
• Quality of care
• Indemnity cover
Actuarial Society 2017 Convention 17-18 October 2017
Public sector births
Number of births ‘15/’16
C-section rate ‘15/’16
UPFS Fee (April 2017)
Natural birth
C-Section
Infant mortality rate
Maternal Mortality rate
R3 932 – R4 577
R6 190 – R7 204
901 642
26,2%Source:
- Betran, A. P., Torloni, M. R., Zhang, J. J.,
& Gülmezoglu, A. M. (2016). WHO
Statement on caesarean section
rates. BJOG: - An International Journal
of Obstetrics & Gynaecology, 123(5),
667-670.
- Massyn N, Peer N, English R, Padarath
A, Barron P, Day C, editors. District
Health Barometer 2015/16. Durban:
Health Systems Trust; 2016
- Approved UPFS 2017 Fee Schedule for
Full Paying Patients
- Day, C., & Gray, A. (2016). Health and
related indicators. South African
health review, 2016(1), 243-348.
16.5 – 42.8 per 1000
(31.3)
119.1 per 100 000
Actuarial Society 2017 Convention 17-18 October 2017
Private sector births – specialist costs
Year Base DRGAvg. OBGYN
claimed amount
2015Vaginal Delivery R4 172
Caesarean Delivery R6 098
2016Vaginal Delivery R4 651
Caesarean Delivery R6 956
2017Vaginal Delivery R4 837
Caesarean Delivery R7 220
Specialist costs are
not the main
component of the
cost of births.
~R2k Specialist cost
differential
Data source: select schemes from Insight data universe –amounting to approx. 83k births of a two and half year period.
Actuarial Society 2017 Convention 17-18 October 2017
Private sector births – Hospital costs
R16 152
R26 170
R17 043
R27 764
R16 724
R28 566
28%
72%
30%
70%
31%
69%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
R-
R5 000
R10 000
R15 000
R20 000
R25 000
R30 000
VaginalDelivery
CaesareanDelivery
VaginalDelivery
CaesareanDelivery
VaginalDelivery
CaesareanDelivery
2015 2016 2017
Average cost per case % of pregnancy admissions
~70% C-section
rate
~R10k Hospital cost
differential
Actuarial Society 2017 Convention 17-18 October 2017
Variation due to complications
R16 406
R20 610
R29 683
R27 123 R28 475
R45 491
R-
R5 000
R10 000
R15 000
R20 000
R25 000
R30 000
R35 000
R40 000
R45 000
R50 000
W/O CC W CC W MCC W/O CC W CC W MCC
Vaginal Delivery Caesarean Delivery
Distribution of hospital costs by DRG severity
2015 2016 2017
Actuarial Society 2017 Convention 17-18 October 2017
Risk adjustment
Risk-adjustment needed to fully understand this variation
Missing data
about the child need
to augment this:
• Gestation age,
• Birth weights,
• APGAR scores
DRG is successful at
allowing for factors relating
to the mother such as:
• Co-morbidities (e.g.
infections)
• Chronic status,
• Geriatric mothers
Only available in pockets –
not system wide
Actuarial Society 2017 Convention 17-18 October 2017
C-sections vs NVDs
Where does the higher hospital costs come from?
Additional
theatre
time
ALOS 1,82 2,86
0.5 1 2 3 4 5 6 7
0%
10%
20%
30%
40%
50%
60%
70%
Distribution of length of stays (2016)
Vaginal Delivery C-Section
Actuarial Society 2017 Convention 17-18 October 2017
C-Sections
Why are they so popular?
• Consensus – Uncomplicated NVD
the ideal but…
• Control
• Specialist costs not a time-based fee
• Convenience
• Patient entitlement
Actuarial Society 2017 Convention 17-18 October 2017
Indemnity cover
Inconsistent way maternity care is practiced
Deviation from standard protocols
Poorly documented treatment decisions
R850 000 (2017 indemnity insurance cost for the year)
Source: www.cover.co.za/medical-indeminity-sa-doctors/
Actuarial Society 2017 Convention 17-18 October 2017
The birthing teamEnd-to-end maternity episode care
HospitalJV
MaternityPtyLtd
Customised Care
plan for each patient
=
Standard set of
risk assessments
→
Delivered by a JV team
Covering a total episode of care (includes scans, bloods visits, birth etc.)
Antenatal Delivery Postnatal
Birth<20 weeks ≥20 weeks ≤ 6 weeks
Actuarial Society 2017 Convention 17-18 October 2017
The birthing teamA patient’s journey
www.pposerve.co.za
