SPECIAL REPORT | Alternative Reimbursement Models

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Alternative Reimbursement Models

4.4.1. Spread of admission costs Figure 8: COVID-19 admissions by cost per admission after trimming 1400

Number of admissions

1200 1000 800 600 400 200

R176000 - R180000

R168000 - R172000

R160000 - R164000

R152000 - R156000

R144000 - R148000

R136000 - R140000

R128000 - R132000

R120000 - R124000

R112000 - R116000

R104000 - R108000

R96000 - R100000

R88000 - R92000

R80000 - R84000

R72000 - R76000

R64000 - R68000

R56000 - R60000

R48000 - R52000

R40000 - R44000

R32000 - R36000

R24000 - R28000

R16000 - R20000

R8000 - R12000

R0 - R4000

0

Cost per admission

The graph above shows that there was a very wide spread in the cost of COVID-19 admissions, with a large tail of more expensive admissions, even after applying the trimming. The distribution above appears to indicate that a relatively large volume of admissions occurred at between R10 000 and R30 000. However, the overall average cost per admission was approximately R52 700 due to a relatively large number of expensive admissions. The median cost per admission was approximately R39 800.

Board of Healthcare Funders Industry Technical Advisory Committee

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SPECIAL REPORT | Alternative Reimbursement Models

Published on Jun 7, 2021

Board Of Healthcare Funders

SPECIAL REPORT | Developing Alternative Reimbursement Models for Hospital Admissions related to COVID-19 This project is a collaborative effort between the Board of Healthcare Funders (BHF) and the Industry Technical Advisory Committee (ITAC). It commenced as a response to the ongoing impact of the COVID-19 pandemic in South Africa and in particular its management from a health financing perspective. The BHF was tasked with developing an alternative reimbursement model (ARM) for COVID-19 hospital admissions to assist member schemes with the management of the risk associated with COVID-19 claims – this report focuses exclusively on hospital costs. The BHF invited the industry to participate in a task group for this purpose.

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SPECIAL REPORT | Alternative Reimbursement Models

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9.3. ANNEXURE 3: Model Construction

9.2. ANNEXURE 2: Data Specification

Figure 17: Model result: Total benefit paid by hospital group and age

8. References

5.2. Risk-adjusted total benefits paid

5.3. Risk-adjusted average cost per day

Figure 9: COVID-19 admissions by age and gender after trimming data

Table 1: ITAC team members

1. Introduction