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SA health model could save USA $75bn in healthcare costs

Sun, 27 Jun 2010 18:13

South African company Healthbridge has been approached by United States companies for advice on how to cut costs. Healthbridge which save private healthcare companies R1bn in South Africa last year says their electronic payment and information systems could save the US at least US$75bn a year (around R700m).

Luis da Silva, managing director of Healthbridge says the South African developed technology is among the most advanced in the world – “surprisingly the US lags behind and with new healthcare legislation in that country there is a need for companies to rapidly introduce cost saving methods that also improve healthcare. Our technological advances in private health care administration could remove up to five percent off US health costs every year.”

Healthbridge which is a finalist in this week’s National Business Awards say that these savings can be achieved in South Africa’s public sector. But here, despite significant health care debt with hospitals owed hundreds of millions of rands, government has been slow to accept help even when offered free by Healthbridge.

Da Silva noted: “The US has lagged with the conveyance of electronic medical payments and information. It is self-evident that the more that is done by hand the slower the task and the higher the risk of error.” The New England Journal of Medicine has observed: “Greater efforts at the evaluation of technology in managing practices can improve the quality of patient care, avoid waste and promote the more rational use of health resources.”

He said that a decade ago in South Africa it took 69 days for a doctor to be paid because payments relied on medical staff to record accounts by hand or computer, then mail them and wait. “Now, because of technological innovation from Healthbridge, doctors get paid within 11 days of seeing a patient.

“In 2001, the cost of administration was 17% of the total cost of healthcare in South Africa and claims were 35% electronic with none in real time. Today, South Africa processes more than 90% of private claims electronically with half in real time. In the USA, 50% of claims received by medical aids are on paper and sent by post or couriered which significantly slows down processing and payment times.”

Da Silva said: “The advantages of electronic administration move beyond claims submission; we send a daily sms to medical practices telling them how much their practice earned that day and alerting them to potential bad debt. Patients can pay medical aid shortfalls by cash, online or sms.

“In 2009, electronic settlements and movement of information meant R1bn in savings to the private healthcare sector from our company alone (we represent 60% of doctors, all hospitals, most pathologists and radiologists). Savings from additional electronic services and other companies meant savings were close to five percent of an annual R66bn private healthcare bill.

“We believe that if the US implemented the same techniques, the savings would be greater, around 10% of healthcare costs a year or a staggering US$75bn. MD On-Line CEO Bill Bartzak, who spoke at November's World Health Care Innovation and Technology Congress in Alexandria, Virginia, estimated savings of $86bn.”

For the new US healthcare legislation to be effective it will require a mini-revolution in relatively old-fashioned administrative techniques in US healthcare. Few countries are as well-equipped to quickly harness the technology that can effect radical change.

Da Silva said Healthbridge technology could also assist medical practices to monitor and implement preventative measures to improve patient healthcare. “To not invest in prevention in health care is a little like expecting a soccer team to win the World Cup without ever practising.”

He noted that “In South Africa we have inequity in medical care but it is hard to find a nation aside from a cherished few in Europe that does not.”

According to South Africa’s Who Owns Whom report in 2009, “the private sector spends about R66bn to service about seven million people. The rest of the population, approximately 38 million depends on R59bn - the total public sector health budget in 2007 which constitutes 11.08% of government expenses.

“In the United Kingdom, government expenditure on the National Health Service is about 7.8% of GDP. (It) accounts for 85% of healthcare and the remaining 15% is accounted for by private health insurance.”

Da Silva said: “The challenge is to provide good care cost-effectively. The US health care sector has been scouting best case examples globally for some time; we have been invited to discussions with many. We recommend more partnerships between private and public healthcare sectors – especially in a developing nation like South Afica. It is the only way the challenges of a rapidly aging world, filled with many new dread diseases can be met.”

FOR FURTHER COMMENT CONTACT: Luis da Silva, managing director, Healthbridge 082 330 8087 or 011 581 1214 (landline number before 9am) www.healthbridge.co.za Issued by Charlene Smith Communications Pty Ltd, call 011 646 7637