1. The critical role of Evolving Information Systems and the need for Standardised Coding

2. Presented by: Christo Rademan - Managing Director Agenda 1.Healthcare delivery system 2.Defining a PBM 3.Private sector: Process flow 4.Public sector: Process flow 5.Benefits 6.Implementation prerequisites 7.South African experience 8.Mediscor experience

3. Healthcare delivery system PHARMACEUTICAL MANUFACTURERS PUBLIC e.g. Government clinics and state hospitals Receive and dispense stock Tender process PRIVATE e.g. Pharmacies and Dispensing Doctors Purchase stock from wholesaler Free market process

4. Healthcare delivery system Both processes needs to ability to manage cost & dispensing International research has shown a Pharmaceutical Benefit Management (PBM) system, to be most successful tool

5. Provides a national, real-time electronic solution for claims processing, applying:  Eligibility rules  Utilisation rules  Clinical rules  Formularies  Pricing rules Provides a claims payment Provides management reports and business intelligence A PBM is a Company that manages the dispensing of medicine Defining a PBM

6. Not just an electronic submission system Management at the moment medicine is dispensed (at point of sale) Full on-line response > 100 checks per item Post-dispensing intervention / knowledge is of little value Defining a PBM

7. Pharmacy/ Dispensing Doctor Member Switch Management entity (PBM) Software vendor Reporting Provider: Private sector Claim Payment instruction Cash Funder – Private insurance or government Utilisation management Clinical management Pricing management Reference pricing Formulary Benefit management 3 seconds Standards required

8. 1.Member : Member file – 38 fields 2.Provider: Provider practice number + Product code 3.Vendor: Claim lay-out - 186 fields (USA Legislated – NCPDP) 4.Switch : Claim lay-out - 43 fields per item 5.PBM : Provider file - 68 fields : Product file - 35 fields : Authorisation file - 42 fields : Audit file - 142 fields 5.Funder : Response - 14 fields per item 6.Payment : Reconciliation file - 59 fields Current standards

9. Member Reporting Provider: Public sector Logistics: Stock information Utilisation management Clinical management Standards required Management entity (PBM) “Claim” Government clinic / hospital Stock replenishment

10. Benefits: Funder / Government Derive a 7-20% saving on medicine spend (dependent on management rules) Eliminate addiction & abuse Substantially reduce fraud (e.g. polypharmacy) SAVINGS Achieve real savings

11. Benefits: Funder / Government Ability to influence dispensing at point of service Ability to influence prescribing at point of service Fast and efficient claims process Accurate claims, processed in real-time (similar to credit card systems) Comprehensive clinical & demographic info Improved relationship with patients and providers SYSTEMS Effective claim submission system

12. Electronic claims submitted in real-time with real time response (similar to credit card systems) Interfaces with e-prescribing systems Reduced claims administration (no more paper) Improved practice management – electronic claims and remittance reconciliations Faster payment (debtors days reduced to 18) Better credit control Accurate member co-payment information Access to and control of information flow Benefits: Provider SYSTEMS Effective claim submission system

13. Benefits: Provider Appropriateness of medicines prescribed Empowers provider to consult with patient Empowers practicing pharmaceutical care Drug interactions QUALITY Improved quality of care

14. Patient experiences a Funder or Government “that is efficient and caring” Eliminates upfront payment at pharmacy Eliminates need to submit paper claims Faster re-imbursement cycles Reliable claim submission response Prevents inappropriate use of medicine (addiction, abuse & interactions) Empower provider to consult with patient Overdose prevention Benefits: Patient SUBMISSION Effective claims administration QUALITY Improved quality of care

15. Implementation requisites Essential criteria: Government or Private Health Insurer Covering at least 2 million lives Client size Primarily use western medicine Medicine type used Understand English messaging Language

16. Implementation requisites Additional criteria: Accommodating E.g. use of medicine, dispensing of medicine, capturing PI Regulatory environment Electronic processing Use of computers Sufficient telecom infrastructure Fast and reliable connection to central system Telecoms presence

17. 17 Source: Council for Medical Schemes Annual Report 2006-2007 Introduction of PBM services South African experience

18. Guarantee Savings Accuracy IT Systems Tele- communication Commercial data centres Claims switching Integrated Protocols and formulary P & T Committee Council for Medical Schemes 4 Formularies Business development and reporting PEM Analyser IBM Leverage Mediscor experience: savings

19. THANK YOU