Perceptions of Health Insurers Towards Pay-For-Performance as a Cost Control Model for Hospital Services

Hospital costs are the most significant portion of health-related costs incurred by non-profit health insurers registered as medical schemes in South Africa. Medical schemes continue to use retrospective reimbursement models for hospitals despite general acknowledgment that these models do not limit hospital costs and utilization. Although medical schemes are interested in implementing alternative reimbursement models, such as pay-for-performance (P4P), they are uncertain about which P4P models they can use to reduce hospital costs, resulting in their inability to make critical changes to their costs from traditional fee-for-service models. This qualitative exploratory multiple case study used 17 open-ended case interviews to explore the perceptions of seven South African medical schemes regarding P4P as a cost-control model. The participants confirmed they were not satisfied with how their current reimbursement models control hospital costs and outcomes. They perceived P4P could result in better cost-control and better-quality outcomes. The participants acknowledged P4P is a complex model with significant implementation barriers, and they were also concerned that hospitals could manipulate the model to their benefit. The participants described the enabling factors that could facilitate their selection of P4P as a cost-control model. The participants recommended a patient-centric P4P model that encompasses five broad principles: (1) Paying for measured outcomes, (2) paying specialists for the coordination of care, (3) rewarding hospitals for excellence by directing patient volumes, (4) measuring patient-reported outcomes, and (5) relegating the hospital’s role to that of a supplier rather than a coordinator of care. The study provided a recommended framework that may assist medical schemes in selecting and implementing P4P models

An assessment of the impact of climate change on the risks, returns and opportunities of selected South African companies

The risk of climate change has gained prominence globally and also in South Africa. Companies operating in developing countries such as South Africa are perceived to be particularly vulnerable to climate change. There have been mixed reactions to this risk by companies ranging from inaction to significant financial outlays expended on mitigating this risk. Whilst climate change is potentially a downside risk to financial performance, certain companies have identified opportunities to enhance their returns in the course of adapting to climate change. This study assessed whether there is a relationship between climate change and the financial performance, as manifested in the mitigation of risks and exploitation of opportunities of selected South African companies. The study sought to establish the extent to which climate change creates relevant and material risks, returns and opportunities for companies. The study was conducted using a combination of a literature review and empirical research in the form of secondary analysis. Data on climate-change performance, risks and opportunities was compared to data on financial indicators. The population of companies selected for the empirical research consisted of the Johannesburg Stock Exchange-listed companies that had publicly disclosed information to the Carbon Disclosure Project (CDP) in 2012. Climate-change data was categorised to differentiate between varying levels of climate-change performance, and the identified categories were compared to a range of ratios that demonstrated financial return. The research concluded that climate-change risks and opportunities are expected to have a significant and highly likely impact on company operations, revenue and expenditure. Positive and statistically significant correlations were identified between climate-change performance and equity analyst recommendations, historical internal rates of return, market values to book values, forecasted earnings per share, beta coefficients, and return on equity. Climate-change performance was not found to have a significant effect on the cost of capital.Management AccountingM. Com. (Accounting