HAAD seeks to shift focus of care with revised tariff

HAAD seeks to shift focus of care with revised tariff

The current “over-utilization” of in-patient beds and “excessive” lab tests at hospitals will soon come to an end, following the implementation of the new mandatory tariff (MT) list, effective from October 15.


Olivia Olarte-Ulherr

Published: Fri 17 Aug 2012, 8:26 AM

Last updated: Tue 7 Apr 2015, 1:42 PM

According to Health Authority – Abu Dhabi (HAAD) officials, the highest proportion of hospital revenue comes from in-patient beds and laboratory investigations.

“Our observation and studies have shown that there is over-utilisation of in-patient beds for conditions that could be otherwise treated as outpatient. One of the reasons that we have flagged is the reimbursement which was not appealing enough to service providers to treat those patients in outpatient setting,” said Mahmoud Ramadan AbuRaddaha, head of Government Prices and Product Benefits at the HAAD.

Similarly, laboratory investigations represent a quarter of the overall cost of the healthcare system, very close to doctor visits that are almost 32 per cent.

“Compare that percentage internationally, that’s outrageous, it’s too high. We don’t need to have that level of laboratory investigation. The previous healthcare system is paying almost as much to the lab tests as that to the physicians,” AbuRaddaha pointed out.

In order to balance the system, the HAAD’s new price list has improved the overall rate structure by increasing the cost of certain services and decreasing where appropriate.

AbuRaddaha said there are currently 209 excessively overpaid services and 116 underpaid services.

The updated prices are based on the actual cost paid to health providers for their medical services under the basic product, which also determines the accepted floor and ceiling of the reimbursement rates for the Thiqa and enhanced products.

The MT was computed using the Relative Value Unit (RVU) for medicare, which is considered the most equitable and appropriate reference for the calculation of prices.

According to AbuRaddaha, “the redistribution of the total cost of various healthcare services will achieve the desired objectives without causing inflation in the total price of healthcare services in the emirate.”

Although he admitted that the new price list may result in increased insurance premiums, the HAAD does not expect any direct financial impact on insured members.

Under the revised tariff, reimbursements for day-care services (admission of 12 hours for a simple procedure) will increase by 22 per cent, doctor visits by 24.6 per cent and other medical services by 0.05 per cent

Laboratory services, meanwhile, will drop by 24.2 per cent, surgeries by 14.9 per cent and radiology by 0.7 per cent.

“The true impact will be on the laboratory where we have reduced (prices) by 24.2 per cent and added 24.6 per cent on the doctor visit or fees,” noted AbuRaddaha.

With these changes, doctor visits are expected to reach nearly 40 per cent (from 32 per cent) while lab tests will drop to 18 per cent (from 24 per cent) — a significant amount of money shifting from investigation/laboratory to physician.

“The changes we have introduced in the system need to have more investment on the physician, the service offered by humans and individuals who truly manage and care. And the tools, which include the investigation (lab test), to be at the acceptable percentage,” explained AbuRaddaha.

As for the hospitals, the total financial impact would range between a decrease of seven per cent and an increase of 12 per cent — a minimal effect compared to just a few making “excessive profit”.

“In reality, the normal mix in the emirate is 80 per cent professional/physician services and 20 per cent laboratory. If any facility is around that expected split, they automatically gain between 15-20 per cent in their overall revenue,” noted AbuRaddaha.

And for the long-term impact, Sultan Al Dhaheri, Director of the Health System Financing at the HAAD, said that by levelling the playing field, health providers will be looking at financial incentives, which for the sector means more medical services, improved quality and efficiency in the future.

“The whole market will actually shift and the utilisation will change,” Al Dhaheri stressed.


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