Read the Conversation
EF: What is the role of Mediscor in the market?
CR: Our role is double-fold: on one side, we provide access, and on the other side, the management capability at the back end. We act as an intermediary between pharmacies and funders; we are the entity that decides on behalf of an insurance company whether a medicine should or should not be paid for, the extent it should be paid and from which kind of benefit it should be paid. We are the party that executes the rules, the deciding party; we have electronic interfaces with about 3,500 pharmacies and about 10,000 doctors in the whole region. It is too complicated and sophisticated for each insurance company to have an interface with the decision-making capability to provide the backbone for medicine management. We are a PBM (Pharmaceutical Benefit Management) company, and we provide the ability for a funder to manage medicine, and secondly, we provide instant access for members so they can walk into any pharmacy or any doctor without needing to pay cash. The insurance and funders know that any member can be attended to in a pharmacy or at a doctor, and the medicines would be supplied and funded electronically with no cash needed.
EF: You publish the Mediscor Medicines Review Report every year. What are the trends you see coming?
CR: We have been publishing the Medicines Review Report since 2001, and we are the only company in South Africa that publishes on trends in South African medicine. These trends change periodically: we initially went through a phase where the cost of medicine was driven by utilization, meaning that medicines were consumed more and more. Now, the trend has normalized, the main driver of medicine cost in South Africa is the price of medicine, not because the medicines are generally becoming more expensive, but because of inflation. This is why the government is dictating and settings the cost of medicines. The Department of Health releases an annual price list. Some segments within medicine increase more than others, like biologicals, new products or oncology medicine. On the other hand, some medicines are decreasing in value, such as HIV medications and others. Another finding is that the generic usage of medicines in the country has been increasing from 31% in 2003 to 62% last year, so virtually doubling in the last 15 years.
EF: What are the services your customers require the most?
CR: We process the claims that are submitted by pharmacies and other service providers in South Africa, and we process between 100,000 to 200,000 claims a day while the patient is in the pharmacy which translates to 99% of them are done in real-time. The second service we do is preauthorization, as some insurances only allow access to certain products prior to authorization. Expensive oncology products, certain biologicals and renal medications are among other products that can be accessed once they have been pre-authorized. This service we provide is being used currently by 400 thousand patients.
EF: What growth opportunities do you see in the advising space?
CR: We are experts in designing medicine benefits, and we have an extensive expertise base, human resources and technology that allow us to provide advice to our clients ranging from what they should fund and how they should fund it. Similarly, if a manufacturer or an importer brings medicine into the country, we might make a comprehensive study of what our perception is of this new product, providing guidance and advising our clients on the funding strategy. We also set the reimbursement level, and suggest prices for certain products, and we make it available to all the pharmacies in the country. In this way, the advisory service that we provide is on multiple levels in terms of the cost, settings, reimbursement rights, what benefits should be covered and how they should be covered. It is growing over time, as these services are of added value for the business.
EF: What is your opinion of shifting to a value-based reimbursement plan or outcome-based reimbursement plan as Discovery is considering doing? How would you fit in this kind of model?
CR: I think it is an interesting theoretical approach. However, it all depends on the ability to influence the outcomes and access to those outcomes. I also think it is irrelevant in the pharmacy space, mainly because the pharmacist can’t influence what doctors prescribe. They might generically substitute but cannot therapeutically change anything. Secondly, the pharmacist doesn’t have access to the outcomes, and no pathology lab will send patient information to a pharmacist. This is why I believe it could work in theory, but in the pharmacy space, not so much.
EF: What is your footprint outside South Africa? Where are the opportunities for growth?
CR: The opportunity at the moment is vast; we are a unique strategic partner to companies in South Africa and abroad. We started originally focusing on the South African market, and 12 years ago, we began providing services in Namibia. We then started in Swaziland, Lesotho, and three years ago, Botswana. Our impact has been significant. For example, when we entered Botswana, the cost of medicine came down by 23% in the insurance companies with which we started working. We didn’t do anything fancy; we just eliminated excessive use and abuse of medication. In terms of opportunities, we are currently busy with some clients in Ghana, and we are looking at some opportunities further afield, in the Middle East.
EF: From a tech perspective, you measure people’s habits, usage, and medical history, what motivated you to do this? Data sensitivity and data privacy is a global issue, so how do you respond to that challenge?
CR: The first important starting point is that we do not own the data, our client owns the data, and we only utilize the data to make informed decisions, so we build IP around the data, but we never sell it nor make the data available to third parties. We use data to transform the patient’s journey, improving efficiencies, and we do publications for general benefit, and it is all anonymized data. We have quality data, and we have recently started an initiative where we receive all the outcomes from the pathology labs, so we know the results of our interventions. Equally important for us, is to track patient adherence to a prescription. For example, a patient that has HIV needs to take their medications 12 times a year for it to work. This is why we have follow-up programs to detect patients that are not taking their medicines because we want to prevent them from going to the hospital. It’s not just the positive follow-up but the negative one as well.
EF: Do you see the National Health Insurance (NHI) as a challenge or as an opportunity?
CR: It is both a challenge and an opportunity. The NHI documentation does not detail or stipulate a clear role for pharmacy. People need medicine, but it is still uncertain what the pharmacy’s role will be in an NHI environment. The NHI will need to have a central system that will manage medication, whether it is government tender stock or pharmacy stock. Building a central system that carries 60 million people is a priority, and only time will give clarity as to how the division of the provinces or the districts will be done. If an opportunity arises for us to be of service to any of the provinces or regions to manage the consumption or usage of medicines, we would be a willing participant. In general, people underestimate to what extent medicines are abused, especially when there is no central patient record that shows this abuse. What is key to the medical environment is that when a claim is assessed, it is not done in isolation, but against the patient’s history.
EF: What is your personal definition of ‘access’?
CR: Access is the capability to get the right medicine at the right time. In the private industry, there are no issues with access to pharmacies and medicines in the private sector. The South African private healthcare industry is better than good, it is fantastic, especially with what I have seen in other countries. In comparison, we are very advanced here, and the system is straightforward: a person walks into a pharmacy, shows the card, the transaction leads to us, and we provide an answer on the screen in a few seconds. This does not happen in other countries. The ability to project that access facility is phenomenal; access is enabled by outstanding technology and organizations that play a role. Rarely, a pharmacist in the private sector will not serve a patient, at worst they might be told that they are not at a preferred or designated provider for that fund or have to make a co-pay. The public sector is much more complex, and I can’t elaborate on how it works because I am not involved in the public sector.
EF: You participate in the Public Health Enhancement Fund, which addresses access in the general sense. Is this something you would like to speak about?
CR: Sure, but access for me is about patients getting their medicines, and the PHEF deals with improving the public sector, in making the public healthcare sector better, providing more doctors in the communities, and how to serve people on the ground better. We have been involved for eight (8) years, and we try to contribute however we can.
EF: How is the technology used to achieve patient centricity and performing proactive recommendations?
CR: Technology is crucial, it is the reason the world is continually evolving and changing. We see technology happening in two ways: collecting and measuring data and communicating. There are wearable devices widely available, giving us different types of information on how busy, or overweight one is, among others. There are perfect specific wearable devices and technology that tracks blood pressure, heart rate, sugar levels and so forth. These are very good at detecting behaviours and shift to a preventive approach to health. Technology is extremely important and becoming widely available, for example, there are more cellphones than people in South Africa. Technology and digitalization are changing how we interact with the existing processes.
From our side, we are leveraging technology in different ways. First, we have an electronic interface with all the pharmacies that are entrenched, and it works. To take the patient with us on their health journey, we need to create the ability to communicate with the patient, and this is where direct communication capability comes in. We send about 250,000 text messages a month to patients in the region on what they experience, notifying them, gathering feedback and learning what they do or don’t do.
EF: Mediscor is close to celebrating 30 years in South Africa; when you make a speech, what would you like your message to be like?
CR: We have a huge appreciation of the fact we have been in business for 30 years in a changing environment, and the message is that a lot more can be achieved if people are just prepared to collaborate and work together. We need a lot less self-interest and a lot more collaboration and engagement; this will lead us to great accomplishments. From another perspective, there is a massive opportunity in other African and Middle Eastern countries to better manage medicines and achieve a significant reduction in costs from 38-45% to 17% like what was done in South Africa.