Final report on health market inquiry due out on September 30
The inquiry began work in January 2014 and was tasked with investigating the dynamics in the private healthcare market.
The Competition Commission’s health market inquiry (HMI) plans to publish its long-awaited final report on September 30, it announced on Tuesday
The inquiry began work in January 2014, and was tasked with investigating the dynamics in the private healthcare market and determining whether there are barriers to effective competition that hamper patients’ access to care.
No racial profiling of members by medical schemes, specialists association says
The SA Private Practitioners’ Forum says many doctors bill incorrectly out of ignorance rather than because they intend to commit fraud.
The SA Private Practitioners Forum (SAPPF), one of SA's key associations for doctors in private practice, says it has no evidence medical schemes are using racial profiling to determine which of its members to investigate for fraud.
The Council for Medical Schemes (CMS) is conducting an investigation into allegations from the National Healthcare Practitioners Association (NHCPA) that medical schemes and administrators are targeting black and Indian doctors for fraud investigations and unfairly withholding payments. The CMS regulates the medical schemes industry, and is conducting its second round of public hearings into the matter this week.
In its submission on Tuesday, the SAPPF, which represents specialists, raised concerns about the methods used by medical schemes to flag potentially crooked doctors among its membership base, but was adamant there was no racial dimension to it. The SAPPF did not keep records of their members’ race, but had “guestimated” the race of members who had been investigated based on their surnames and geographic location, SAPPF president Adri Kok said.
“We’ve not picked up that there’s one race group [targeted] more than another,” she told the investigating panel, which is chaired by advocate Tembeka Ngcukaitobi.
Kok said medical schemes analysed claims data to identify outliers, and did not always appreciate that there might be legitimate reasons for a specialist whose billing pattern was out of the ordinary. For example, doctors who worked in isolated areas with few doctors were likely to have higher hospital admission rates than their urban counterparts. Similarly, a doctor who had, over the years, developed an interest in a specific area of medicine, such as cardiology, might bill for more heart-related events than the average, she said.
She said many doctors, particularly the more junior ones, billed incorrectly out of ignorance rather than because they intended to commit fraud. But she conceded there were doctors who deliberately sought to defraud medical schemes.
“Some outliers are indeed frauds,” Kok said, citing a doctor who had abused the coding system to bill for R2.5m in services he had not actually provided.
Kok said the SAPPF had been able to help many of its members resolve their disagreements with medical schemes, and urged doctors to co-operate when asked to open their books.
The Independent Community Pharmacy Association (ICPA) told the inquiry that it had conducted a survey among its 1,100 members, and found 82% of those audited by medical scheme administrators were black-owned.
This was evidence of racial profiling, said ICPA deputy chair Kgabo Komape, since only 35% of the ICPA’s members were black-owned enterprises.
However, he was unable to tell the panel on Tuesday how many ICPA members had participated in the questionnaire and did not provide details of the survey’s methodology. These details are important, as the panel is seeking evidence of racial profiling and will need to be sure there was no selection bias in the survey that might skew its results. The inquiry asked Komape to provide the underlying data for his claims.
Komape told the panel that medical schemes imposed an onerous administrative burden and unreasonable deadlines on the pharmacies they suspected of fraud, as they typically asked for three years of invoices to be supplied within 10 days. Medical scheme administrators also bullied pharmacies into signing acknowledgements of debt, he said.
When pressed to provide evidence for this claim, he said pharmacists did not want to come forward because there was such shame attached to acknowledging alleged wrong-doing
The inquiry has previously heard from members of the NHCPA, which accused medical scheme administrators of racial profiling. It said that black, Indian and coloured doctors were required to share patient files when claiming payments, in breach of patient-doctor confidentiality, and that delayed or declined payments had forced some of its members to close their businesses.
The inquiry is expected to complete its work by November 1.
Despite the NHIs faults, innovation will rise to the top
When the NHI is implemented in 2026, the lives of medical schemes, their employees and their brokers will be in for a lot of changes. FAnews posed a few questions to Jeremy Yatt, Principal Officer of Fedhealth, who raised several concerns about the NHI.
What are your feelings towards universal healthcare?
Fedhealth – and I would bet most of the healthcare funding industry – is fully behind the concept of Universal Healthcare (UHC).
Using existing medical scheme and private healthcare infrastructure is the fastest way to expand UHC to the public without unduly burdening the state. The more people who belong to medical schemes, the less demand there is on the public sector and the more affordable the private sector becomes.
The other issue for debate is what would be covered in terms of UHC. It is unquestionable that the more diseases or conditions that are covered, the more expensive the system becomes. Both in a state and private sector environment, there have to be cut-offs; this is where the noise comes in.
What are your specific concerns with the NHI in its current form?
Costing, competence and constitutionality. Our country cannot afford this.
Then the general state of incompetence in state facilities, linked with the general approach to looting in State-Owned Enterprises (SOEs), does not inspire vast amounts of confidence. Accounts of incompetence, indifference and downright illegality are legion. So why would the NHI work?
The last point is the one with which Fedhealth has the biggest issue. Providers are not going to simply accept this, so there will be a plethora of legal challenges and a number of valuable healthcare workers, specialists in particular, looking abroad.
Both scenarios are bad. And current medical scheme members are not going to stand for a system of double taxing (income and payroll tax) and then get inferior service which they can right now access for free. Even if, by some miracle, the state is actually able to deliver on the promised healthcare service, it won’t ever be the same or even similar to what is being currently received.
The single funder system and the dereliction of private sector skill, experience and competence are three of the main points that require a radical rethink.
Do you feel that the reintroduction of medical tariffs will be a better solution to driving down industry costs?
Yes. The industry warned the Competition Commission years ago that doing away with tariffs would result in price increases. As usual, people who know very little about the medical funding industry wouldn’t listen.
Tariffs and pricing are but one component of the cost drivers in medical schemes. We increase our hospital tariffs by 5%, yet our year on year costs increase by over 10%.
These increases are driven by ageing and medical technology, issues that are hard to manage. The increases are also driven by lifestyle, non-communicable disease proliferation and by an environment that ties the hands of funders.
A removal of an appendix the old-fashioned way can cost nearly half of doing it by way of laparotomy with similar length of stay and complication rate. Yet, schemes are obliged to pay for the more expensive version.
South Africa has among the highest rate of cesarean sections in the world, yet schemes are obliged to fund them without co-payment if they are deemed emergencies. So of course, every cesarean section that is performed is an emergency, even when it was pre-authorised months before.
In its current format, what will the future of medical schemes be in an industry run by the NHI?
I just can’t see it (NHI) happening. There is a real risk of our already fragile healthcare system being placed under even further pressure leading to a total collapse.
Medical schemes will struggle to remain in existence if NHI does happen; there isn’t enough money in the system.
In an ideal world, what would the role of medical schemes be in the NHI industry?
It would be a public-private partnership.
It works like this: where there are things that are good for society and make money, medical schemes can provide the service with the necessary checks and balances. Where there are things that are good for society but don’t make money, that is the role of government to provide the service.
By reducing the burden on the state, a more effective service provision is possible. We need regulation that helps make medical schemes more affordable and incentivises more participation. This will leave the state to provide for the poor and needy.
In the event that the NHI is implemented as proposed, medical scheme brokers will probably have a swings and roundabout effect. They will lose a lot of commission from medical scheme membership but will at the same time probably make up for it with medical insurance products.
What government fails to understand is that the market always finds a way. If medical schemes cease to exist (except for the complementary function) it will open the door for new products to emerge to help people fund medical expenses. People won’t accept what the Department of Health is proposing, and entrepreneurs will find a way to meet their needs. Brokers will be at the forefront of that.
Zweli Mkhize throws medical schemes a lifeline in NHI Bill
The bill will enable schemes to continue until universal health coverage is implemented, after which they can cover ‘complementary’ services
At that stage, they will be restricted to offering cover for “complementary” services not covered by NHI.
Read the NHI Bill here
The bill is the first piece of enabling legislation for the government’s ambitious plans for implementing universal health coverage
THE long-awaited National Health Insurance (NHI) Bill was introduced to Parliament this morning. The bill is important because it is the first piece of enabling legislation for the government’s ambitious plans for implementing universal health coverage, which it calls NHI.
Health Minister Zweli Mkhize said at a briefing in Pretoria that NHI seeks to optimise the available resources by pooling existing public funds and engaging the entire quantum of the health sector, so that in the end there is a single purchaser of services.
A draft NHI Bill was released for public comment in June 2018, and then revised before being submitted to Cabinet. The updated version was approved by the Cabinet on July 10. The bill contains potentially contentious measures, as it is expected to signal the government’s view on the future role of medical schemes and that of provincial health departments.
Observers will also be scrutinising the governance measures put in place to protect the NHI fund from corruption. Mkhize said at the briefing that medical schemes “will have no trouble” adapting to the changing environment, “by developing products and services that provide complementary cover”. Once the bill has been tabled in Parliament, it will be considered by both the National Assembly and the National Council of Provinces, which are both expected to undertake a process of public consultation.
The NHI Bill can be found at:
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