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Sandile Ngcobo. Picture: RUSSELL ROBERTS
Sandile Ngcobo. Picture: RUSSELL ROBERTS

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.

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  • source MAMM clips | HFAssociation
Picture: 123RF/SAMSONOVS
Picture: 123RF/SAMSONOVS

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.

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  • source MAMM clips | HFAssociation

Despite the NHIs faults, innovation will rise to the top

Jeremy Yatt, Principal Officer of Fedhealth

Jeremy Yatt, Principal Officer of Fedhealth

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. 

  • source MAMM clips | HFAssociation

Good medicine for some, bitter pill for others: the NHI era has dawned


The recent tabling in Parliament of the controversial National Health Insurance (NHI) Bill sent ripples of panic through the medical and financial fraternities, with Discovery’s share price taking a dive.

It is as if people had conveniently put NHI out of their minds, hoping it would magically go away. Perhaps they wrongly thought of it as one of those Zuma-era aberrations that our new president would quietly quash.

Suddenly, there’s no getting away from it. NHI is upon us.

Its final form and how it will be funded are still open to debate. Dr Sibongiseni Dhlomo, the chairperson of the portfolio committee on health, which will convene to discuss the bill, says there will be an extensive public consultation process.

More legislation is bound to follow – the current bill simply sets out the foundations for the NHI structure, which will take at least five or six years to implement in full.

The basic tenets of the bill, on which the government is unlikely to budge, are:

  • All South Africans will have equal, free access to health care.
  • The bulk of healthcare costs will be paid directly by the NHI Fund.
  • The NHI controlling body will control the prices and tariffs of almost all healthcare products and services.
  • Certain “complementary” services will not be covered by NHI.
  • Medical schemes and other health insurance will be necessary only to cover these complimentary services.

NHI will incorporate both private health care and public health care under a single system. The booklet “Understanding National Health Insurance”, issued by the Department of Heath, states: “NHI will enter into contracts with private and public hospitals, as well as private health practitioners and public clinics, to provide services Public hospitals and clinics will be made to upgrade their facilities. Healthcare facilities will only be part of the NHI system if they meet certain standards of care and are accredited by an independent body called the Office of Health Standards Compliance.”

There is no denying, among even the most vehement critics of NHI, that private healthcare funding in its present form is unsustainable. The gap between actual medical expenses and what medical schemes payout to cover those expenses is widening by the day.

I recently received an email from a pensioner who had to undergo an operation. On his meagre pension, he has to scrape together an extra R15 000 for specialists’ fees not covered by his medical scheme.

Insurance, known as gap cover, has been introduced over the years to cover this payment gap in the case of hospitalisation, where specialists routinely charge three or four times the medical schemes’ recommended tariffs. (This gap cover is relatively cheap – a few hundred rand a month per family. My question is, why have medical schemes not simply upped their premiums by this relatively small amount to guarantee hospital and specialist payments in full?)

One thing that seems certain is that medical schemes in their current form will not survive. Specialists charging what they like will also be a thing of the past. That said, any fee negotiations with specialists will have to take into account the high premiums many of them pay for professional liability insurance, which covers them in case they are sued for negligence. Obstetricians, for example, are paying more than R1 million a year.

Funding the system is, of course, the major hurdle, and the media has been abuzz with financial experts saying South Africa simply cannot afford the hundreds of billions of rands a year it will take to implement. But while commentators bemoan how much NHI will cost the overburdened taxpayer, none I know of has examined how much people may save in medical scheme contributions and those dreaded out-of-pocket expenses.


Statistics from last year’s annual report from the Council for Medical Schemes provide valuable context to the NHI debate.

  • Out of a population of about 58 million, about 9 million South Africans, or fewer than one in six, are covered by a medical scheme.
  • Gross medical scheme contributions for the 2017/18 year were about R180 billion, which equates roughly to R20 000 per beneficiary for the year.
  • Gross expenditure by medical schemes for the 2017/18 year was about R175bn, or about R5bn less than contributions received. (Schemes have other sources of income, including investment income.)
  • Of the gross expenditure, about R160bn (91%) was on health-care costs and R15bn (9%) was on non-healthcare expenditure.
  • Of the non-healthcare expenditure, about R12.5bn (83.7%) was for administration costs and about R2.2bn (14.5%) was on broker fees and distribution costs.


Here are the salient points of the bill as tabled, as it applies to you, the user:

  • Its purpose is to establish an NHI Fund, funded through “mandatory prepayment”, that aims to provide sustainable, equitable and affordable universal access to “quality healthcare services” by acting as the single-payer and single buyer of such services.
  • Services and products will be sourced from accredited and contracted providers.
  • It will apply to all health establishments, excluding military ones.
  • It will cater for the healthcare needs of South African citizens, permanent residents, refugees, prison inmates, and certain categories of foreign visitors.
  • Asylum seekers and illegal immigrants will be entitled only to emergency services and services for “notifiable conditions of public health concern”.
  • It will cover all children, including those of illegal immigrants.
  • You will have to be registered and you will be issued with an NHI card, which you will have to present on receiving healthcare services.
  • To register, you will have to provide an identity card or birth certificate, photograph, proof of residence and biometrics, such as fingerprints.
  • You will have the following rights:
    - To receive the service free at the point of care from an accredited provider.
    - To be treated within a reasonable time period.
    - To not be refused access or unfairly discriminated against.
    - To have access to information relating to your health as kept by the fund.
    - To be treated with a professional standard of care.
    - To make reasonable decisions about your health care.
    - To complain about a service provider or service by the NHI Fund, or appeal a decision made by the fund.
  • You will have to go first to a primary healthcare service (such as a clinic or general practitioner) in order to be referred, if necessary, to a specialist or hospital. If you do not follow the prescribed referral pathway, you will not have access to the healthcare system.
  • The bill provides for complementary voluntary services not covered by the NHI Fund. For these services, you will have to pay directly or use a medical scheme or other private health insurance.
  • Health Funders Association
Health minister Zweli Mkhize has thrown the medical schemes industry a lifeline, with provisions in the latest iteration of the National Health Insurance (NHI) Bill that enable them to continue until the ambitious scheme for universal health coverage is fully implemented.

At that stage, they will be restricted to offering cover for “complementary” services not covered by NHI.

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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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