The great medical aid rip-off exposed

The average medical aid user does not know that brokers charge monthly fees hidden in the regular premiums they pay. A report by the Competition Commission found that medical practitioners are subject to little regulation. This was one of the findings in a hard-hitting report by the Competition Commission which stopped short of accusing the private healthcare industry of exploiting clients while offering little value for money.

The Health Market Inquiry Report, published yesterday, found that consumers were at the receiving end of high costs in private healthcare and medical scheme cover, while there was no evidence that these increases resulted in improvements in health outcomes. The report also lamented that the healthcare sector was awash with disempowered and uninformed consumers, while practitioners were subjected to little regulation and accountability. Health consumers are disempowered and have to choose between 22 medical aid schemes and more than 100 benefit options, the report stated.

Former chief justice Sandile Ngcobo‚ who headed the five member panel‚ joked that he had been told it would last only two years. It had been gazetted to take two years‚ but took more than 18 months to get information from private hospital groups‚ doctors‚ medical aid schemes and administrators‚ he said.

On medical aids‚ Ngcobo said consumers couldn’t shop for better-value options. “The inability of consumers to easily compare options means they do not readily switch schemes to better options from rivals. Unlike other consumer goods‚ such as a phone or car‚ in which a buyer makes a decision based on its price and quality‚ people get healthcare blindly. They don’t know what they are getting. “In our review of the South African private healthcare market, we found that it is characterised by high and rising costs of healthcare and medical scheme cover, and significant overutilisation without stakeholders having been able to demonstrate associated improvements in health outcomes,” read the report.

The report found “a general absence of value-based purchasing, practitioners who are subject to little regulation and failures of accountability at many levels”. According to the report, three large hospital groups, both individually and collectively, made it “hard for newcomers and fringe-players to grow and compete on merit”. “The three groups are able to distort and prevent competition by binding the best medical specialists to their hospitals with lucrative inducement programmes, with associated exclusionary effects on innovative newcomers,” it said.

Mediclinic Southern Africa disputed that the three hospital groups were exploiting the market, arguing that the commission had used archaic data. “Mediclinic supports cost-effective quality care and does not condone any treatment that is not in the best interests of the patient,” said Koert Pretorius, chief executive of Mediclinic Southern Africa