NHI and medical schemes: The big questions we still need answered
The draft Medical Schemes Amendment Bill aims to make healthcare more accessible. However, while in principle government must be applauded for proactive measures to improve the quality of national healthcare in South Africa, there are concerns around some of the proposed amendments. And this is not only with regard to the future of private medical schemes.
The universal National Health Insurance (NHI) Bill proposed by Health Minister Dr Aaron Motsoaledi is defined by the World Health Organisation (WHO) as meaning people will receive the health services they need without suffering financial hardship.
While nobody is disputing that a comprehensive, viable healthcare system is needed – and indeed long overdue – several questions must still be answered.
How will the system ensure quality healthcare is provided?
How will it be administered?
How will it be funded?
A further question lies in the proposal that there will be a single public purchaser and financier of health services for the country.
And then there are the other concerns.
The role of medical schemes
Previous pronouncements on NHI intimated that medical schemes would essentially be reduced to playing a complementary role within the NHI dispensation. In the draft Bill, there are no explicit provisions for significant chances in the role, structure and functioning of the medical scheme industry, other than to say they will cover what the NHI doesn't.
But the NHI Bill was published in tandem with the Medical Schemes Amendment Bill, which contains some fundamental changes for schemes, which have potentially far-reaching implications for benefit options, structuring, coverage and funding obligations.
Our knowledge and experience as medical schemes enables us to assist government with the funding aspect, ensuring there is value for money, for instance, by avoiding duplication. We have a great deal of experience in keeping healthcare systems cost-efficient. Perhaps these Bills were presented prematurely – more as a strategy, with the implementation being, at best, vague.
Fraud, Waste and Abuse (FWA)
A major driver of healthcare inflation and increased costs is fraud, waste and abuse (FWA), which adds an estimated R22 billion to the annual cost of private healthcare. A conservative estimate is that between 10 and 15% of claims contain elements of fraud.
Private medical schemes have invested heavily to introduce robust analytical software to help identify anomalies and irregularities to put a stop to FWA. Is one central fund for all healthcare funding and purchasing power the most prudent option? A system of this kind is open to corruption and abuse on an even larger scale.
Comprehensive vs. complementary service
While comprehensive, NHI won’t cover everything. We remain positive that we can play a role in plugging the gap left by the NHI, a gap conceded by government.
Dentistry, optical care and other lifestyle conditions aren’t necessarily high priorities because there are bigger burdens in other areas.
According to WHO, 246 million people worldwide have low vision and 39 million are blind – most of them in developing countries. As much as "80% of all visual impairment can be prevented or cured", says the WHO, but many do not get the treatment needed.
So of the world’s 39 million blind people – most of whom are in the developing world – 30 million lost their sight unnecessarily; their blindness could have been prevented through basic health care and simple procedures like cataract operations.
In addition, 2.5 billion people don’t have access to glasses 700 years after they were invented. This is one of the areas in which medical schemes could provide a complementary service.
We are also keen to play an active role in preventative and managed healthcare, which has been neglected. Dr Motsoaledi has said numerous times that lifestyles diseases have become an epidemic in South Africa, and this too needs to be addressed. There are risks involved when people are only diagnosed once they suffer from a certain preventable condition.
Diabetes is a good example. Many people are pre-diabetic. Government has pledged to tackle the epidemic of lifestyle conditions, but we feel the burden of disease is so vast that the NHI system will not be able to manage this for over 55 million people.
The role of brokers is not completely understood. Their role is not simply to sign up members. Brokers help alleviate confusion by providing an independent evaluation of a person's specific circumstances, both from a financial and healthcare perspective.
In terms of servicing, brokers are invaluable, as they aid consumers in resolving queries quickly and efficiently, and help educate them. South Africans should have a choice whether they would like to use a broker when it comes to making their healthcare choices.
Much ado about co-payments
Rates are higher than those prescribed by the National Health Reference Price List (NHRPL) because the last time the rates for healthcare services were set was in 2006 – 12 years ago.
With an increase of around 3-6%, prices have not kept up with healthcare inflation, meaning rates don't allow for a healthcare provider to run a viable practice. In fact, the rates set by the NHRPL haven’t broken the R300 mark for a consultation yet.
This is why most rates are higher why there are co-payments. Many medical scheme plans offer payment way over the medical aid rate – meaning it's idealistic to abolish co-payments, which were initially introduced to contain rising healthcare costs by encouraging members to use designated service providers and network hospitals and manage expensive elective surgical procedures. In all instances where co-payments arise, consumers have alternative options to take.
Healthcare inflation is rising at an alarming rate and comfortably outpacing general inflation. In order to mitigate the effect of this, medical schemes negotiate rates with DSPs to ensure members access care of high quality and get maximum value for money. A member is still free to use another provider but this may attract a co-payment.
There are large-scale changes that would affect private providers of care (both healthcare professionals and hospitals), including data requirements, contracting and tariff regulations.
This can give rise to much engagement or even legal proceedings.
There are some potential positives in the proposals for introduction of some uniform prices for health services. This could be beneficial for the medical scheme industry, as it will create a standard set of prices/tariffs by which schemes can purchase services from providers and suppliers of health products.
But it is unclear in the Bill whether the prices that will be determined by the NHIF will be uniformly applicable to all purchasers of health care services.
At this stage, comments will still be received from various stakeholders within the industry and these will be considered before a final Bill is tabled. In the meantime, our mandate remains to provide affordable and quality healthcare for all South Africans, and we see our role as a complementary health product provider to the NHI.
Kenneth Marion is Chief Operating Officer of Bonitas Medical Fund. Views expressed are those of Bonitas.* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER