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2018/10/24 12:41 PM
Charles Simkins writes that despite the problems raised, govt seems determined to press ahead with scheme.


The National Health Insurance Green Paper was published in August 2011. A White Paper followed in December 2015, and the national Department of Health (NDOH) published draft legislation for comment in June 2018, with a closing date for comments in September. The legislation is not before Parliament yet, and it seems unlikely that it will be passed before the election next year. Since National Health Insurance has implications for medical schemes, a draft Medical Schemes Amendment Bill (MSAB) was published at the same time as the National Health Insurance Bill (NHIB).


The release of the Medical Schemes Amendment Bill was not accompanied by an explanatory memorandum, so it is difficult to see what the government is intending to achieve by its provisions. There are some useful provisions in it. Strengthening the governance of medical schemes, an improved complaints procedure, and strengthening the position of children are all measures the HSF supports. On the other hand, there are grounds for concern. The provision for reduced contributions for young adults between the ages of 18 and 30 flies in the face of the principle that healthy people should subsidize those needing more medical assistance. Moreover, the MSAB excludes the Consumer Protection Act from applying to medical schemes matters, and it removes limitations of the waiting period for adults, both reducing rights.

Also, the provisional report of the Competition Commission’s Health Market Enquiry has not been taken into account fully. We believe that the MSAB should not proceed until the final report of the Enquiry has been published. The NDOH should respond publicly to the final report, and the explanatory memorandum accompanying a revised version should deal with the extent to which the report’s principles have been accepted by the government and how they are to be given effect by the MSAB.


In the HSF’s response to the White Paper on National Health Insurance (to read, click here), we made the point that, given the managerial problems in the public health system, it would be counter-productive to impose the extensive task of creating new links with the National Health Insurance Fund, including contracts between all public health service providers and the Fund. Rather, efforts should be devoted to strengthening existing management. We are particularly alarmed by the Office of Health Standards Compliance 2106/17 report. Only seven out of 851 inspections found health establishments fully compliant with requirements, with a score of above 80%. By contrast 532 establishments were assessed as non-compliant or critically non-compliant, with scores of below 50%. On this showing, most public health service providers would simply be ineligible to enter into contracts with the NHI Fund.

We were also alarmed at the lack of information about costing and financing. Especially in a period of low growth, such as South Africa is experiencing at the moment, there are many claims on additional tax rand. Our concern has been echoed by others [1].

Neither concern has been allayed by the publication of the NHIB. The government has divided introduction of national health insurance into three phases. The first phase is now complete, and we believe the NDOH owes the country a report on the pilot projects it undertook. No attempt by the NDOH to keep appraisals as confidential reports within government is acceptable to us.

Also, release of the NHIB has not been accompanied by any estimate of the costs of NHI, nor of the ways of funding it. The Minister of Health has referred the funding issue to the National Treasury. That cannot proceed until the basket of services and their cost are determined by the NDOH, a task they seem not to have tackled at all to date. Instead, they have left to two committees to be established in terms of the NHIB: a Benefits Advisory Committee and a Health Benefits Pricing Committee. This leaves ordinary South Africans clueless about what services they can expect from national health insurance and what they can expect to pay for them, not at the point of service, but by way of increased taxation or dedicated NHI contributions. It follows that the implications for medical schemes are also unknown, since the Bills specify that medical schemes will not be able to cover services provided by the NHI.

Health care is predominantly a private good, with some positive spill overs, particularly when it comes to infectious diseases [2]. This is not a matter for normative specification. Rather it emerges from the nature of the good itself. The only way to ensure equal provision of a private good is by an army quartermaster system, and this the NHIB seeks to introduce by way of standard service and referral protocols. Since not all services will be covered by the NHI, there will continue to be a two tier system: one part covered the NHI, the other by medical aids or out of pocket expenses. The boundary between the tiers will be relocated.

The implicit assumption in the NHIB is that the two tiers will be distinct. But this is not the way in which users of the public health system operate at present. They may use the public system when effective treatment is on offer, but the available evidence indicates that many resort to the private system when it is not. Equally, under NHI, a user may well be happy to use an NHI contracted pharmacist, but may prefer a private consultation with a GP or specialist. Whether the private consultation will be possible for a service provided by the NHI is itself not clear, since a crucial section of the NHIB is ambiguous. In general, the NHIB makes no provision for people who shuttle between systems. It simply does not consider the possibility.

Accordingly, we believe the NHIB should be withdrawn, pending a radical revision of approach.

This view does not commit us to the status quo in the health system. We support the introduction of new services in the public health system, presently being finances by a national health insurance item in the health budget [3], but we note its small share (of the order of 1%) of national and provincial public health expenditure. We are also in favour of cost studies of services in the public sector as a continuing programme. Indeed, had they been done in the past, we would have a better basis for establishing the cost of the NHI.


Despite the problems discussed here, and elaborated in our submissions, the government seems determined to press ahead with national health insurance, and promises about it are likely to emerge in the coming election campaign. Accordingly, further developments can be expected during the life of the Sixth Parliament. The views of key constituencies will have to be considered carefully. No system not based on consensus can proceed.

Charles Simkins is Head of Research, Helen Suzman Foundation.

This article first appeared as an HSF Brief.

[1] See for example, Davis Tax Committee, Report on Financing a National Health Insurance for South Africa, March 2017

[2] For instance, the treatment of A’s TB reduces the chances of B being infected buy it.

[3] ‘National Health Insurance’ is a misnomer, but no matter.
2018/10/24 12:35 PM
Diverse, innovative benefit design strikes a chord with corporates and individuals

“Value, sustainability and choice are among the most important attributes companies and individuals look for when choosing a medical scheme,” says Josua Joubert, principal officer of CompCare Wellness Medical Scheme.

“Companies have employees with differing needs and if everyone within the company can find the perfect product option to fit their lifestyle, needs and pocket within a single medical scheme, it is not only ideal but also highly cost-effective.”

“We pride ourselves on a customer-centric approach and a value proposition that provides a blend of affordability, choice and benefit richness underpinned by a personalised approach. With a range of seven options on offer, it is as easy to choose the ideal product for the managing director as it is for a junior employee on a tight budget.”

“Any company looking to bring healthcare to its workforce would do well to consider CompCare, as the scheme is not only well placed to provide attractive savings but also a diverse, benefit-rich range of products to accommodate every income level,” adds Joubert.

“A leading medical schemes survey has consistently ranked CompCare among the top ten medical schemes in terms of longevity and sustainability. CompCare truly stands head and shoulders above the rest when it comes to providing value for money particularly in the mid- and low-cost range.”

The scheme has worked hard to keep contribution increases as low as possible for 2019. The contribution increase rate, which comes off a historically low base, is 9.9% across all options, while benefits remain attractive and provide solid healthcare cover for every stage of life.

While the scheme has comprehensive products available for those looking for all the ‘bells and whistles’, many of the product options are also highly appealing to young, healthy adventure seekers and students, whose needs differ substantially.

“The standard Axis option, marketed as a hospital plan with a difference, offers a premium and comprehensive private hospital benefit plan with post-operative rehabilitation, as well as child, chronic and wellness benefits,” notes Joubert.

“The UniSave option has been developed specifically with younger people in mind, offering the most competitive and comprehensive hospital plan which comes with a 25% savings benefit and flexible, discretionary spending ability.”

According to Joubert, it is a point of pride for CompCare that it is one of few medical schemes to cover all costs relating to sports injuries, including injuries sustained when participating in extreme and adventure sports. “We are fully in the corner of extreme and adventure sports enthusiasts and this includes everyone from professional athletes to weekend thrill seekers.”

The scheme also provides Efficiency Discount (ED) products across most of its options. These offer discounted premiums of up to 25% with the proviso that Dis-Chem Pharmacies are used for chronic medication and Netcare hospitals are chosen for elective procedures.

CompCare encourages an active, healthy lifestyle and provides members with access to accredited biokineticists and dietitians. The scheme also has an Emotional Wellness Benefit with unlimited telephonic counselling and referrals for one-on-one counselling.

“In order to deliver services and benefits that stand head and shoulders above other medical schemes, CompCare partners with Universal, an administrator that has established itself as a leader in providing evidence-based, integrated healthcare services,” says Joubert.
2018/10/24 12:36 PM
The Hospital Association of South Africa (HASA) has announced its new Board of Directors. They were elected at HASA’s Annual General Meeting on 2nd October 2018.

The HASA Board of Directors Chairman is Dr Biren Valodia, the Chief Marketing Officer for Mediclinic South Africa; and the HASA Deputy Chairman is Matthew Prior, the Life Healthcare Funder Relations and Health Policy Executive.

Other members of the HASA Board of Directors include Melanie Da Costa, the Netcare Director of Strategy and Health Policy; Amil Devchand, the Chairman of the National Hospital Network; Lynelle Bagwandeen, the Netcare Company Secretary and General Counsel; Dr Paul Soko, the Life Healthcare Executive Head of Clinical Services and Quality; Clara Findlay, Mediclinic South Africa Head of Legal Services; and Elsabe Conradie, the CEO of the National Hospital Association.

CEO Dr Dumisani Bomela is the executive representative on the Board and is unaligned to any of the HASA member groups. Tienie van den Berg, the CEO of Zuid-Afrikaans Hospital, has retired from the Board but has agreed to continue to serve the organisation as Treasurer.

During the annual meeting, incoming Chairman Dr Valodia welcomed the election of the Board and paid tribute to the outgoing chairman, Melanie Da Costa.

“Melanie held the reins and directed the organisation through a period of legislative and regulatory complexity, until the tabling of National Health Insurance (NHI) and the Medical Schemes Amendment Bills and the release of the Healthcare Market Inquiry provisional report and recommendations. Her deep and insightful knowledge of policy and her far-sightedness in healthcare system issues enabled us to make a number of positive contributions to the many debates underway, and in so doing crucially helped HASA to represent the private hospital system in engagements with key stakeholders,” said Dr Valodia.

“She has given the organisation strong leadership and purpose during her tenure and we are all grateful to her for her massive contribution to the organisation, the private hospital sector, and to healthcare reform. Fortunately, Melanie remains on the Board and in typically selfless fashion, she will help the Board through this transition and will continue to make an invaluable contribution in these still-complex health reform processes,” conclude Dr Valodia.
2018/10/24 12:36 PM
The statutory body charged with assessing the quality of hospitals and clinics is so short-staffed it cannot cope with the volume of complaints it is receiving from patients, its CEO told parliament on Thursday.

The Office of Health Standards Compliance (OHSC) will shortly assume the responsibility of determining whether healthcare facilities meet the grade to be accredited for providing services under National Health Insurance. It was formally established three years ago, but it still does not have the legal weight to inspect private healthcare facilities or enforce penalties on persistent offenders.

The OHSC saw a surge in the number of complaints in the year to March 2018, and managed to respond to barely half of them within six months, its CEO, Siphiwe Mndaweni, told parliament’s portfolio committee on health as she presented the organisation’s 2017-2018 annual report.

The OHSC received 1,122 complaints during the 2017-2018 financial year, compared to 730 complaints the year before. The number of complaints increased partly in response to the highly publicised Life Esidimeni scandal, in which 144 state mental patients died, said Mndaweni.

She said the OHSC’s capacity to respond to complaints was hampered by the fact that its staff complement had not changed during the period under review, and by slow responses from healthcare institutions.

Half the posts in both its complaints centre and its investigation unit stood empty, she said.

Most complaints were about public health facilities in Gauteng (378) and KwaZulu-Natal (138) she said. 

She said new norms and standards for health facilities would come into effect in February 2019, at which point the OHSC will begin inspecting private facilities.

The OHSC had developed an enforcement policy, which proposes fines for persistent offenders, but it has yet to be approved by the health minister. Once approved, it will be published in the Government Gazette, said Mndaweni.

“The office has a responsibility to ensure there is clear understanding of how enforcement will take place against persistently noncompliant institutions."
2018/10/24 01:19 PM
It is with a great measure of delight and satisfaction that Genesis Medical Scheme is able to announce, for the 7th year running, the lowest average contribution increase of all open medical schemes for 2019.

According to Dennis van der Merwe, the Principal Officer of Genesis Medical Scheme, the average contribution increases announced by some of the bigger open medical schemes for next year is currently 10.3%. The good news for Genesis’ members, on the other hand, is that their increase will average only 5.5% in 2019 - almost half of what members of other medical schemes may have to fork out.

Whilst the cost of private healthcare in South Africa is reported to be the highest in the world, the industry is also in the midst of great uncertainty with the proposed introduction of the National Health Insurance Act (NHI) and proposed changes to the Medical Schemes Act.

Given our current economic climate, the multiple challenges we face with private healthcare costs and government’s attempts to change the entire healthcare landscape, you may ask just how it is possible for Genesis to be rated as one of the top medical schemes in South Africa AND to maintain such low annual contribution increases, year after year.

Dennis van der Merwe explains, “The ability to offer such a low increase in contributions, coupled with benefit enhancements and not reductions, as is the case with some other medical schemes, is a result of the benefits of self-administration, prudent risk management, positive financial and operational performance, steady membership growth and a young membership profile.” Van der Merwe continues to explain that the Scheme’s focus is on the provision of primarily catastrophic cover - that is, the big accident, illness or disease. “In order to keep contributions as affordable as possible, Genesis does not follow the general trend of trying to be everything to everybody, but to rather provide the best possible, no-frills and easy-to-understand benefits to a niche market in South Africa, with client centeredness and service remaining the key differentiators,” comments Van der Merwe.

Affordable medical cover is what Genesis seems to be doing best. According to data published by the financial advisory group GTC, the average increase across medical aid schemes over the last decade has hit as high as 6.4 % points above inflation. On the other hand, Genesis has maintained average contribution increases in line with or below inflation over the last decade.

Depending on which benefit option Genesis members are on, the Rand value of the 2019 contribution increases range between only R50 and R125 per adult per month. According to Van der Merwe, it is important that members of medical schemes consider the actual Rand value of their 2019 increases and not just values expressed as percentages. “We pay our bills with money; not percentages. To demonstrate this with a practical example, a 10% increase on a hospital plan from one medical scheme (“Scheme A”) may cost a family of four (two adults, two children) an additional R220 per month in 2019, while the same 10% increase may cost R463 per month more on a similar hospital plan from another medical scheme (“Scheme B”). “Although percentages are commonly used in the industry to compare increases, members should actually not be guided by this only; they should consider the actual Rand value of such increases. Percentages are only useful for comparisons within a particular scheme. What members have to pay in money is what it is all about”, concludes Van der Merwe.

There can be no doubt that we are experiencing some very challenging times financially. Each month the task of balancing the budget takes on a new meaning with the ever increasing cost of petrol, food, electricity, water and just about everything that we need to run our households. Members of medical schemes should consider their options carefully and do their homework properly. Expensive medical aid cover does not buy a better bed in hospital and it is for this reason that Genesis encourages everyone to weigh up their in-hospital (risk) cover in relation to what they pay.
2018/10/24 12:37 PM
Our healthcare system should know no boundaries. Our Constitution makes no distinction in the Bill of Rights between South African citizens and foreign nationals who live within the boundaries of the Republic of South Africa. Yet the NHI has the potential not only to be hijacked by commercial interest groups, but is tumbling down the slippery slope of xenophobia.

South Africa’s two-tiered health system based on wealth inequities must end. The concepts of the rich subsidising the poor, the young the old, and the healthy, the infirm or ill are lauded as sound principles on which to deliver health to our people. Let us not perpetuate a two-tiered health system by gating foreign nationals from the right to health and universal health coverage in its totality in South Africa. We support universal health coverage and a financing mechanism that eradicates the way we deliver health in South Africa.

The National Health Insurance (NHI) has gone on a circuitous journey from its original, much-heralded vision of ensuring universal access to healthcare. Now there are signs that the NHI — in the form of the NHI Bill of 2018 and the language of the teams charged with designing implementation — has the potential not only to be hijacked by commercial interest groups, but is tumbling down the slippery slope of xenophobia, as it pertains to those who are eligible as beneficiaries.

In recent months there have been a number of xenophobic attacks on poor foreigners and township foreign traders. In each instance the xenophobia — the hatred of foreigners — has been prompted by rival interest groups who do two things — first, they are selective as to which foreigners to hate and second, they couch their actions in terms of something that appears to be universally acceptable.

When the crowds attacked Somali traders in White City, Soweto in August they were prompted by assertions from rival township traders and their commercial backers that Somali traders were selling food that was past their sell-by-dates.

There were no equivalent mobilisations when the listeriosis outbreaks were found to be causally linked to well-known brands of processed meat nor were there violent attacks on supermarkets selling American chicken products that were dumped on the South African market after being embargoed elsewhere — it was all handled politely by our Department of Trade and Industry as part of the ongoing African Growth and Opportunity Act negotiations with the US.

So the point about xenophobia is that it is recognisable by the following characteristics:

• It is the selective targeting of poor foreigners and foreigners from poor, African and other communities in the global south;

• It is not some kind of primordial attitude in all of us, but is invariably driven by vested interests for whom the presence of these foreigners poses economic threats;

• It is a phenomenon that dare not speak its own name… so it couches itself in the language of “standards to be maintained” or some public interest.

Overseas the refrain from unscrupulous politicians is that foreign nationals “take our jobs”, whether this is about Polish workers in Britain, Syrian and North African refugees entering Europe or Mexicans in the US.

Now in South Africa, there has been a variation on this theme in recent years and this has to do with foreigners taking “our hospital beds”. Anecdotes of major hospital labour wards being “filled with foreigners” have thoughtlessly become part of the narrative of what drives the health crisis and is even creeping into the policy language of the National Health Insurance (NHI) in 2018.

When the NHI was first mooted in a Green Paper in the early 2000s it was seen as a set of reforms in healthcare that would ensure universal access to healthcare. It would do so by generating a pot of money from forms of taxation of employers and the employed — which sum of money could be used to procure medical services and drugs from both the public and the private health systems, without people paying out of pocket up front or having to pay to belong to a medical aid scheme.

Straight away there was a brouhaha from a variety of vested interests — let’s say on the right side of the political spectrum — on the one hand, and from health and social justice activists — let’s say from the left side of the spectrum — on the other. From the latter side the NHI was criticised for its modesty and for leaving the private hospital firms and medical aids untouched and not ensuring the necessary investment to improve the public healthcare system first.

The attacks on the NHI from vested interests — the medical aids lobby, private doctors, private hospital companies - stirred the pot of anxiety of the wealthy and the middle classes for whom the fear was that universal healthcare access would cause overcrowding and lower standards. The state of public healthcare was used as a bogeyman to scare public opinion, as is now the case with the narrative that foreigners and overpopulation are causing the crisis in the public health system.

The fingering of foreign nationals and their so-called “abuse” of the healthcare system is a superficial analysis of the drivers of the crisis in healthcare and is a dangerous narrative that feeds into the overall narrative of xenophobia that is engulfing the country.

In many quarters the crisis in the public healthcare system gets blamed on overcrowding — as if the poor are to blame for their own health misery. But there is no justification for the xenophobia — albeit disguised under the concerns about the affordability of the NHI — saying that South Africans are simply over-populating and foreigners are crowding our hospitals.

The facts tell a different story…

The collapse of health services is foremost due to the poor leadership, governance and management, the lack of well trained and supported human resources, ageing and dilapidated infrastructure, inadequate financial planning and the under-resourcing of the public sector in part due to tight fiscal policies and the favouring of private sector investment. This has been compounded by the looting of state coffers, especially over the last decade.

And the 2014-2016 Triennial Report on Perinatal Mortality in South Africa tells us that South Africa’s birth rate is in decline. There has been a year-on-year decrease in the total number of deliveries since 2012.

Against this the population has now risen to 57 million, largely, the data shows, because there has been a slow but sustained decrease in all important mortality areas over the past three triennia.

Of all deaths recorded on the Perinatal Problem Identification Programme in South Africa, 98.1% of babies are born alive and of these 98.9% survived until discharged from hospital.

This debunks the notion that South Africans are making too many demands on public services by a growing population. The increased demands are coming from our protracted demographic transition and our quadruple burden of disease: the demands of managing chronic ailments attributable to non-communicable diseases such as hypertension and diabetes; maintaining our important antiretroviral programme and controlling tuberculosis, as well as attending to the collateral damage of violence and injury that fill up our emergency rooms.

It is important for all health workers to remind themselves of the higher calling in the ethical prescripts of their professions and to remember that they have an obligation to practise their professions to the highest standards possible.

The needs of the patient that is in the emergency room, labour ward or hospital bed in front of you must come above all else and personal prejudice and preference or how a health system is financed must be put aside.

But far from the government itself taking an unequivocal leadership stance against the xenophobia narrative emerging, the latest incarnation of the NHI — the 2018 NHI Bill — seems to stray into accepting the xenophobic blame game.

In terms of the NHI Bill, the fund created to deliver healthcare has restrictions on those who can access it:

• You need to be a South African citizen or a dependant of a citizen, as defined in the South African Citizenship Act, 1995; or

• You need to be a permanent resident or a dependant of a permanent resident in South Africa as defined by the Immigration Act and documented in the population register by the Department of Home Affairs; or

• A child over 12 and below 18 who has not been registered as a user; or

• An inmate as provided in section 12 of the Correctional Services Act.

If you happen to be a refugee or asylum seeker who does not have refugee status as defined in the Refugees Act, you only have a right to:

• Emergency healthcare services;

• Services for notifiable conditions of public health concerns;

• Paediatric and maternal services at a primary healthcare level.

Does this mean that a child of a foreigner who presents with pneumonia, who requires admission to hospital for intravenous antibiotics and oxygen or requires ventilation, will only be entitled to receive primary healthcare, which essentially translates into out-patient care and oral antibiotics?

Or if a foreign woman in labour requires a caesarean section, or high/intensive care for pre-eclampsia, will she languish in facilities not equipped to manage complicated labour, and not triaged as is the norm?

Or if a foreigner or their child has cancer, referral for radiation therapy, surgery or chemotherapy may not occur?

The NHI is silent on the triage into care beyond primary healthcare for foreigners with no status in our country and this need to be urgently clarified if the intent is to implement protocols to avoid exclusion of services.

The NHI Bill states that people seeking health services from accredited health services must be a registered user of the fund and must present proof of such registration to secure healthcare. Does this mean exclusion if you are not registered, even in emergencies?

There is the perpetual fear that street-level bureaucracy imposed by clerks or other gate keepers at primary healthcare level will impose restrictions on foreigners, those who have not been accredited or those who have no evidence of accreditation on hand. Assurance is needed that the basic tenets of universal health coverage will be employed to all those seeking care.

And then to compound the sin of latent xenophobia, the 2018 NHI Bill inverts means and ends: It abandons the goal of equity contained in the language of commitment to universal access to healthcare — and speaks the language of the NHI being essentially a fund.

It has been noticeable how since the Green Paper stage there has been quite a shift from many of the vested interest anti-NHI lobbyists — from hostility to enthusiastic acceptance. Much of this shift has been prompted by a new readiness to embrace the policies of these erstwhile critics.

This shift was noted by retiring UCT Professor of Public Health, Di McIntyre, who remarked in her valedictory retirement speech in 2018 that the latest NHI Bill has made a “180 degree turn”.

Dr Louis Reynolds of the People’s Health Movement – one of several health activist groups calling for more time for public submissions on the NHI Bill — has been even more explicit:

“If composed as the National Department of Health proposes, these bodies (whose central task is to shape our future health system) will be dominated by powerful groups with vested interests in healthcare: the corporate private sector, technocrats, and other special interest groups — medical schemes, the Actuarial Society, private hospitals, academic and research organisations, and elite professional associations. Key constituencies have been left out. Community health workers and nurses — the backbone of the primary healthcare system that forms the foundation of the NHI — are excluded. Civil society is included in only one group.

Why does the department’s establishment of these structures to assist the “implementation” of the NHI in this way represent a retreat from constitutional principles and values fundamental to the NHI?

Furthermore, the new structures’ terms of reference appear to be full of contradictions; the NHI that emerges is not the NHI that the department envisaged originally. For example, every version of the NHI policy including the final White Paper has been clear about the need for a single payer system of financing. Yet, by some sleight of hand, the ToR of the National Advisory Committee on the Consolidation of Financing Arrangements (one of the new structures) prioritises mandatory medical scheme membership for people in formal employment.”

The NHI has indeed shifted — from its claimed goal of equity and universal access — to becoming the sum of the concerns of various commercial groups, while excluding the most vulnerable and alienated foreign nationals.

This shift includes ignoring the concerns of health activists, researchers and academics who have entered the debate on the side what critics on the left have long identified as an essential problem with the original conception — the failure to prioritise bolstering and radically investing in and upgrading the public healthcare system to ensure that it could be accredited as a provider of quality health services.

The fact that only six public hospitals have been accredited by the Office for Health Standards Compliance requires urgent attention to avert the continued degradation of our health system. Similarly, the pilot projects commissioned since 2011 have shown how much leeway still exists in ensuring that the public healthcare system is functional enough to implement the NHI.

This attention to the detail of what would be required to ensure that the public healthcare system is fit for purpose has been a recurring theme among academic research groups and other well-meaning groups.

But one man’s meat is another man’s poison… the crisis in the public health system can mean that the NHI becomes a vehicle for a new scale of money-making — for medical aids, private commercial health and drug companies and private hospital monopolies.

In this veritable gold rush to now welcome the NHI as a site for accumulation, what is also coming through are vested interests for whom playing the “lets defend South Africans first” card is the slippery slope tumbling into xenophobia.

This is extremely ironic for South Africans, an irony noted by many commentators, who have drawn attention to the solidarity and support given by many African countries to host our exiled liberation movements.

But there are many other reasons which often escape comment.

Two important ones are, first, that disease and pathogens know no political boundaries and, consequently, nor do the health interventions required to address disease.

And, second, this country was built by foreigners from all over southern Africa who worked the gold mines on which this country’s industrial and social infrastructure is built. It is for these reasons that our Constitution makes no distinction in the Bill of Rights between South African citizens and foreign nationals who reside within the boundaries of the Republic of South Africa.

We need to emphasise the adverse implications of continuing a narrative that systematically disenfranchises foreign nationals and ensure that universal health coverage is just that: a healthcare system that knows no boundaries.

Glenda Gray is the president of the South African Medical Research Council, Fareed Abdullah is the director of the Office of HIV/TB Research at the SAMRC and Leonard Gentle is a consultant.

2018/10/24 12:38 PM
Health Minister Aaron Motsoaledi has addressed delegates at the Africa Health Business Symposium.
Health Minister Aaron Motsoaledi has cautioned African countries from emulating South Africa in trying to achieve universal health coverage. He says they must come up with their own strategies in ensuring that their citizens have access to quality healthcare regardless of their social status.

Motsoaledi was speaking at the Africa Health Business Symposium attended by delegates from 32 African countries and 16 countries outside the continent.

Delegates are discussing ways of bringing universal health coverage on the continent, an equivalent to the National Health Insurance locally.

Motsoaledi told delegates that 8 % of the South Africa’s Gross Domestic Product is spent on healthcare, with private health care sector spending 4 % on 15 % of the population and the other 4 % on 85 % of the population in public health sector.

He has acknowledged though that this is not sustainable.

“I was not more determined some three years ago than I am today, that this situation must change. The SA government was subsidising private healthcare for R46.8 billion in 2015. Within a period of 3 years that subsidy increased to R57 billion, but in the same period, the public healthcare system lost R9 billion because of the economic problems. What am I trying to tell you? When the economy gets bad those who are well to do are cushioned further and further and those who are poor are left behind.”

Motsoaledi has warned African countries against taking lessons from South Africa on this matter.

“Many colleagues, especially on the continent of Africa, believe the healthcare situation in SA is something to emulate. Don’t try something like this; it’s not working for us. It’s working for a very few people… don’t.”

The African Union Commission has encouraged South Africa and other countries to forge ahead with their plans to roll out whatever plans that will lead to universal health coverage.

“To achieve universal health coverage, we need synergies; we need to ensure that we do not establish two parallel health systems that will promote inefficiency, confusion and poor use of resources. It is the public sector responsibility to lead the way and provide an environment that promotes discussion between the two sectors,” says the Commissions’s Amira Elfadil.

The financing of the health systems is a challenge across the continent and partnerships with the private health care sector seems to be one of the options.

“Honourable minister, every organisation and delegate present here believes in health for all. We know the challenges are resources. It is not the what, but it is really the how and we are extending an arm of partnership on enabling us to achieve health for all even quicker,” says Africa Healthcare Federation’s Amit Thakker.

Motsoaledi has challenged heads of states to support their own health systems and stop seeking medical care abroad when they fall ill.
2018/10/24 01:19 PM
With the final implementation of National Health Insurance (NHI) fast approaching, the need for skilled nurses is in sharp focus and there is uncertainty on whether SA will be able to fill the gap in time.

Dr Sue Armstrong, a senior nursing lecturer at Wits University, told delegates to the Hospital Association of SA conference on Tuesday that NHI required a functional district health-care system to be effective. This was because prevention, early detection and disease treatment were done in district health systems, which would not run effectively without the required number of nurses.

"The major concern is that the professional nurses are an ageing group. If one takes population growth into consideration, not as many professional nurses are currently being trained as are retiring," she said.

At the heart of the problem is that there has been a delay in South African Nursing Council (SANC) approvals for private nursing education institutions.

The government trains 73% of SA's nurses through its colleges, but this is not enough to resolve the shortage.

"Also, the training of enrolled nurses and nursing auxiliaries has been stopped without having in place provision for training of nurses in the new qualifications, which has led to the decline in overall nurse numbers," said Armstrong.

Enrolled nurses provide limited nursing care, while enrolled nursing auxiliaries perform basic procedures and provide general care for patients. Both these types of nurses are supervised by registered nurses who also have their own nursing duties.

She said SA surpasses the UN's sustainable development goal (SDG) of 4.45 health professionals to 1,000 people, at 5.1.

However, the World Health Organisation found that countries that provide the best quality care have an average of 8.6 nurses to 1,000 people. Armstrong believes SA should meet that ratio for NHI to be a success.

"If nothing is done to remedy this situation, the number of nurses per population will fall below the SDG requirements by 2022," she said.

Private hospitals, including Mediclinic, Netcare and Life Healthcare, have committed to training 50,000 new nurses through the Hospital Association of SA. But if private hospitals and institutions manage to start training nurses only in 2022, it would take SA until 2059 to meet the SDG goals. The issue has been exacerbated by the closure of some nursing colleges in the 1990s to ensure racial integration in nursing education.

SANC did not respond to requests for comment.
2018/10/24 01:20 PM
South Africa’s largest hospital groups have rejected proposals that they be broken up in order to lower healthcare costs, calling the idea drastic and “perhaps unconstitutional”. In a bid to aid transformation and enhance competition in the market, the Health Market Inquiry, in its provisional report, has recommended divestiture and a moratorium on new licences for SA’s biggest hospital groups, Netcare, Life Healthcare and Mediclinic. The inquiry, which was set up by the Competition
Commission to investigate the private healthcare sector, together with the National Health Insurance Bill and Medical Schemes Amendment Bill, has raised questions about the future of health care in SA, particularly in the private sector, as the government ramps up its efforts to provide affordable, quality service. Divestiture would see hospital groups letting go of or selling some assets or business units. However, the recommendation does not elaborate on how the divestiture could work.


Speaking at the annual Hospital Association of SA (Hasa) conference in Joburg last week, Anthony Norton, director of law firm Nortons, said the recommendation was a nonstarter. Norton, who is representing Netcare at the inquiry, said the reference to divestiture is quite oblique in the report. He said it is raised as a potential consideration but there is not a lot of detail. He added that the recommendation could be in violation of the constitution. The recommendation for a moratorium means Netcare, Life Healthcare and Mediclinic would not be granted licences for new facilities nor permission to increase the number of beds in their existing facilities until the market share of each hospital group was 20 percent by number of beds. The inquiry found high levels of concentration in SA’s private hospital market, with the three groups accounting for 90 percent of the market in terms of hospital admissions and 83 percent of registered beds.

Under pressure

The inquiry’s recommendations come as the share prices of some the country’s largest hospital groups are under pressure. Life Healthcare’s shares have weakened 8.70 percent in the past year, while Mediclinic’s valuation has plunged 26.78 percent over the same period. Netcare has dropped by 4.38 percent. Norton’s views on divestitures were echoed by Prof Nicola Theron, managing director at Econex, a competition and applied-economics consulting firm. Speaking on behalf of Mediclinic, Theron questioned the inquiry’s methodology, saying there was a disconnect between factual investigation, the evidence and the recommendations. She said the inquiry had made use of an outdated economic framework and that its structural findings of high concentration in the hospital market were not enough to warrant intervention. HMI panel member and economist Cees van Gent said he could not discuss the details of the recommendation while the consultation process was still under way. However, he said he was aware that the hospital groups had raised questions about the divestiture issue and emphasised that it was more of a suggestion than a recommendation. Van Gent defended the methodology saying that the inquiry was broad, unlike a competition enforcement action. He added that the inquiry had also looked at the market structure to see if it was guaranteeing the best performance for the patient in the future, or whether it could warrant any anti-competition actions.

Barriers to Entry

Barriers to entry played a big role in the market concentration of the big three hospital groups, said Van Gent, adding that having only three major private hospital groups made it easier for collusion to take place. Van Gent added that patients should have more choice when selecting hospitals. To put the issue into perspective, he said, the Netherlands, where he lives, has 60 to 70 independent hospitals for patients to choose from. Of the population of about 16-million people, almost 9-million make use of private hospitals. The dominance of the big three has also had an impact on medical aid schemes, which are compelled to enter into contracts with all three hospital groups. Van Gent said if the schemes could bypass the bigger hospitals to make use of others, which may be more affordable for their members, then the hospital groups might refuse to service their members in parts of the country where they were dominant and that leaves the three parties with quite a bit of clout.
2018/10/23 03:22 PM
A lot of the work contained in the Health Market Inquiry’s (HMI) Provisional Report is deficient and defective and needs to be reviewed to determine whether the real evidence supports the findings and if certain recommendations are appropriate, practical and feasible. This is according to Anthony Norton, Director of law firm Nortons Inc who has been representing Netcare in the work around the inquiry.

He was one of two speakers delivering an expert opinion on the HMI report at this week’s HASA conference in Johannesburg. Norton and Econex MD, Prof Nicola Theron (on behalf of Mediclinic)
expressed serious concerns about the report, particularly around the findings relating to the concentration of the three major private hospital groups, supply-induced demand and pricing,  and recommendations proposing the establishment of a supply-side regulator, divestiture by the three major hospital groups and price regulation.

They pointed out that old data were used to come to conclusions of market concentration, showing that since 2014 the total market share of Netcare, Mediclinic and Life Healthcare has shrunk to below the almost 90%, indicated in the HMI report, to around 75% as hospitals in the National Health Network (NHN) and other independent hospitals added almost 1297 new beds compared to the total of 846 beds added by the three biggest groups. Data on hospital beds used by the HMI only cover 2010 to 2014.

“It is most concerning that the HMI recommends drastic interventions such as divestiture and a licensing moratorium to be implemented probably by next year, based on 2014 and incorrect data,” Theron said. “If you correct for the errors in the HMI database and the beds that were excluded in the HMI analysis, you find that while there is still concentration, it is only moderate.”

She referred to the Competition Act’s definition of market power that places it between 35% and 45% with interventions only recommended when it is more than 45%.

“Not even in the HMI analysis, one of the hospitals crosses the 35%, indicating that there is no evidence for the inquiry’s conclusion that the market is ‘highly concentrated’”, Theron noted.

Norton agrees that the HMI report doesn’t provide any evidence of market power abuse or dominance by the three main groups, excessive profits or that there is a causal link between concentration in certain areas and supply-induced demand.

“Our analysis shows that post 2014 there has been in fact a de-concentration of the private hospital market,” Norton said.

According to Norton, the recommendations of divestiture and a moratorium on the issuing of licenses to the big hospital groups until their market share falls to 20% are unfair, unconstitutional, are not supported by any findings in the HMI report or real evidence, and lacks detail.

“If you start putting artificial caps on people’s ability to expand beds in hospitals or to get new licenses you may have a whole bunch of unintended consequences such as not being able to serve consumers appropriately,” Norton said.

Referring to the proposed regulation of prices, Norton pointed out that the HMI’s profitability analysis showed no evidence of excessive profits that warrants price regulation.

“Economic regulations tell us that price regulation should only occur in exceptional cases – when you have statutory monopolies or serious evidence of abuse of dominance. This doesn’t exist here –
there are no monopolies in the private healthcare market and findings of dominance. So, the evidence doesn’t warrant price regulations, while the often unintended consequences such as a reduction in the quality of service, innovation and entry hasn’t been considered,” Norton said.

He also raised serious concerns about the proposals around an independent Supply-side Regulator to be established by the Minister of Health, its functions and the suggestion that it should be in charge of price negotiations between the respective parties to ultimately determine prices. Not only does the National Health Act not allow the Minister to set up a new regulatory body, it will also be expensive and complicated to be established and staffed.

“Why don’t we get existing regulatory bodies to do it and force them to do their jobs properly, and more efficiently and effectively? The HMI has found that some of the current regulators are inefficient – how can we assume this one is going to be different and that it will be able to deal with complicated jobs such as price regulation?

“I think the HMI has got to carefully reconsider its analysis that supported some of the conclusions and the real evidence and make an objective assessment,” Norton concluded.

According to Theron, there is no denial that there is something wrong with the system. “However, in an inquiry like this that recommends dramatic intervention like divestiture, conclusions must be substantiated by real evidence and facts. If not, it is simply going to create more problems which are not going to foster competition or efficient outcomes,” she noted.
2018/10/23 03:22 PM
Christine Botha says failure to do so would be departure from fundamental constitutional values
National Health Insurance: Running Before Crawling – The need for objective reassessment of the pilot phase – Part II

In Part I of the series on health reform and the draft National Health Insurance Bill (NHI Bill), the Centre for Constitutional Rights (CFCR) argued that considering the anticipated costs of the NHI and lack of crucial detail, South Africa needs to urgently assess alternative models to address the healthcare crisis. In Part II, the CFCR assesses the lack of information on the results of the NHI pilot phase, which is supposed to inform the further roll-out of the NHI.

The NHI Bill aims to revolutionise healthcare provision in South Africa by replacing the current two-tiered healthcare financing with the establishment of the NHI fund, which will be the single purchaser and financier of the population’s personal health services. The NHI, according to the NHI Bill, is envisioned to be rolled out in three phases spanning over 14 years, with the first phase extending from 2012 to 2017. The second phase is accordingly from 2017 to 2022. The final phase is from 2022 to 2026.

The 2015 White Paper: National Health Insurance for South Africa (NHI White Paper) furthermore provided that the initial phase, the pilot phase, would focus on strengthening service delivery systems in Primary Healthcare (PHC). This would accordingly be done through Municipal Ward-based PHC Outreach Teams; the Integrated School Health Programme; the District Clinical Specialist Teams and lastly through contracting non-specialist health professionals (general practitioners). Phase One logically provides the springboard from which NHI will develop and the NHI Bill provides that in Phase Two these strengthening initiatives will continue to be implemented. This however begs the question whether the strengthening initiatives for the health system were successful and whether this approach indeed provides the blueprint for the further roll-out of the NHI. The NHI Bill is oddly silent about the need for an objective assessment of Phase One and evidence-based results are not as transparent as one would expect.

The 2011 National Health Insurance in South Africa Policy (NHI Green Paper) stipulated key points with estimated time-frames to be addressed in the initial phase. This included management reforms and designation of hospitals; piloting initial work in 10 districts; the audit of all public health facilities; the establishment of the Office of Health Standards Compliance (OHSC) and focusing on increasing the supply of doctors, nurses and pharmacists.

In March 2012, in line with the NHI Green Paper, the Minister of Health (the Minister) announced the 10 NHI pilot sites nationwide. The objectives of the pilot sites included testing whether the healthcare system initiatives would in fact advance quality healthcare and to assess the utilisation patterns and affordability of implementing such a primary healthcare service package. The roll-out of the NHI nationwide therefore hinged on the success of the pilot phase.

A direct National Health Insurance Grant was created in 2012/13, specifically for the pilot project and it has been increased annually from R150 million, to R250 million to R500 million by 2014/15. In 2013/14 a further indirect National Health Grant (with a National Health Insurance component) was created. According to a 2015 National Treasury report-back to Parliament, the indirect grant was created to deal with the underspending and poor performance of the direct NHI grant. The indirect grant initially focused on funding the contracting of general practitioners to assist in public clinics.

The pilot phase was supposed to end in 2017. The results of Phase One, however, appear not to be available in a public report and it requires a consideration of various reports to piece a picture together. In June 2015, Parliament’s National Council of Provinces’ Committee on Appropriations was briefed by both National Treasury and Department of Health delegates on the NHI pilot expenditure. It became evident that the NHI direct grant was initially greatly underspent and in 2014/15 the Eastern Cape spent only 19.9% of its allocation. The reasons cited for this state of affairs included lack of coordination on NHI pilots across national, provincial and at local level with development partners, and inflexibility of the grant. The target of contracting 900 general practitioners by 2014/15 via the indirect NHI fund was also not met and it appears that only 253 were placed during that time.

In August 2015, the Minister also gave an update on the NHI pilot sites to Parliament’s Health Portfolio Committee and he specifically highlighted plans on the revitalisation and maintenance of 152 Eastern Cape clinics to be transformed to “ideal clinics”. In terms of the presentation, construction timelines of eight new clinics in the Eastern Cape were specifically presented. Lusikisiki Clinic was one such clinic. Its construction, according to the presentation, had to commence on 17 July 2015 and be concluded by 16 October 2016.

The appalling conditions of Lusikisiki Village Clinic, which was housed in a tent and mobile unit, caused a great uproar in 2013, highlighting the desperation of this project. However, from media reports in December 2017, it appeared that the construction was only concluded in August 2017 and it was still not open for service in December 2017.  Furthermore, the 2016/17 annual inspection report of the OHSC included the inspection of eight NHI pilot site districts, of which the Vhembe District had the lowest average performance score of 42%. It is worth noting that the OHSC’s report also noted that “the performance scores for NHI pilot districts were not significantly different from those of non-NHI pilot districts”. It is therefore clear that there is a great need for a proper assessment of Phase One.

The NHI proposal is highly ambitious but for it to stand any chance of transforming healthcare, it is crucial that the public be provided with a transparent objective assessment of Phase One to test whether this is indeed the solution to the current healthcare crisis. A failure to do so will be the greatest obstacle to the State’s commitment to the provision of universal health coverage. The failure to effectively communicate the results and apparent failures and delays in implementation of Phase One is a departure from fundamental constitutional values.

The founding values of the Constitution establish an accountable and responsive system of governance. The values and principles underpinning public administration require the efficient, economic and effective use of resources, together with providing the public with timely, accessible and accurate information. By any measure, the implementation and management of the NHI pilot phase fails the constitutional standard.

*In Part III, the proposed NHI governance concerns will be analysed.

By Ms Christine Botha, Legal Officer, Centre for Constitutional Rights, 4 October 2018
2018/10/23 03:24 PM
Bonitas announced a weighted increase of 8.9% for 2019 despite a challenging year for the healthcare industry, against a backdrop of uncertainty around the NHI, the recent Health Market Inquiry and current tough economic conditions faced by consumers, according to Gerhard Van Emmenis, principal officer.

He says the past 12 months have been extremely trying, with a number of uncertainties and changes anticipated. In addition, consumers have been heavily impacted by the increase in VAT and escalating prices which resulted from this.

In July Bonitas announced its financial results for 2017, the best in its 35 year history, with a solid surplus of R730.20m, having recouped a deficit of R16.9m from 2016. "This turnaround was due to several key cost saving strategies," says Van Emmenis.

"It bolstered our reserves from R3.1bn to R4bn, which means that we are able to invest back into the scheme and offer our members access to healthcare of the highest quality.”

The fund has announced a number of additional benefits for its members for 2019.

"We know it's not only the monthly premiums that affect consumers' pockets but the value they get out of their medical aid plan.

"Some of the benefits have been tweaked, others increased, one plan has been discontinued and two new options have been introduced, all aimed at helping members take control of their health and lead better lifestyles.

"We continue to seek partnerships with healthcare providers to ensure we are part of the same value chain, rather than being part of the supply and demand of the healthcare economy," says Van Emmenis.

"In addition, we are focused on educating role players to balance affordability, quality and cost efficiencies. We are developing an incentive model to motivate service providers to eliminate activities that do not add value to members.”

Over the past few years, Bonitas has taken a multipronged approach to cost saving, focusing on:

• Hospital claims account for half of Bonitas' annual claims, about R6bn a year. For this reason the scheme negotiated a pricing structure with the main hospital groups to deliver a savings of R242m last year and projects this saving will increase to about R550m over the next two years.

• Bonitas places great emphasis on managed care initiatives to help members with chronic conditions manage their health better. It takes into account the best clinical and treatment protocols while containing costs. Bonitas' back and neck, oncology, hip and knee and HIV AIDS programmes continue to offer members emotional, clinical and financial support.

• The Council for Medical Schemes CMS cites chronic conditions with diabetes in particular as one of the key contributors to a rising disease burden in SA and escalating healthcare costs. Eighty percent of the scheme's diabetic patients have associated chronic conditions such as high blood pressure and cholesterol, heart disease and depression which need to be managed. Through the scheme's diabetes programme, hospital admissions related to diabetic patients having reduced by 11.6% year on year.

• Bonitas has a keen focus on preventative care as early detection is a critical factor in ensuring members get the support they need to manage serious conditions timeously.

• Last year, the scheme kept a firm focus on women's health, introducing cover for pap smears on all its plans. Since cervical and breast cancer continue to be most prevalent, Bonitas has continued its efforts towards early detection by ensuring mammograms for women over 40 will be covered once every two years on all plans from 2019.

• The scheme has also placed the spotlight on men's health, especially in light of a prevalence of prostate cancer, by adding the prostate screening antigen test to all options for men aged between 45 and 69.

• Bonitas has SA's largest GP network which ensures that members get value for and stretch their benefits. The scheme's online provider locator tool has been enhanced so members can find network hospitals, doctors and specialists in their area quickly.

• Bonitas' ongoing efforts to reduce fraud, waste and abuse have been successful, with a number of convictions and sentencings. This significant focus delivered recoveries of R31.2m with a potential preventative savings of R75m. The scheme will continue to ensure that all outstanding money is successfully recovered and repaid to the fund, so that it can be put to better use to benefit members. Van Emmenis says digital remains a key driver for member and broker communication with a newly introduced corporate zone available on the website. The online application has been revamped with the introduction of an electronic membership and a live chat function has been added to assist current and potential members with any questions they may have.

"Besides enhancing the Member Zone as from January 1 2019 members will have access to the Bonitas App a revolutionary cellphone application that will offer the full benefits of the member zone, making it easier for members to view their benefits and claims as well as submit claims, obtain authorisation, find a network provider, resolve queries and so much more while on the go.

"As a value add for members, Bonitas has aligned with strategic partners to offer a comprehensive, holistic solution to help members take care of their financial health and wellness, without paying extra, This is not another loyalty programme, but real added value aligned to member needs, with no fee or points scoring."

2018/10/23 03:25 PM
As medical schemes, members and employers brace for the 2019 financial year, they do so against the backdrop of a technical recession, a VAT increase, petrol price increases and marginal legislative space to innovate.

In what is generally termed 'the roadshow period' medical schemes are announcing their 2019 increases but are quick to share the lengths they have gone to in order to contain costs and improve their value proposition.

Medical scheme benefits and savings accounts have always been difficult to decipher. It won't get any easier as schemes push the envelope by redesigning benefits, re-engineer their networks and entice members into closer partnerships. Discovery, the country's largest open scheme and covering about 2.8 million beneficiaries estimates total medical inflation for 2018 at between 11.2 percent and 12.2 percent, but assures that its, risk management and Vitality wellness will reduce members' medical inflation by 2 percent and contain contribution increases accordingly.

It and other leading schemes have announced new plans or a rejigging of original ones. One being Aon South Africa's entry point plan, KeyCare Start. Fedhealth is talking about "a revolutionary funding model which can save members up to 25 percent of their monthly contributions." Jeremy Yatt, Principal Officer, explains that traditionally, as much as a quarter of members' annual contributions are placed in their fund's medical savings account effectively as a loan and used to pay for day to day benefits.

The member is then required to repay this loan over 12 months irrespective of whether the member needs this amount or not. In an innovation he predicts others will be quick to copy, the new models allow members to only start paying for their day to day benefits if and when they actually need them. When they do access the funding payback is over 12 months and interest free.

It is, Yatt shares, a response to the findings and recommendations highlighted in the provisional report issued by the Health Market Inquiry. Fedhealth also offers a reduced monthly rate based on each member's unique profile and the core benefit bundle they select.

Bonitas, who reports a major uptick in its reserves 4 billion, has announced a weighted 8.9 percent increase with added and tweaked benefits, despite a challenging year for the healthcare industry. Principal Officer Gerhard Van Emmenis speaks of how the fund continues to work at reducing healthcare costs by seeking partnerships with healthcare providers, being part of the same value chain, rather than being part of the supply and demand of the healthcare economy.

There is a focus on educating role players to balance the triangle of affordability, quality and cost efficiencies. He also places hospital negotiations, attention to fraud, waste and abuse as well as managed care high on the priority list. The scheme is also poised to introduce an App to make it easier for members to view their benefits and claims as well as submit claims, obtain authorisation, find a network provider and resolve queries on the go. Medihelp, which reverted to self-administration two years ago, received the highest rating from its members in terms of overall customer satisfaction in an independent South African Customer Satisfaction survey released in August.

Principal Officer Heyn van Rooyen ascribes this to 'a turnaround strategy implemented to create product stability through an enhanced product offering and increased competitiveness whilst maintaining high levels of service delivery." SAcsi's Perceived Value Index has Medihelp with an improved rating from 70,9 percent to 73,6 percent compared to the industry average which dropped from 71,6 percent to 69,4 percent.

It seems that as the going gets tough the tough get going. Just as well, in June Health Minister Aaron Motsoaledi announced sweeping changes to the Medical Schemes Act as he seeks to align it with the planned National Health Insurance. The proposed changes include abolishing the rule of co-payments and the practice of labour brokers within the medical scheme environment.

Pre scribed minimum benefits would be replaced with a comprehensive benefits package. His aim, he says, is to allow medical aid clients to get better value for money from their service provider. Other changes include the introduction of a system subsidisation model, changes to the cancellation of member ship and waiting period and also an end to unequal benefit options.


As consumers battle to make ends meet, an often overlooked SARS rebate is the Medical Fees Tax credit. It is worth taking into consideration when assessing a monthly contribution spend and applies to fees paid by a taxpayer to a registered medical scheme or similar registered scheme outside South Africa for that taxpayer and his or her "dependants", as defined in the Medical Schemes Act.

For example, the 2018/2019 SARS year of assessment allows R310 a month each for the person paying the scheme as well as R310 a month for the first dependant and R209 for each additional dependant.
2018/10/23 03:26 PM
The National Health Insurance (NHI) is not a radical shift to dismantle a functioning system, but an opportunity to review two poorly functioning ones. The public sector sees very high volumes of patients but gives them bad service and produces very poor outcomes. The private sector is modelled on low volume, high cost care - it uses its huge quantities of resources badly, to service very few people.

As the Health Market Inquiry (HMI) report makes clear, the large commercial medical schemes are resisting needed reforms that with better productivity would lead to the convergence of the two systems. In particular, they persist with an outdated tariff system that pays for services not outcomes and doesn’t support team-based delivery models. This is probably because it threatens their claim payment and ‘managed care’ role that justifies a very high income. This strategy is counterproductive for their members.

South Africa cannot move forward socially or economically without convergence. We need a high functioning universal healthcare system – which can provide high volumes of quality care at low cost. One that uses all available resources, assigns funding according to need and rewards value (the best outcomes, at the lowest costs) when it is delivered.

The challenge for all stakeholders is how best to transition to such a system – one that places patients at the centre of its model, with service by multidisciplinary teams providing continuous and proactive care. The transition must be compelling and safe for clinicians. It must be an attractive vision, have realistic milestones and pose no threat to clinician income. It must produce a system that is affordable for all South Africans.

The NHI proposition

This is what the NHI proposes to do – it has as its premise the separation of the supply of healthcare from the role of an agency purchasing it, in line with international best practice. Since 2000, medical schemes have been cast in the role of purchaser, but none have taken it beyond pursuing good prices from providers. Instead of actively commissioned new highly productive models, they have overseen rapidly rising premiums. The HMI report vividly describes how schemes have failed their members by not buying overall value for money, despite the reform road being perfectly clear.

The purchaser role put forward by the NHI is the proper one, however – with providers competing for contracts from a large purchaser, based on the value they deliver. It sets out to quickly drive vast improvements in how care is delivered to bring down the cost of comprehensive medical care. It plans for a major shift towards community-based care, instead of today’s hospital plans. It supports widespread multidisciplinary teamwork - a much more effective and cost-efficient model.

Call to action

The NHI is not a move to dismantle the commercial sector – it’s a call to action for much-needed reforms. A commercial sector that offers high value services will provide them for an NHI purchaser, which has no preference for publicly owned, commercial or not-for-profit providers. Made subject to market competition, public sector services will need to tremendously improve their delivery of care or face losing their funding.

We need to acknowledge that, as it currently stands, neither system produces good value, essentially because they are badly structured. They are built around the convenience of clinicians - bringing sick patients to multiple hospitals, clinics or private rooms for care. Doctors are paid and work as individuals, which hinders multidisciplinary input and results in reactive rather than proactive healthcare. Both systems have poor process management, which cannot manage patients with multiple problems. In different ways, both have badly misaligned incentives for the practitioners who work within them.

Healthcare stakeholders must get out of the weeds and stop resisting change by disputing unspecified details of the proposed NHI. We urge stakeholders to rather embrace the NHI as a framework, as a step in the right direction, one that will spur the sector to action, and out of its current stasis.
2018/10/23 03:27 PM
They want a say over what their cover should be and how benefits are used, writes Alf James.

In a first for the medical scheme industry, Fedhealth has announced its 2019 benefit options, which feature a revolutionary new approach to benefits that provide consumers with more flexibility, choice and control.

According to Jeremy Yatt, principal officer of Fedhealth Medical Scheme, the recent findings and recommendations highlighted in the provisional report issued by the Health Market Inquiry underline the need to change the way medical scheme options are designed. He says although there is little room to manoeuvre due to legislative constraints, medical schemes should find ways to empower members by addressing their concerns around affordability, transparency and flexibility. "The inquiry's provisional report highlights the urgent need for change and it's time for the medical schemes to step up to the plate," says Yatt.

Over the past six months Fedhealth carried out extensive research with its member base and the overriding message is that members want to be in control they want flexibility and they want choice. "Members want more of a say over what their cover should be, how their daily benefits are used and they don't want to pay for benefits they are not using,” says Yatt.

"Therein lies the opportunity. There is not one medical scheme in SA that offers that level of flexibility," he adds.

Based on the research with its member base Fedhealth has developed a range of benefit packages giving members control of their medical aid by offering improved flexibility and choice by changing the scheme's approach from one of funding to financing. There are four different benefit packages within Fedhealth's new FlexiFED range each featuring a core benefit bundle and day to day cover, but the most innovative feature of the FlexiFED range is the way members are able to choose to pay for day to day benefits.

"Traditionally, up to 25% of the members' annual contributions have been placed in a medical savings account effectively as a loan which was used to pay for day to day benefits: explains Yatt.

"For the first time, Fedhealth has turned this model around. FlexiFED allows members to begin paying for day to day benefits only when they need them. When they access this funding will they have the flexibility to pay back that amount over 12 months, interest free. At a time when most consumers are struggling to make ends meet, this can make a meaningful difference to their financial position. This is a significant departure from how other medical schemes in SA manage their medical aid savings accounts.

"Traditionally members have been charged for day to day benefits from the beginning of the year regardless of whether they have seen a doctor or purchased medicine or not.

"Fedhealth is now the only medical aid to offer members a significantly reduced monthly rate by introducing the MediVault and Wallet.

"Based on their unique profile and the core benefit bundle they select, a pre-approved amount is placed in the member's individual MediVault at the beginning of the year.

This amount is not pro-rated and works the same as a traditional savings account, except that members only pay for it once they use it "When the member needs to pay for day to day expenses, they simply transfer the funds they need from their MediVault into their Wallet and only then start paying back those funds, without having to pay interest," says Yatt.

"When it comes to medical aid, we know price is one of the most important considerations for members.

"We worked hard to find innovative ways to save members money and provide them with the benefit of added choice. Our solution has been to offer four core benefit bundles, specifically tailored to different lifestyle requirements and which can be personalised even further to suit individual needs."

Yatt says the flexiFED 1 benefit bundle is perfect for healthy, young single people looking for affordable, quality cover. Personalised benefits like trauma treatment, unlimited accident and emergency treatment and female contraception have been added.

FlexiFED 2 is more suited to young families starting out and this option is now rich in maternity benefits and some great lifestyle and childhood benefits.

FlexiFED 3 has been tailored to young families making their way up in the world and also includes rich maternity, lifestyle and childhood benefits for families who are still growing.

Finally, flexiFED 4 has been designed for more mature families looking for all-inclusive cover.

Personalised benefits like specialised radiology, child rates up to the age of 27, unlimited network GP consults from core benefit bundle and unlimited private hospital cover for planned procedures are just some of the features offered.

All core benefit bundles come pre-packed with value added benefits covered from Risk, not from the MediVault and Wallet. Fedhealth has introduced a "benefit maximiser" to boost the above benefits.

On flexiFED 1, 2 and 3 it covers unlimited network GP visits and dentistry benefits even after a member's MediVault and Wallet has been depleted.

On flexiFED 4, claims can be submitted to accumulate to a predetermined threshold level, after which they will be paid from the benefit maximiser with a 20% co-payment on all claims.

The final benefit for members is that they have the flexibility to choose to control their own rates. Once they have selected their core benefit bundle they can personalise their options and create the package of benefits they need at a price they can afford.

"Members save 11% of their contribution by selecting the Network Hospital Option GRID or they can save 25% by limiting themselves to a smaller hospital network or just by paying an R11,500 excess for planned procedures at a hospital of their choice. The important thing for members to remember is that in the event of an emergency or accident they can still use the private hospital of their choice.

"FlexiFED represents a new approach. We believe it is going to transform the industry and change the way medical aid benefits are structured in the future,” says Yatt. Fedhealth also proposes to redouble its efforts to educate members.

"There are a number of claims trends which can be curbed through consumer education,” says Yatt.

"There is an increasing incidence of members opting, as their first course, to visit an expensive specialist when a general practitioner would more than suffice. Lifestyle diseases such as diabetes and heart disease are rampant.

"Underpiming our innovation is the desire for people to take charge of their health and their finances but also to educate people who irresponsibly abuse their health.

"With our 'financing' model, as opposed to the traditional 'funding' model, there remain financing options whereby an individual can set aside money for a health catastrophe either by saving the money for it, or by borrowing and repaying.

"We have cracked the mould by developing a mechanism whereby members can access a type of financing when they need it, but don't have to fork out money if they don't. This is a huge departure from how other medical schemes in SA currently manage their medical aid savings accounts," says Yatt.
2018/10/23 03:27 PM
Costs relating to medicines and consumables represent a substantial portion of healthcare expenditure in the private and public healthcare sectors. However, there are a number of areas in which meaningful savings can be achieved, according to Rentia Myburgh, group sales and marketing director of Medipost Pharmacy.

"The growing prevalence of chronic and multiple diseases is in large part a product of an ageing population. However, the marked increase in diseases brought on by poor lifestyle and dietary choices is also a significant driver of high medicine usage and expenditure," she says.

As is noted in the 2016 17 annual report of the Council for Medical Schemes, medicines and consumables dispensed by pharmacists and providers other than hospitals amounted to as much as R23.95bn or 15.84% of total healthcare benefits paid. This represented an increase of 4.65% compared to the R22.89bn spent in 2015*.

Within the medical schemes context the difficulty with soaring costs such as these is there is a knock on effect on membership contribution rate increases, which in the present economic climate and against the background of rising unemployment pose a major threat to the sustainability of the healthcare industry.

"However, unlike most other costs this is one of the few areas where substantial savings are still readily attainable," she adds.

According to Myburgh, Medipost, which is one of the largest pharmacies registered with the South African Pharmacy Council, delivered close on R2bn in medicine and consumable items to healthcare consumers between September 2017 and August 2018.

"The free courier service offered by Medipost not only ensures patients have reliable, timeous access to chronic medicines, but also achieved additional cost savings of about 5%, which amounted to a saving of close on R92m within the local healthcare industry."

Medipost achieved savings on behalf of clients in the following ways:

Medical schemes saved substantially because of the highly competitive professional fees offered by Medipost.

Patients were offered more affordable generic equivalent medication, below the specific reference price of each individual scheme. In the case of a large Medipost medical scheme client, a saving of close on R3m was derived in the space of a single month this year. The same scheme achieved savings in medicine costs of almost R16m over a three month period.

As an extension of the Medipost service offering, patients are given guidance on how to correctly follow the authorisation processes of their medical schemes so that their medication is claimed from the correct benefit thereby conserving their day to day benefits. In this way members can derive the best possible value for their healthcare rand.

It is critical that medicine for chronic conditions, including hypertension, diabetes, cancer and HIV, is taken exactly as prescribed without interruption. Medipost goes to great lengths to help ensure full adherence to a treatment plan is as easy and cost effective as possible.

"Reduced costs coupled with improved accessibility are key within the healthcare industry. Empowering patients with the relevant information is central to our philosophy of promoting equitable and accessible healthcare services.

“We strive to enhance patients' understanding of their medication related healthcare benefits, the effective use thereof and the importance of following treatment programmes prescribed by healthcare professionals. We provide advice in all 11 official languages to ensure that important information is effectively communicated to members,” says Myburgh

"Many of the patients making use of Medipost Pharmacy appreciate the convenience of having access to telephonic advice from pharmacists in a familiar environment, which is an integral part of our offering."

*CMS annual report for 2016 17 Much can be done to cut costs Free courier service, generic equivalents and competitive fees help pharmacy to pass on savings.
2018/10/23 03:28 PM
The South African Medical Association Sama says the National Health Insurance NHI Bill and other parallel reform process do not seem to have the interests of health providers at heart.

In its September 2018 submission to the National Department of Health in respect of the NHI Bill, Sama says regrettably NHI is being implemented in an environment riddled with chronic shortcomings in the public health sector.

"Evaluation reports of the NHI pilot programme show that many pilot facilities fell short on a range of issues, typifying the severe challenges in the public healthcare system. Challenges identified in the pilot sites include PHC re-engineering still incomplete; district clinical specialist, ward based outreach and school health teams not fully constituted; insufficient staff; lack of capacity; supply chain hurdles; delays in getting information on budget codes; limited delegations; lack of support and inability to spend on infrastructure.

"Moreover, some essential aspects of NHI that were not piloted are to be 'experimented with' in the real NHI. The failures of the NHI pilot programmes have been widely reported. Sama questions the rationale of proceeding with implementing NHI when the public health system is in crisis and in the absence of adequate governance and accountable structures, particularly on quality of care received by citizens.

"Government interventions to improve the state of public health systems have been insufficient to bring about the required change and, given the lack of progress and the level of the economy, it is impossible for the government to put in place the infrastructure required for an effective NHI within the proposed time frames. Is it the intention that the NH! Fund is to be responsible for infrastructure improvement? For the NHI to be successful, the current state of the public health system cannot remain."

Sama says the bill does not define the concept of "quality of care", nor does it clearly spell out how the different dimensions of quality will be measured. Improvement of quality of healthcare should be a key priority in NHI. The World Health Organisation recognises the urgent need to place quality care at the centre of country, regional and global action, and notes "the success and value of universal health coverage depends on its ability to provide quality services to all people".

Sama is concerned by the limited quantity and quality of consultation of health professionals on NH!, which the association says is unacceptable and counterproductive. Sama is concerned about lack of medical professionals representation in platforms such as the NHI implementation bodies. Therefore, it calls for a re-opening of NHI consultations with doctors and the wider society, to allow the profession to register its concerns and propound its ideal NHI model.

These consultations, which Sama says must be instituted by Parliament, should resemble the ongoing land appropriation hearings, and must be at provincial level provincial NHI workshops or imbizos, Sama says a "Codesa" for NHI should be instituted to allow exhaustive debate.

"Such consultations will also enable the government to hear views and concerns at grassroots level (i.e. from patients and the community) , many of whom do not, or have struggled to, understand NH!." Sama says it is unwelcome that much of the NHI detail will be in the regulations; more details are needed on contracting, accreditation and reimbursement; and there is a need to get participation by the private sector expertise on board to improve the management, quality and efficiency of care in government hospitals.
2018/10/24 12:03 PM
A successful liver transplant from an HIV-positive mother to her critically ill HIV-negative child could unlock a whole pool of new donors.

At a press conference on Thursday, Minister of Health Dr Aaron Motsoaledi said the success of the procedure would open up policy discussions on whether an HIV-positive person could donate organs.

Motsoaledi called the operation an "amazing breakthrough in science".

Wits University wrote in a statement on Thursday: "In 2017, doctors from the transplant unit at the Wits Donald Gordon Medical Centre performed what is believed to be the world's first intentional liver transplant from a mother living with HIV to her critically ill HIV-negative child, who had end-stage liver disease."

The team of doctors included Professor Jean Botha, Dr Francesca Conradie, Dr Harriet Etheredge, Dr June Fabian and Professor Caroline Tiemessen.

Although doctors are unsure of the HIV status of the child a year on, they are excited about the success of the transplant.

"Two aspects of this case are unique. Firstly, it involved the intentional donation of an organ from a living HIV-positive individual. Secondly, pre-exposure prophylaxis (medication to protect at-risk individuals from contracting the HI virus) in the child who received the organ, may have prevented the transmission of HIV. However, we will only know this conclusively over time," Botha, the transplant surgeon said.

The transplant of the mother's liver to her child, who had been on the waiting list for a deceased donor for 180 days, was approved by the human research ethics committee (medical) at Wits University.

"Transplanting HIV-positive organs is not illegal in South Africa. However, it is not considered best practice internationally because of the risk of HIV transmission to the recipient. To minimise risk to donors and recipients, this operation is offered only under exceptional circumstances," said Etheredge, a medical bioethicist.

The mother asked the team several times to be given an opportunity to save her child's life after the child had been waiting longer than the normal 45-day period. In this case,” quantifying the risk was simpler for the transplant team".

Conradie, an HIV clinician, noted that "when considering an HIV-positive parent, it is important that they have an undetectable viral load. This means that they know they are HIV-positive and that they have been taking their antiretroviral medication properly for at least six months.

According to Wits University, "the Wits Donald Gordon Medical Centre is the only transplant programme doing living donor liver transplantation in southern Africa".
2018/10/24 12:03 PM
In what is believed to be the first in the world, researchers at Wits University have transplanted a liver from an HIV positive mother to her HIV negative child.

The child, who at the time of the transplant was 13-months-old, and her mother cannot be identified as part of doctor-patient privacy.

Doctors at Wits Donald Gordon Medical Centre said the child had Biliary Atresia and needed a liver transplant.

As a result of a shortage of donated organs, the child who was critically ill couldn’t not receive one.

The mother volunteered to donate the liver.

“Two aspects of this case are unique. Firstly, it involved intentional donation of an organ from a living HIV positive individual. Secondly, pre-exposure prophylaxis [medication to protect at-risk individuals from contracting the HI virus] in the child who received the organ may have prevented the transmission of HIV.

However, we will only know this conclusively over time,” said Jean Botha, Director of Transplantation at the Transplant Unit at the Wits Donald Gordon Medical Centre.

He said going into the transplant they believed the child would be HIV positive. But now, a year after the transplant and numerous tests later, doctors have not been able to find any active HIV infection in the child’s blood stream.

The baby is currently on ARVs and the doctors are still debating whether to remove the child from the treatment or not.

“At the moment, we are developing new methods for testing the child, and we hope to be able to have a definitive answer to the question of seroconversion in future.  For now the child will remain on ART until we have a more comprehensive picture,” said Professor Caroline Tiemessen, Researcher Professor at the Wits School of Pathology.
2018/10/24 12:04 PM
Wits University doctors have conducted South Africa’s first HIV positive organ transplant to an HIV negative recipient‚ giving a liver to a 13-month who otherwise would have died.

The baby was born HIV negative from a positive mother‚ but had a liver disease.

The infant was dying and had waited more than 180 days for a liver.

“The window of opportunity [to save the life] was closing‚” said Jean Botha‚ head of transplantation at Wits Donald Gordon Hospital.

Because of a shortage of organs‚ Wits started a living liver donor programme from 2013‚ he explained.

"The availability of organs has not kept pace with unrelenting demand."

Botha‚ a surgeon‚ said a living donor’s liver returned to the original number of cells within six to eight weeks after a segment of it was donated‚ so it didn’t disadvantage them.

But all donors used in the programme have been HIV-negative.

The University of Cape Town already uses HIV-positive organs from deceased donors for living patients who are HIV positive.

Scientists believe this is the first time worldwide that a positive organ has been used for a negative person.

Scientists consulted widely to determine if it was ethical and an ethical committee at Wits made the decision to go ahead‚ taking into account the child’s family’s wishes.

“The child would otherwise have died‚" said Botha.

The child was given preventative antiretroviral treatment the night before the operation‚ which took place in 2017 – and afterwards to prevent HIV.

They didn’t know if the preventative treatment would work when transplanting an HIV positive organ‚ said HIV specialist doctor Francseca Conradie.

Tests picked up HIV-antibodies in the baby‚ meaning it could be positive – but these could also come from the mother's liver as a liver stores many immune cells.

Other tests could not find any virus in the body‚ but the ARVs could be stopping the virus from showing up‚ scientists explained.

A sophisticated test to look for HIV DNA cannot detect it and scientists explained that if the toddler was positive‚ they think these sophisticated tests would detect HIV DNA.

Scientists may have to stop ARV medicine to see if the baby is negative‚ but the doctors don’t want to do it yet.

“For now the child is well and we will leave it‚” said Conradie.

“We saved a child’s life‚” she said.

The family has asked to remain anonymous and none of their details will be given‚ said the team of Wits scientists.
2018/10/23 03:23 PM
Medical aid increases well above inflation are expected to hit members in 2019. Business Tech reports that according to data from medical aid companies, the industry generally follows the guideline of CPI+3% when determining price increases every year, but this has not always been the case. Data published by financial advisory group GTC shows that the average increase across medical aid schemes over the last decade has hit as high as 6.4 percentage points above inflation, with the average since 2006 sitting at CPI+3.4%.

Between 2006 and 2010, medical aid users would have seen annual increases well beyond 10%, with the largest increase seen in 2008, when prices went up by almost 13%. However, inflation that year was also incredibly high (in the wake of the global economic crisis) at 11.3%, meaning much of the rising costs were actually absorbed by the medical aid industry.

In fact, the report says, that was the year that registered the lowest difference between inflation and medical aid increases, at CPI+1.4%. Looking beyond the data (post 2016/17), the medical aid industry in hiked prices by 9% in 2018, coming in range of CPI+3%, while the average across the industry is expected to be in the range of 8% in 2019.

According to GTC, the data should serve as a warning and guideline for medical aid members who are plotting their financial security into retirement, as it is one of the most overlooked aspects of financial planning. GTC consultant André Lindeque is quoted in the report as saying that that retirement plans in particular should incorporate planned increases in medical costs – not only for medical aid schemes, but also for the ad-hoc expenses that come with growing older.

“The cost of a medical aid is one of the more significant expenditures for many households, and naturally people are tempted to decrease this line item in their budgets, as they attempt to scale down their lifestyles,” Lindeque said. “However, great care should be taken before considering downgrading your provision for healthcare funding.” This is mainly due to the likelihood of greater healthcare needs during retirement years.

The report says while forward planning for healthcare during retirement should be priority for all – uncertainty still lingers across the medical aid industry as well the private healthcare sector in the face of government’s plans to roll out a National Health Insurance. Medical aid schemes in particular will already be feeling the impact, following the publishing of the Medical Schemes Amendment Bill in June, which outlined how they will have to change once brought into law.

Among the changes is the abolishment of co-payments – the out-of-pocket payments that need to be made by members when they are billed above the agreed rates of the medical aid schemes. The government’s plan is also to do away with Prescribed Minimum Benefits (PMBs) and replace them with comprehensive service benefits.

The report says these, among many other changes, will have a profound effect on medical aids in the future, and, according to industry experts, may have the effect of increasing the cost of private healthcare, or severely limiting what they can cover.

According to GTC, PMBs already cost around R700 per month per beneficiary on medical schemes – but this escalates to well beyond R3,000 once beneficiaries get older (85+). Ad-hoc or out-of-pocket costs, meanwhile, totalled R30bn in 2016.

“The government’s proposed National Health Insurance may promise cheaper universal healthcare over the long term, but there is still considerable uncertainty over the exact mechanics of the scheme – including what it will cover, to what extent, as well as the ultimate cost of the insurance to individuals,” GTC said.

“Given the current state of the South African public healthcare system, combined with an anticipated increase in healthcare needs in the retirement years, it is a reality that every retirement plan should cater for regular and unforeseen medical expenses, which need factoring in at a higher rate to other inflationary assumptions, especially if someone is used to, and would prefer to maintain, private healthcare benefits,” it said.

2018/10/24 12:01 PM
The private healthcare market, as it is running currently, is not sustainable in the long term and anyone who doesn’t admit to that is kidding themselves. This is according to Prof Sharon Fonn, one of the Panel members of the Health Market Inquiry (HMI) into the private healthcare sector and professor at the School of Public Health at Wits.

Reflecting on aspects of the HMI’s findings and recommendations in its Provisional Report at the HASA conference in Johannesburg, Prof Fonn said in its analysis of the original submissions and public presentations, the inquiry found that the private healthcare market was “replete with failures of every possible kind”.

“It is incredibly costly, and the costs are increasing, affordability is a real factor, and the stagnancy in the growth of people with insurance because it has become too expensive, is worrying. The short-termism in the market is unbelievable with people only focusing on what they can get now or in the next five years with some people even admitting that they are going to milk this cow until it drops,” Prof Fonn noted.

Specifically focusing on the hospital market, she emphasised the HMI’s finding of the concentration of three main hospital groups, Life Healthcare, Netcare and Mediclinic, saying it has led to a situation where there is not much competition on price but fierce competition for doctors to have rooms and operate from their facilities. This, Prof Fonn said, could lead to the misallocation of scarce resource and driving up costs.

Referring to the HMI’s findings around supply-induced demand, Prof Fonn stressed that the inquiry found a positive correlation between the risk of admission, and the number of beds and doctors in geographies with a high concentration of hospitals. This was found to be particularly true for ICU admissions where a significant relationship was shown between the number of admissions and the number of available beds with the rate of these admissions found to be considerably higher than that of the 17 OECD countries they were compared against.

“This suggests that utilisation is driven in part by the supply of doctors and facilities rather than patient needs,” Prof Fonn said, adding that if ICU admission rates could be halved in South Africa, they will still be on par with those in most of the comparable countries, leading to a saving of up to almost R3bn per year.

“The current rate of ICU admissions in private hospitals suggests that patients admitted to these facilities are either incredibly sick or something is done to them in the hospital that makes them sick,” Prof Fonn said.

She noted that while supply-induced demand occurs in healthcare markets everywhere, it is much bigger in South Africa, which could be in part blamed on funders allowing for fee-for-service remuneration that incentivises providers to do more in order to charge more.

She urged providers to give their input on how to deal with hospital concentration, conceding that divestiture by the three dominant hospital groups as recommended in the HMI report is “only the end of the road” and need to be carefully considered to prevent unintended consequences.

According to the HMI findings, there is also a need for the competition authorities to review their processes and decisions that have played a role in causing the concentration.

“We think they are looking too narrowly, that they define the market incorrectly and that they don’t give proper attention to issues such as creeping mergers,” Prof Fonn said, calling for the improvement of routine validated data on issues such as the real number of available beds, where they are and bed occupancy rates.

Concluding her presentation Prof Fonn assured stakeholders that the HMI was not set up to target anybody in the industry but to look at how accessibility, affordability and healthcare quality can be improved to ensure the long-term survival of the private healthcare sector.

“What we have realized is that the market is in trouble and if we don’t do something very significantly to change it, it is in danger of digging its own grave,” she warned.
2018/10/24 12:10 PM
Daar is groot gebreke in die data wat vir die markondersoek na private gesondheidsorg gebruik is. Die bevindings van die paneel en aanbevelings wat gedoen word, moet dus hersien word.

Dit het Anthony Norton, direkteur van die regsfirma Nortons, Dinsdag in ’n voorlegging oor dié ondersoek op die konferensie van die Hospitaalvereniging van Suid-Afrika in Bryanston in Johannesburg gesê.

Norton sê die ondersoek het ou data gebruik om die markaandeel van die verskillende hospitaalgroepe te bepaal.

Die voorlopige verslag van die ondersoek wat in Julie vanjaar bekend gestel is, lui dat die drie groot hospitaalgroepe – Mediclinic, Netcare en Life Healthcare – die mark vir private hospitale geheel en al oorheers, en dat elkeen ’n markaandeel van sowat 30% het.

“Die ondersoek fokus spesifiek op die tydperk van 2010 tot 2015,” sê Norton. “Wat die paneel glad nie in ag geneem het nie, is wat sedert 2015 in die sektor gebeur het.

“Die meeste lisensies wat sedertdien aan nuwe hospitale toegeken is, is aan hospitale wat aan die National Hospital Network (NHN) en ander onafhanklike hospitale uitgereik.

“Die NHN het vandag ’n beduidend groter markaandeel as wat hy drie jaar gelede gehad het.”

Hy sê die paneel kan moeilik aanbevelings doen oor hoe die sektor in die toekoms moet lyk as die huidige struktuur van die sektor nie in ag geneem word nie.

Die voorlopige verslag noem nie eens die NHN as een van die hospitaalgroepe op sy grafiek waarop hy aandui wat die markaandeel van die verskillende groepe is nie.

Luidens die hospitaalgroepe se onderskeie webtuistes het die NHN 68 hospitale en 57 dagklinieke, Mediclinic het 51 hospitale en 3 dagklinieke, Netcare het 54 hospitale en Life Healthcare 65 “gesondheidsgeriewe”.

Prof. Nicola Theron, besturende direkteur van Econex, stem met Norton saam: “Dis baie belangrik om die NHN by die berekening in te sluit. Wanneer dié groep se syfers bygereken word, is die sektor nie meer baie gekonsentreer nie, maar kan die konsentrasie eerder as ‘middelmatig’ beskryf word.”

Onnodige opnames

Prof. Sharon Fonn van die Universiteit van die Witwatersrand, ’n lid van die ondersoekpaneel, het in haar voorlegging op die konferensie gesê buiten dat die drie groot groepe die hospitaalmark oorheers, blyk dit dat hulle ook mense onnodig opneem bloot om geld te maak.

Sy het nie na die NHN verwys nie.

“Wanneer die aantal opnames in Suid-Afrika vergelyk word met opnames in ander lande wat deel van die Organisasie vir Ekonomiese Samewerking en Ontwikkeling vorm, is dit besonder hoog.”

“As Suid-Afrikaners regtig só siek is dat hulle so baie in intensiewe sorg opgeneem moet word, is dit kommerwekkend.” - Prof. Sharon Fonn

Sy sê dit is veral kommerwekkend hoeveel kinders opgeneem word om hul mangels te laat uithaal en hoeveel vroue keisersneë ondergaan.

“Sowat 90% van geboortes in private hospitale is deur middel van ’n keisersnee. Dit is ’n kommerwekkend hoë syfer.”

Fonn erken dit is nie net dokters wat pasiënte aanmoedig om eerder ’n keisersnee te ondergaan nie, maar dat daar ook ’n kultuur onder Suid-Afrikaners is om dít bo ’n natuurlike geboorte te verkies.

“Ons haal ook beslis te veel kinders se mangels uit.”

Sy sê die vraag word steeds gevra of dit regtig ’n prosedure is wat beduidende voordele vir pasiënte inhou.

“In vergelyking met lande soos die VSA en Duitsland neem ons ook te veel mense in intensiewe sorg op. As Suid-Afrikaners regtig só siek is dat hulle so baie in intensiewe sorg opgeneem moet word, is dit kommerwekkend.”

Norton hou egter voet by stuk dat hospitale nie net pasiënte opneem om geld te maak nie: “Ons het ons eie onafhanklike navorsing gedoen en kan geen bewys vind dat hospitale mense onnodig opneem nie.”

Meer hospitale nie sleg nie

Fonn sê nóg ’n bevinding in die ondersoek is dat die drie groot hospitaalnetwerke hul oorheersing misbruik wanneer hulle met mediese fondse onderhandel oor watter netwerke gebruik mag word sonder bybetalings.

Dr. Peter Davis, voormalige adjunkkommissaris van die mededingingskommissie in Brittanje, sê hul bevinding is eerder dat die markondersoek wys dat die private gesondheidsmark in Suid-Afrika uitbrei.

“Hoe meer mededinging daar is, hoe beter is dit vir die mark.”

Davis gee toe dat die Suid-Afrikaanse mark baie anders as dié van Brittanje is. Hy sê daar is ongetwyfeld baie uitdagings wat in die plaaslike mark oorkom moet word.

Hy meen baie werk moet nog gedoen word voordat die ondersoek in Suid-Afrika finaal afgehandel kan word. “Die ondersoek is baie meer omvattend as die een wat Brittanje probeer doen het. Daar gaan nog baie werk gedoen moet word.”
2018/10/24 12:01 PM
Daar is geen plan om van private gesondheidsorg in Suid-Afrika ontslae te raak nie.

“Niemand beplan om private gesondheidsorg te vernietig nie. Daar bestaan nie so ’n plan nie.” het dr. Aaron Motsoaledi, minister van gesondheid, Maandag aan afgevaardigdes op die Hospitaalvereniging van Suid-Afrika se konferensie in Bryanston, Johannesburg, gesê.

“Ons het nooit gesê daar is ’n gesondheidstelsel wat op twee vlakke funksioneer nie. “Wat ek gesê het, is dat ons nie twee stelsels kan hê waar 16% van Suid-Afrikaners toegang tot albei het nie.

Wanneer hul private mediese fonds uitgeput is, het hulle die keuse om die staat se gesondheidsorg te gebruik. “Dít terwyl 84% van Suid-Afrikaners geen keuse het waarheen hulle gaan nie. Hulle kan net gesondheidsdienste gebruik wat die staat lewer – of dit bestaan of nié. “Dit is waar die NGV inkom.” Motsoaledi sê siektetoestande kan nie op verskillende maniere behandel word op grond van wat mense kan bekostig nie.

“Ons moet ’n einde maak daaraan. Ons kan nie wag vir openbare gesondheidsorg om eers reggemaak te word voordat ons begin saamwerk nie. Dr. Aaron Motsoaledi, minister van gesondheid

“Ons kan nie wag vir openbare gesondheidsorg om eers reggemaak te word voordat ons begin saamwerk nie.

“Daar is een private hospitaal in Gauteng wat meer ginekoloë het as wat daar gesamentlik in staatshospitale in Limpopo, Mpumalanga en Noordwes werk.

“Ons moet kyk hoe hierdie ginekoloë by private hospitale ook pasiënte kan help wat net toegang tot openbare gesondheidsorg het.

“Daar is honderde sielkundiges bedrywig in die private sektor en minder as 200 in die openbare sektor. Maak dit nie sin dat hierdie sielkundiges ook in die openbare sektor help nie?”

Hy sê onderhandelinge tussen die staat en verskaffers van byvoorbeeld entstof wys dat die openbare en private sektor suksesvol kan saamwerk.

Kanker is volgens hom die volgende groot gesondheidsprobleem wat Suid-Afrika in die gesig staar, veral borskanker.
2018/10/24 12:11 PM
A proposal to train and employ 50,000 new nurses will be one of the flagship projects on the table at the government's Jobs Summit that will be held in Midrand this week.

The two-day initiative is looking for solutions to SA's high unemployment rate, which is near the 30% mark. Business, labour and government officials are expected to pore over proposals that include job creation opportunities in industries such as agriculture.

The Jobs Summit comes as Stats SA revealed this week that SA shed 69,000 jobs during the second quarter of 2018, when the economy tipped into a recession following two quarters of negative economic growth.

The proposal to train and employ new nurses emanates from private hospital group Netcare, which this week confirmed that the concept would be tabled at the summit convened by President Cyril Ramaphosa.

The private sector will provide on-the-job training over eight years if the project is pursued. SA is short of 47,000 nurses.

Ramaphosa announced last week that he had instructed health minister Aaron Motsoaledi to urgently fill 2,200 nursing vacancies as part of the government's R50bn economic recovery package.

Netcare's project was developed in 2016 as part of the CEO Initiative, which included youth unemployment as a focus, when it submitted a training proposal to address the shortage of nurses by providing employment to 50,000 unemployed people.

"The proposal is based on a collaborative approach between government, organised labour, community and the private sector, with all regulatory bodies working together to achieve this much-needed outcome," the company said in a statement.

"It is envisaged that, once funding has been secured, this initiative will be provided at the cost of delivering such training, with no profit or margin built in."

Nceba Ndzwayiba, GM of enterprise and supplier development at Netcare, said: "We contemplated a joint initiative between the government and private sector to achieve this."

The project was proposed at the National Economic Development and Labour Council - a consultative structure for government, business, labour and community organisations - through Business Unity SA.

Ndzwayiba said the cost of such a project was "nuanced - it's not very simple".

He said there was a pool of unemployed nurses and the private sector had vacancies to absorb these nurses. "We needed to understand what are the challenges and barriers to get these nurses into employment."

Prior research undertaken by the South African Nursing Council also alluded to cohorts of nurses and nursing assistants who had qualified in the 2014/2015 period, with a number of them remaining unemployed despite an indication from the health department that there was a shortage in the profession.

These nurses would have to be taught additional skills and nurses currently registered would also have to be educated and promoted to become specialist nurses.

Another group of nurses were those trained by "fly-by-night" schools. These were not necessarily illegal schools but those who emerged from them might require proper training. "We are saying those people are already demonstrating commitment to be in the profession," Ndzwayiba said.

"We are hoping the funding model would be informed by the solution we finally adopt." He said the costing model in the public and private health sectors and Setas was not standardised.

The Democratic Nursing Organisation of SA (Denosa) said it had been disappointed by former president Jacob Zuma's undertaking to fill nursing vacancies and hoped Ramaphosa's efforts would come to fruition. Zuma, in his 2011 state of the nation address, promised to revive closed nursing colleges within three years. "Which until today never saw light of day," said Denosa spokesperson Sibongiseni Delihlazo.

Denosa hoped the government would reopen nursing training colleges, Delihlazo said. In 2015 the country needed to produce 11,000 professional nurses but colleges and universities trained only 4,000 that year.

The organisation said it took a long time for nurses who had retired or resigned to be replaced in the public sector. "This leads to more frustration and bottlenecking in health care, where long queues are the order of the day. Putting a moratorium on the appointment of critical health-care professionals by provinces was always going to put quality health care into serious trouble."

SA has also lost many health-care professionals to countries such as the UK, United Arab Emirates, Australia, New Zealand and Saudi Arabia, where there is higher pay and better working conditions.

A business leader who attended a roundtable discussion between Ramaphosa, business and labour representatives two weeks ago said other projects mooted for the Jobs Summit discussion included water infrastructure at the municipal level, which could create jobs.

"There are, under the economic sector, quite a number of proposals. If everyone does what they are meant to do there is potential to create jobs."

The business leader, who spoke on condition of anonymity, said proposals "seem to be much more initiative driven, It's not these grand plans."
2018/10/02 10:56 AM
We listened carefully to your stimulus package announcement last week and we welcome your commitments, among others, to fill more than 2,000 critical vacancies in the health system and buy hospital beds and linen. This is good news. It is not a secret that the health system needs drugs and other complex supplies, but also linen and beds. However, we have a couple of red lights, issues we believe important, to urgently bring to your attention.

Dear President Ramaphosa,

We apologise up front for sending you another letter. We know you have been receiving a lot of mail lately… some writers asking you to fix the dire and tragic state of our school sanitation, while others asked you to think carefully about how to save the health system.

We listened carefully to your stimulus package announcement last week and we welcome the details stating that you will among others be filling over 2,000 critical vacancies in the health system and buy hospital beds and linen. This is good news. It is not a secret that the health system needs drugs and other complex supplies, but also linen and beds. However, we have a couple of red lights, issues we believe important to urgently bring to your attention.

You may ask why you need to read even more bad news, news you probably know. Well, we believe that amid this “bad news” that we are sharing with you there are opportunities to cut off the dodgy connections enabling the looting in some provinces, to recover some much-needed money and to ensure our money ends up in the right hands and serving our people.

While our media counterparts have rightly and fortunately been spending much time on reporting on State Capture, the #GuptaLeaks and the looting of our state owned enterprises, Spotlight (a Treatment Action Campaign and SECTION27 publication) has been doing a series of investigations under the banner #Health4Sale. We think it is important that we bring to your attention what we unearthed, because we believe by acting now, you could quite quickly find some much-needed rands to redirect while at the same time ensuring only quality beds and equipment are purchased for our hospitals.

One of Spotlight’s main focuses has been the gangster provinces — we don’t use this term lightly — of the Free State and North West where our investigations reveal that money is being looted and siphoned off without the actual services or supplies reaching the health system.

A Gauteng-based ambulance operator, Buthelezi EMS, that is currently the subject of both Hawks and Treasury investigations, has scored both road and air ambulance contracts in the so-called Premier League provinces amounting to more than R1-billion since 2013. Worryingly, we understand that the company is a frontrunner to secure a lucrative new three-year tender in the Free State. Even after being exposed earlier this year, and after strong words from the Minister of Health, Buthelezi EMS is at this moment still doing business with the state in at least four provinces. Mister President, the looting continues as we speak.

So even while billions is being paid, well-placed sources allege that Buthelezi EMS often transports multiple patients in a single ambulance as part of their inter-facility transfer service. Sometimes as many as five patients will be transported in one ambulance, but Buthelezi allegedly bills as if five different ambulances have been used and writes invoices with five different reference numbers. At other times, patients who could safely be transported in cars are allegedly transported at great cost in ambulances.

It is also alleged that Buthelezi often charges for distances that are longer than those travelled. We have seen devastating figures to this effect that have been presented in a provincial department of health management meeting. Spotlight was told of a case where a 2km trip was charged for as a 100km transfer.

So, Mr President, you may be asking how Mr Thapelo Buthelezi’s companies (he has registered more than six versions and names) managed to score these lucrative tenders and cushy, backdated increases? There are clearly many enablers when the signatures were inked, including we believe, possibly some folk at Treasury and the SA Revenue Service — one dot worth joining is look no further than down the passage in Luthuli House where Comrade Secretary-General former Free State Premier Ace Magashule may be able to shed some light.

Spotlight found that Buthelezi EMS netted more than R15-million from two suspect back-dated price increases from the Free State Department of Health, apparently without much scrutiny. Documents that Spotlight has had sight of reveal how the increases were signed off during a five-day period, when it seems the Free State Department of Health was temporarily taken out of administration by decree of then Premier Magashule.

In a signed memorandum dated 3 February 2017 seen by Spotlight, Magashule effectively takes the provincial department of health out of administration for five days by appointing the head of the department of health, Dr David Motau, as acting accounting officer from 6 February 2017 to 10 February 2017. In this five -day window, Motau signs off on what procurement experts describe as two highly unusual back-dated 8.5% price increases for Buthelezi EMS. One cannot help but ask how many hospital beds this money would have brought in a province where we know patients often sleep on hospital floors.

Spotlight sent a photographer to Buthelezi’s Bloemfontein ambulance base. The base does not have any external signage. The outside of the suburban house in Bloemfontein was in a shocking state with rubbish, mud and a yard full of ambulances, some seemingly no longer in running order. Aerial photographs show a backyard littered with rubbish and no sign of any waste disposal.

Spotlight asked the Free State Department of Health whether they visited and inspected Buthelezi’s ambulance bases. One would imagine that if you pay someone hundreds of millions you would want to do some checks? No, said head of department Dr David Motau:

“Sites visits was not a requirement as per the tender document”. See Ambulance Bases of Shame.

How do we ensure that stimulus money, or any government money, any money for that matter, is not wasted on shoddy businesses such as this that don’t only waste money, but degrade the level of healthcare services delivered to the people? How do we insulate public procurement from this kind of looting?

President Ramaphosa, now zooming in on those new hospital beds you want to buy. Spotlight recently reported on a story, again in that gangster province the Free State, which involves hospital beds and other important equipment.

Doctors in the Free State have told us that newly purchased theatre beds are breaking in hospitals within months of installation, making it hard to perform critical surgery.

President Ramaphosa, at one hospital, a height-adjustable orthopaedic theatre bed got stuck on too high a setting, forcing doctors to stand on benches while operating. In other cases, new theatre lights are installed too low, resulting in some of the theatre personnel often knocking their heads while performing surgery.

Doctors also report that a number of newly purchased anaesthesia machines are gathering dust because anaesthetists are not willing to use the machines since they are missing components and various alarms do not work. Anaesthesia machines typically have multiple components and a sophisticated set of alarms to ensure that nothing goes wrong while someone is under general anaesthetic. This is equipment and beds worth millions.

The tender in question was awarded in August 2016 to a company named Mediquip SA Hub. According to the Free State Department of Health, they have paid Mediquip just more than R100-million under this contract in the less than two years it has been running.

Mediquip appears to be a relatively small company, employing only 10 people. However, it has a running contract to supply all kinds of equipment to all hospitals in the Free State. Mediquip has no online presence although its lawyer claimed that a “new website is under construction and will be operational in due course”. (This was in May, they still have no online presence). The Free State health department also indicated that it has no plans to cancel the tender.

But wait Mr President, there is more.

The two key local directors of Mediquip are two people you may have come across in your political life, George Sebulela and Bernard Tefetso Phitsane.

Sebulela is the president and chief executive of Sebvest Holdings, secretary-general of the Black Business Council and a current member of the Eskom Board. Yes, Eskom, which we know needs leaders beyond reproach. Spotlight sent Sebulela a list of questions. He acknowledged receipt and said he would ensure that Mediquip staff respond. That was the last we heard.

We did however, receive answers to questions sent to Phitsane via a lawyer’s letter. Phitsane is a man whose name delivers many Google hits. He is a senior ANC politician in the Free State and currently the chairperson of the beleaguered Bloem Water and is a close ally of Ace Magashule. Phitsane is also listed as a director of Dinaka Trading 5 CC, a company of which Ace Magashule is a former director — and his son Tshepiso Magashule is still listed as a director.

Speaking through his lawyers, Phitsane denied to Spotlight ever having been in business with Ace Magashule, in apparent contradiction of Companies and Intellectual Property Commission records. According to information revealed in the #GuptaLeaks articles published by Amabhungane, Tshepiso Magashule (Phitsane’s co-director of Dinaka Trading 5 CC) has been linked to various deals with the Gupta family, for whom he worked.

Phitsane also happens to be married to Nelisiwe Phitsane, the chief director supply chain management and asset management in the Free State Department of Health. According to Bernard Phitsane this relationship was disclosed when bids were submitted to the Free State Department of Health. The department confirmed this to Spotlight, but failed to provide proof when requested.

But it doesn’t end there, Mr President.

In April 2016, a few months before being awarded the medical equipment tender, the Free State tender bulletin announced Mediquip was awarded its first major tender in the province. This was for the provision of mobile medical units (a kind of mobile clinic), or “China buses” as they are commonly referred to in the province. The department indicates that it has paid Mediquip a total of just more than R70-million under this tender for six of these mobile medical units (adding up to close to R12-million a unit).

However, while the announcement was made in April 2016, this tender had in fact already been awarded in October 2015. In all other cases where Spotlight looked at the award of tenders, the award was announced the next month and not six months later. The Free State Department of Health failed to respond to a question about why the announcement was delayed.

The October 2015 date is also only half-a-year after Phitsane and Sebulela became directors of Mediquip.

Meanwhile, OFM News reported last week that these R70-million mobile units are parked at the Free State Psychiatric Complex in Bloemfontein where they are gathering dust. It is reported that these buses cannot travel on rural roads. Instead some of the mobile “clinics” are rolled out at political jamborees.

As you will know mister President, this is the tip of the iceberg.

We have not even touched on the Gupta-linked Mediosa, or any of the other tip-offs that have been flooding in since we started publishing the #Health4Sale articles. We have also not zoomed in on how Buthelezi managed to get air ambulance contracts in Mpumalanga and Limpopo and how National Treasury got caught up in, and eventually lost badly, in lengthy court cases concerning these dodgy contracts.

We can also disclose to you that four provinces have recently advertised new tenders for air ambulance services and that Thapelo Buthelezi has attended all pre-bid briefings, indicating that he fully intends to again get a slice of the pie.

So, Mr President, what are the solutions?

We agree there are no easy fixes to the endemic corruption in many of our provinces. Insulating procurement from political influence is both urgent and something that cannot be achieved overnight. A good start however, and something that can happen right now, is to ensure that the Buthelezis and the Mediquips of the world are properly investigated — something that unfortunately cannot be left to the Free State or North West Hawks.

These companies are still receiving millions of our rands and are no doubt hoping for some of the new stimulus money. By acting decisively against these companies you may save quite a bit of money and at the same time flush out some crooks. In fact you may buy those hospital beds and linen at much better prices and still have some change. As one of your ministers reminded us so famously during the height of State Capture: Join the dots.

Yours in the spirit of Thuma Mina,

Anso Thom and Marcus Low, Spotlight Editors.
2018/10/02 10:57 AM
The following article was written by Spotlight, a media publication monitoring health issues in SA, published by SECTION27 and the Treatment Action Campaign.

Medical schemes and private hospitals have over the last four years been under the Competition Commission's microscope. While a provisional diagnosis makes unhappy reading for consumers, diagnosis may well in this case be the first step to cure.

The commission released its provisional Health Market Inquiry (HMI) report on July 6 this year, chaired by former Chief Justice Sandile Ngcobo, into the private healthcare market in South Africa.

The public has until October 1, 2018 to comment on the 479-page report. If you have any comments, fill out our survey below.

We have picked out 10 of the most interesting findings from the report – but for those with an interest in why their private healthcare costs are what they are, we highly recommend digging into the surprisingly readable report itself.

1. The inquiry confirmed what most consumers know – picking a coverage plan is not simple.

They found: "Consumers wishing to purchase medical cover face a daunting task of selecting from 22 open medical schemes and 185 benefit options that are neither standardised, nor comparable."

2. Navigating claims and knowing exactly what is covered and what is not covered can be a nightmare. Importantly, the inquiry goes further to say that members should know why some providers or networks were selected ahead of others. Here's the relevant paragraph:

"The inquiry found that information members receive is not necessarily sufficient to assess the quality of the services they receive from their medical scheme. The HMI found that some medical schemes provide some useful information to members with PMBs (prescribed minimum benefits) and chronic conditions. However, more could be done to ensure that members are well enough informed to navigate the system without facing unnecessary co-payments and to help members understand why the medical scheme did not pay a particular claim. Members should also receive information in relation to the providers the schemes contract with, in the form of outcomes measures and how the medical scheme selected the providers on their networks."

3. The inquiry found that costs are really going up - consumers are not imagining it - so much so that it is hard to explain the increases. Here is the relevant paragraph:

"The inquiry collected claims data for the period 2010 to 2014. Over this period, the average expenditure per private medical scheme member increased by 9.2% per annum. After adjusting for factors such as inflation, age, members' plan type, gender, disease profile and membership movement, the unexplained (or residual) increase in spending per member was still greater than 2% per annum in real terms. To put this in context, 2% of spending amounts to around R3bn in 2014 terms, that is R330 per beneficiary per annum that could not be explained by factors rationally expected to drive expenditure."

4. While the cost increases are complex, the inquiry did establish that the increases are mostly related to hospitalisation. They found:

"Most of this unexplained increase in claims cost can be attributed to in-hospital rather than out-of-hospital care, indicating a relative shift in claims costs towards hospital-based care that cannot be entirely attributed to the proxies for risk analysed by the HMI."

5. Doctors in South Africa send more patients to hospital than doctors in other countries. The suggestion is not that South African doctors are inherently different, but that a combination of poor regulation and market forces results in many people being hospitalised unnecessarily. They found:

"Absolute age-adjusted hospital admission rates increased significantly from 2010-2014 (the period for which we had data) and were higher than all but two of 17 OECD (Organisation for Economic Co-operation and Development) countries compared against. Specific discretionary surgical procedures were compared against comparable countries and utilisation rates in the private sector were higher than the average for six of the seven procedures studied, and the highest of all countries for four out of seven."

6. The patient-to-doctor ratio is roughly seven times higher in the private sector than the public sector. They did not find that there is a shortage of doctors in the private sector, but did find that doctors' time was being used inefficiently. Here's the relevant quote:

"There are 2.12 medical practitioners per 1 000 population in the private sector (0.92 GPs per 1000 and 0.83 specialists per 1 000) compared to 0.3 medical practitioners per 1 000 population in the public sector (…) The evidence of supply-induced demand we have presented implies that there is time for doctors to over-service. This is particularly the case for specialists. This indicates that there is not an absolute under-supply of specialists but points rather to an inefficient use of their time."

7. Unusually high percentages of our medical scheme premiums ends up going to non-healthcare costs. As in other areas, the inquiry benchmarked South Africa against other countries, and found us wanting. Here's the key finding:

"Non-healthcare costs for the 10 largest schemes in SA range from 5% to 13.4% of gross contribution income (GCI) compared to only 3% of GCI on average for OECD countries."

8. There appears to be a lack of competition in key areas in the private sector. A lack of competition is almost always bad for consumers and typically leads to higher prices than would be the case with more competition. Here is what the inquiry found in relation to medical schemes:

"Although there are 22 open medical schemes, this market is concentrated as two medical schemes constitute approximately 70% of total open scheme market as measured by number of beneficiaries. There is, however, one dominant open medical scheme, Discovery Health Medical Scheme (DHMS), that comprises 55% of the open scheme market, and it continues to grow organically and through a series of amalgamations with smaller restricted schemes. The Government Employees Medical Scheme (GEMS) is the largest restricted scheme and is second only to DHMS as measured by number of beneficiaries."

9. While it is debatable how big a problem a lack of competition is in the medical schemes business (larger schemes might after all be able to negotiate better deals for their members), lack of competition is clearly a serious problem in the private hospital business.

A few large hospital groups are essentially in a position where they can call the shots when setting prices since in most places, they are the only game in town. The details are as follows:

"Three hospital groups, Netcare, Mediclinic and Life have a combined market share of 83% of the national South African private facilities market in terms of number of beds and 90% in terms of total number of admissions."

10. In addition to a small number of companies dominating the private hospital and medical schemes markets, the inquiry also identified ownership patterns that may present conflicts of interest. The inquiry paints a complicated web, but here's a quote that will give you an idea:

"The HMI has found that, in total, 56.9% of the total medical scheme beneficiaries under administration are administered by entities (administrators) in which the Remgro corporate group has a stake and 22.6% of the total medical scheme beneficiaries under administration are administered by entities in which the Afrocentric corporate group has a stake."

In addition to its wide-ranging findings, the inquiry also makes several recommendations on how to go about more effectively regulating private healthcare in South Africa and ensuring consumers get better value for money.

You can read the recommendations here.

*Note: While Spotlight is published by SECTION27 and the Treatment Action Campaign, its editors have full editorial independence – independence that the editors guard jealously. Spotlight is a member of the South African Press Council.
2018/10/02 10:58 AM
Women’s health, men’s health, chronic disease management, innovative plans, catching criminals and a digital revamp – Bonitas reflects on 2018 and launches its 2019 plans and strategy

 Bonitas Medical Fund (Bonitas) announced a weighted increase of 8.9% for 2019. ‘This,’ says Gerhard Van Emmenis, Principal Officer, ‘despite a challenging year for the healthcare industry, against a backdrop of uncertainty around the NHI, the recent Health Market Inquiry and current tough economic conditions faced by consumers.’

‘The past 12 months have been extremely trying, with a number of uncertainties and changes anticipated. In addition, consumers have been heavily impacted by the increase in VAT and escalating prices which resulted from this.’

In July Bonitas announced its financial results for 2017, the best in its 35-year history, with a solid surplus of R730.20 million, having recouped a deficit of R16.9 million from 2016.

’This turnaround was due to several key cost saving strategies and says Van Emmenis. ‘It bolstered our reserves from R3.1 billion to R4 billion which means that we are able to invest back into the Scheme and offer our members access to healthcare of the highest quality.’

The Fund has announced a number of additional benefits for its members for 2019, while keeping increases as low as possible. ‘We know that it’s not only the monthly premiums that affect the consumer’s pockets but the value they get out of their medical aid plan,’ says Van Emmenis. ‘Some of the benefits have been tweaked, others increased, one plan has been discontinued and two new options have been introduced, all aimed at helping members take control of their health and lead better lifestyles.’

Working together to reduce healthcare costs

‘We continue to seek partnerships with healthcare providers to ensure we are part of the same value chain, rather than being part of the supply and demand of the healthcare economy,’ says Van Emmenis. ‘In addition, we are focused on educating role players to balance the triangle of affordability, quality and cost efficiencies. We are developing an incentive model to motivate service providers to eliminate activities that do not add value to members.’ Over the past few years, Bonitas has taken a multi-pronged approach to cost saving, focusing on:

Hospital Negotiations

Hospital claims account for half of Bonitas’ annual claims, around R6 billion a year. For this reason we negotiated a pricing structure with the main hospital groups, to deliver a savings of R242 million last year. We project that this saving will increase to approximately R550 million over the next two years in present value terms.

Managed Care

We place great emphasis on our Managed Care initiatives to help members, with chronic conditions, manage their health better. It takes into account the best clinical and treatment protocols while containing costs. Our back and neck, oncology, hip and knee and HIV/AIDS programmes respectively, continue to offer our members emotional, clinical and financial support.

Chronic Conditions

The Council for Medical Schemes (CMS) cites chronic conditions – with diabetes in particular, as one of the key contributors to a rising disease burden in South Africa and escalating healthcare costs. 80% of the Scheme’s diabetic patients have associated chronic conditions such as high blood pressure and cholesterol, heart disease and depression which need to be managed on a unique basis. ‘Through our Diabetes Programme, hospital admissions related to diabetic patients having reduced by 11.6% year-on-year,’ says Van Emmenis.

Prevention is better than cure

We have a keen focus on preventative care as early detection is a critical factor in ensuring our members get the support they need to manage any serious conditions timeously.

Women’s Health

Last year, we kept a firm focus on women’s health introducing cover for pap smears on all our plans. Since cervical and breast cancer continue to be most prevalent, we have continued our efforts towards early detection by ensuring mammograms for women over 40 will be covered once every two years on all our plans from 2019.

Men’s Health

In addition, we have placed the spotlight firmly on men’s health, especially in light of a prevalence of prostate cancer, by adding the prostate screening antigen test to all options for men aged between 45 and 69.

GP Network

We have South Africa’s largest GP network which ensures our members get value for money and stretch their benefits.  Our online provider locator tool has been enhanced so that members can find network hospitals, doctors and specialists in their area quickly and easily.

Fraud, Waste and Abuse (FWA)

Our ongoing efforts to reduce FWA have been successful, with a number of convictions and sentencings. This significant focus delivered recoveries of R31.2 million with a potential preventative savings of R75 million. We will continue to ensure that all outstanding money is successfully recovered and repaid to the Fund, so that it can be put to better use to benefit our members.

Going Digital

Digital remains a key driver for member and broker communication with Member, Broker and a newly introduced Corporate Zone available on the website.  The online application has been revamped, we’ve introduced an electronic membership and a live chat function has been added to assist current and potential members with any questions they may have.

Besides enhancing the Member Zone as from January 1, 2019 members will have access to the Bonitas App – a revolutionary cell phone application that will offer the full benefits of the Member Zone. Making it easier for them to view their benefits and claims as well as submit claims, obtain authorisation, find a network provider, resolve queries and so much more while on the go.

As a value-add for members, Bonitas has aligned itself with strategic partners to offer a comprehensive and holistic solution to help members take care of their financial health and wellness, without paying anything extra. ‘This is not another loyalty programme,’ explains Van Emmenis, ‘but rather real added value aligned to member needs, with no fee or points scoring.’ The model includes a Multi-Insurer Platform offering Medgap, exclusive gap cover with a discount of up to 48% discount for Bonitas members and a wide range of life, funeral, disability cover products through Sanlam Indie with exclusive benefits in the form of free investments up to 110% of monthly contributions. And finally, a variety of free monthly discount vouchers from 30 participating partner retailers through Electronic Line.

In conclusion, Van Emmenis says, ’Our plans have been restructured to meet market demand, consumers are looking for options that offer attractive benefits at a more affordable rate.

Summary of key changes for the year:

• A weighted increase of 8.9%
• A new multi-insurer platform with exclusive deals and offers for Bonitas members including gap cover
• Two new plans introduced – Primary Select and BonEssential Select. These use dedicated networks and are both are priced around 15% lower than the Primary and BonEssential options respectively
• The Hospital Plus plan has been discontinued
• Mammograms for women over 40 will be covered once every two years across all the plans
• Prostate screening antigen tests for men aged between the aged of 45 and 69 have been included across all plans
• Childhood immunisations according to the EPI schedule, are now offered to members on BonClassic, Standard, Standard Select, BonComplete, BonSave, Primary, Primary Select and BonFit – paid from risk
• The introduction of the My Family Modelwhich contains a full suite of care – such as maternity consultations, 2D scans, antenatal classes, newborn hearing screening – all paid from risk
• The day-to-day benefits on Primary has been increased by 15% for 2019
• A family benefits of R31 500 has been introduced on BonEssential for internal prosthesis, it is also included on BonEssential Select
• BonClassic has been re-aligned to fit in with other options with radiology and pathology combined into one benefit

For more information on the range of medical plans available from Bonitas, or to compare options, go towww.bonitas.co.za.
2018/10/02 10:59 AM
Medical scheme Medshield is planning to introduce a loyalty programme that will attract young members in a competitive environment as the company hikes contributions by 14.3% for 2019.

Speaking at the company’s headquarters in Johannesburg, Glen Sikosana, the executive for business development and marketing, said on Tuesday that the 50-year-old scheme was looking to expand its reach.

“We are now looking into a loyalty product to address the needs of the elderly which are already with us and the young people who we want to attract,” Sikosana said, adding that the group was also beefing up its technology offering.

Medshield’s average beneficiary age is relatively high at 37.6 compared with the average age of all South African medical schemes of 32.5.

It has a high pensioner ratio with 12.2% of all beneficiaries aged 65 and older, compared with the industry average of 7.9%.

The loyalty programme comes against the backdrop of the popularity of Discovery Vitality that covers members of the Discovery Medical Aid as well as Momentum Multiply by Momentum Health.

Sikosana said the loyalty programme, which would be introduced shortly, had to be tweaked following concerns from regulators.

He said the scheme was in talks with relevant providers to beef up the programme. “We are starting to think; who are the retailers we can partner with? Those integrations take a while.”

Even with the 14.3% increase, rand for rand the scheme offered better value for money, he said.

Referring to the gazetting of the draft National Health Insurance Bill and the draft Medical Schemes Amendment Bill in June, Sikosana said the company was bracing itself for changes in the industry.

“We are highly dependent on brokers as a distribution arm. We have 580 brokers that are contracted to the scheme, and to immediately want to chop off the distribution arm becomes a huge thing. We think there are innovative ways to still use brokers in a different way that will give comfort to the brokers,” he said.

The Medical Schemes Act could have significant implications for medical schemes on issues such as governance and structuring of contribution tables, among others.

“Medshield has a firm intent to be part of the solution for the challenges facing South Africa’s entire healthcare value chain, and is ready to contribute to the clarity and transparency that is required in the current healthcare market.”

The scheme has 81553 members, an 11.12% improvement from 73390 in 2016.

Rosalind Reddy, the group executive for clinical risk, said despite the changing healthcare environment and the technical recession Medshield’s growth was outperforming expectations. “Our member-centric approach and option range meet the needs of our members and are translating into positive results,” said Reddy.
2018/10/02 11:07 AM
In a similar vein to the land reform debate in South Africa, health reform is also filled with populist rhetoric, seemingly in the lead up to the 2019 national elections. In February 2018, President Ramaphosa singled out the urgency of National Health Insurance (NHI) in his first State of Nation address. Publication of the draft National Health Insurance Bill (NHI Bill) followed shortly, with the simultaneous release of the Medical Schemes Amendment Bill (MSA Bill).

In brief, the NHI Bill provides for the establishment of a single health financing system, the NHI fund, which will be the single purchaser and financier of the population’s personal health services. The NHI fund will pool funds and purchase undefined “comprehensive health services” on the population’s behalf from accredited health establishments and suppliers. All South African citizens, permanent citizens and their dependants will be obliged to register as NHI fund beneficiaries at accredited public/private health care establishments and will be entitled to “quality health service benefits” free of charge. Refugees and asylum seekers will be entitled to emergency health care services, treatment of notifiable conditions, and paediatric and maternal services at primary healthcare level. A person will not be able to directly utilise hospital or specialist services without referral by a primary healthcare provider, unless in an emergency.

One must keep in mind that the NHI is the governing party’s answer to ensure universal health coverage (UHC). UHC is defined by the World Health Organisation (WHO) as ensuring all people have “access to health services” (ranging from prevention and treatment to rehabilitation) of “sufficient quality” without exposing them to “financial hardship”.

The NHI Bill maintains that the NHI will give effect to the State’s constitutional duty of “progressive realisation” of the right to have “access to health care services including reproductive health care”. The NHI will apparently be the solution to South Africa’s dire state of healthcare which, according to the 2011 Policy on National Health Insurance (NHI Green Paper), is caused by the unequal provision of quality healthcare in the public and private sector and costly private healthcare.

The fact that the NHI is the governing party’s solution to realise universal health coverage is important, as the public has never had the opportunity to participate with a politically neutral forum evaluating different proposals. The official opposition, for instance, has an alternative to the NHI scheme (“DA Health Policy ‐ Affordable, accessible high‐quality healthcare for all”) which uses the Western Cape model, providing free quality health services in the public health system but retaining and reforming the medical aid system. The opposition’s model might similarly be problematic, but there has never been an objective comparison for the public’s advantage.

The NHI Bill, which will be implemented over three phases, provides very little detail with which to meaningfully engage at this point, as critical elements will only be provided in regulations. This includes the nature of health service benefits to be funded; payment mechanisms; the NHI Fund’s budget and the relationship between the NHI Fund and Medical Insurance Schemes (MIS). The role of MIS is vaguely described as providing “complementary health service benefits” not covered by the NHI Fund, which a user may purchase. Only if a user failed to either comply with the NHI referral pathways or seek services “not deemed medically necessary” must they pay directly or through their medical aid.

Detail about costing, NHI implementation plans, and the healthcare benefits to be funded are pivotal to evaluate the NHI’s feasibility. Lack of this particular detail was already emphasised in the Davis Tax Committee’s (DTC) March 2017 report on the White Paper: National Health Insurance for South Africa 2015 (White Paper). In brief, the DTC considered the NHI’s tax revenue dimensions and the financing proposals via direct taxation, indirect taxation, payroll taxation, or premiums.

The White Paper, using 2010 prices and assuming a 3.5 % GDP annual growth, estimated that a R256 billion per annum funding increase was needed and that there would be a R72 billion shortfall by 2025. The DTC stressed that “the proposed NHI, in its current format, is unlikely to be sustainable unless there is a sustained economic growth”. Since the DTC’s report the current economic situation has worsened. According to Statistics South Africa, South Africa is currently in a technical recession, with a 0.7% decrease in the GDP in the second quarter of 2018, following a 2.6 % decrease in the first quarter. This reality coupled with a staggering unemployment rate of 26.7 % could cripple any hope of the NHI being successful.

In the DTC’s report, an interesting mention was made of Ireland’s Universal Health Insurance Plan which could be quite relevant. The DTC cautioned that lack of detail on costing and health service benefits could see the NHI fail, similarly to Ireland’s 2011 White Paper on Universal Health Insurance which also lacked this particularity. The Irish Government, according to the DTC, subsequently abandoned this in 2015 after a study indicated that it was unaffordable. However, since the DTC report, Ireland has taken an interesting approach.

A parliamentary select committee was established in 2016 with representatives from all political parties (the Oireachtas Committee on the Future of Healthcare) aiming to achieve cross party consensus on healthcare reform and fulfilling universal health coverage. The Committee worked with international health policy specialists to address various aspects such as funding and integrated care and their report (the Sláintecare plan), concluded in May 2017, provides a 10 year health reform plan.

The vision of free of charge quality healthcare in South Africa is a vision aligned to the Constitution in so far as the right to access healthcare services is concerned. The reality, however, is that by solely focusing on NHI, which appears to be economically unfeasible, we lose sight of the fact that a solution is desperately needed. It might be time to follow the Irish example, as the future of health reform should not hinge only on the feasibility of the NHI.

*In Part I and III, health initiatives undertaken in the NHI pilot phase and proposed NHI governance concerns will be analysed respectively.

Christine Botha is Legal Officer, Centre for Constitutional Rights.

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