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Mediclinic News : Adverse side effects

Title

Adverse side effects

Date

2018-05-10

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News Description

FINANCIAL MAIL Discovery’s shareholders have every reason to smile. The stock is up 27 percent over the past year, on a spectacular 62 percent run in 2017, as the insurance group’s myriad new business ventures here and abroad bear fruit. Likewise, its Vitality-obsessed customers have enjoyed countless smoothies, coffees and, for the really committed, Apple watches on the house. Staff, meanwhile, get to work in Discovery’s brand spanking new Sandton headquarters, which reportedly cost R3-billion to build. Yet for all its wow factors - and Adrian Gore’s Discovery is undeniably impressive - the sector from which it derived more than a third of its profit in 2017, healthcare, is fundamentally broken. And doctors, perhaps Discovery’s only dissatisfied stakeholder grouping, are growing increasingly frustrated with the corporatisation of private healthcare. Large medical aid administrators and private hospital groups wield “undue influence” on private healthcare practitioners, according to Chris Archer, a gynaecologist and CEO of the South African Private Practitioners’ Forum (Sappf), which represents specialists in private practice. It is not difficult to see why: Discovery Health, the administrator for the medical scheme of the same name, manages more than 3-million lives across open and closed medical schemes. It collected R5.5-billion in fees last year for doing this. Medscheme is even larger, managing 3.6-million lives, across medical schemes such as Bonitas and Fedhealth, as well as numerous closed schemes. Large administrators unsurprisingly keep a tight rein on the purse strings of the not-for-profit medical schemes they manage. Sappf is just one of dozens of organisations representing the rights of healthcare practitioners on issues that have cropped up over the past two decades. They aim to redress this seemingly unequal balance of power. At the heart of the conflict between healthcare professionals and medical aids appears to be a broken and out-dated pricing model, which does not consider the true cost of medical care and leads to bad behaviour from both sides. The reasons for the structure of the current model are complex, lengthy and historical. Briefly, Department of Health-commissioned cost studies undertaken in 2006/2007 did not yield the outcomes the department had been banking on. The department, said Archer, thought these studies would force prices down. Instead, they showed that doctors were under-remunerated. The department refused to accept the results. A 2010 court ruling found in favour of healthcare professionals on the legality of the so-called "reference price list" (RPL) of 2007-2009, a guide against which medical schemes can determine benefit levels. Couple this with a Competition Commission-imposed ban on negotiations between doctor groupings and medical aids to set tariffs, and what you have left is a situation in which medical aids rely on a 2006 version of the RPL, with inflationary adjustments. This, said Archer, is the “root cause of all the issues”. What is needed, he said, is a non-binding guideline tariff based on input costs. The current fee-for-service model, which contains very little evidence-based costing, leaves doctors feeling under-remunerated and medical schemes suspicious that poorly paid professionals are overselling their services. Medscheme CEO Anthony Pedersen said the administrator recovered more than R108-million for its medical schemes from providers who “acknowledged that the claim they submitted was not valid”. A further R300-million was recovered through “forensic interventions”. In some cases, fraud was obvious: one doctor billed for patients who had died, while another claimed to have worked 214 hours in a single day. But what exactly constitutes “wasteful expenditure” is, at least in some instances, a matter of perspective. Henru Krüger, chief operating officer at the Alliance of SA Independent Practitioners’ Associations (Asaipa), said doctors make clinical decisions and are not actively keeping track of financial consequences. When treating a patient, they do whatever is best for the patient. They are not thinking, “I’ve already sent five patients to hospital this month, if I admit another one it will push me over the national average”. Though Krüger concedes it is “reasonable” for doctors to prescribe less-expensive treatments, such as generic medicines, he is concerned about the unintended consequences of what he calls a “police-like” approach by medical scheme administrators - some of which have fraud detection systems to rival those of a bank or insurer. It is no secret that Medscheme is considered to have what it calls “the most advanced and comprehensive fraud, waste and abuse management service available to medical schemes in SA”. In one example cited by Krüger, a doctor who charged for an after-hours consultation was subjected to a “claw-back” by a medical scheme, after its forensics team concluded that the situation was “not a real emergency” and that the doctor could have seen the patient during office hours. The patient died in an ambulance on the way to the hospital. Claw-backs, whereby medical schemes halt payments, or withhold a portion of the payment to doctors who they believe are either fraudulent or wasteful, have become a serious issue, Krüger said. Doctors are looking at cancelling contracts with medical schemes and opting for cash, which would take us back nine or 10 years, and it’s all because of the big administrators. He fingers Discovery and Medscheme as the administrators that doctors should fear most, saying “Medscheme is very problematic with its forensic investigations”. Medscheme’s Pedersen, however, said that where abuse or waste is highlighted, it first corresponds with the providers to request clarification or documentation to support the amounts claimed. He said that in no instance are funds withheld without first allowing providers the opportunity to respond. To ensure the sustainability of medical schemes such monitoring is necessary, he said. Doctors, on the other hand, may feel understandably grumpy at having to spend precious time motivating for every clinical decision. Still, the problem of increased use of healthcare services - whether the fault of doctors or simply as the rising burden of lifestyle-related disease drives more people to use healthcare - is not going away. Discovery Health’s data shows that, over the past nine years, while consumer price inflation has increased by about 5.5 percent/year, medical claims inflation has risen 11.3 percent. The bulk of that difference, said CEO Jonathan Broomberg, is accounted for by the increase in the volume of services delivered to the average medical scheme member. He said every year the average patient has consumed 5.5 percentage points more than they did the year before. While the price doctors are charging has gone up by inflation, they are in effect providing more services every year. Council for Medical Schemes figures, meanwhile, paint a worrying picture of the distribution of medical scheme expenditure. For example, while expenditure on GPs amounted to R8.96-billion in 2016, total non-healthcare expenditure came to R14.1-billion, which is an increase of 8.5 percent from 2015. Even medical specialists (excluding radiology services, anaesthetists, pathology services and surgical specialists) claimed less than non-healthcare items at R10.24-billion. On the healthcare side, private hospitals and pharmaceutical companies are the major winners: medical schemes spent R56.61-billion on hospitals in 2016 (37.4 percent of total healthcare costs), while medicines dispensed by pharmacists and providers other than hospitals amounted to R23.95-billion or 15.84 percent of total healthcare benefits paid. Broomberg argues that administrators are not perversely given incentives to cut costs at the expense of quality healthcare. He said Discovery Health is paid a fixed fee per family, regardless of the claims paid by the medical scheme. What is needed, said Broomberg, is a focus on results. He said Discovery Health has been leading the charge to shift away from the fee-for-service system to what it calls value-based healthcare. What this means is that Discovery’s client schemes want to pay more for good healthcare outcomes, but less for poor outcomes. For example, it has recently developed a programme on which GPs can enrol to manage diabetics. If GPs follow the programme and their results are within the right, predetermined ranges, the medical scheme will reward doctors by paying them an extra payment, per patient, per month. In an environment as fragmented as this one, Broomberg argues that the “value-based” healthcare approach will improve quality of care and contain costs. Of course, not everyone agrees with this assessment, with some doctors worrying that administrators have too big a say in what constitutes “best practice”. But Broomberg responds that the clinical protocols developed on these and countless other treatment programmes are developed in conjunction with independent medical specialist groups and panels. Still, even where these interventions make sense - and in many cases they will, considering the extensive data on which they are based - the reality of what medical care actually costs should not be forgotten. Archer said there are ways to reduce private healthcare costs, but first you must understand what things do cost. One can only hope that the Competition Commission’s Health Market Inquiry, the provisional recommendations of which are expected at the end of May, will go some way towards establishing a more rational pricing system in healthcare.
Created at 2018/05/16 04:21 PM by Mediclinic
Last modified at 2018/05/16 04:21 PM by Mediclinic