Laura du Preez: Personal Finance,

MEDICAL schemes are supporting the Department of Health's proposals for a proposed bargaining forum in which the tariffs your scheme will pay on your behalf for medical services could, in future, be set.

The Board of Healthcare Funders (BHF), which represents medical schemes, says that if the bargaining forum is executed appropriately, it will bring about transparency in the pricing of private healthcare.

The BHF says it hopes the proposed amendment to the National Health Act will be fine-tuned during the parliamentary process to achieve what is intended, namely fair and reasonable prices for relevant healthcare services, which will have a knock-on effect on your medical scheme contributions.

On The National Health Bill

The Board of Healthcare Funders of Southern Africa supports the Minister of Health and the National Department of Health in developing and formulating legislation which provides for the establishment of a Bargaining Chamber, as it will, if executed appropriately, bring about transparency in pricing within the private healthcare environment.

We further hope that the parliamentary process will facilitate, in an objective and robust manner, the fine tuning of this legislation to achieve what is intended, i.e. fair and reasonable prices for relevant health services. The BHF will meaningfully participate in the process as we believe that the implementation will give rise to a downward pressure on the price of private healthcare, which in turn will have a knock-on effect on premiums paid by consumers. If this happens we would be addressing the issue of affordability and accessibility.

Laura du Preez: Personal Finance,

THE Department of Health, the Council for Medical Schemes, the Registrars of Long- and Short-term Insurance and National Treasury have agreed on a way to deal with disputes about health insurance policies that the medical scheme regulator believes could undermine the medical scheme industry. The National Treasury told Parliament's Finance Portfolio Committee meeting this week that the parties had agreed to changes to the Insurance Laws Amendment Bill in which it was proposed that the Minister of Finance would decide when a product was an insurance policy rather than a medical scheme. The Council for Medical Schemes previously warned the committee that insurance products could undermine all that the Medical Schemes Act had done to ensure that consumers can buy healthcare cover without being charged according to the state of their health or age. The parties have now agreed that the Minister of Finance will make regulations on health policies only in consultation with the Minister of Health and after consultation with both the medical scheme regulator and the Financial Services Board.

Slindile Khanyile: Business Report,

THE competition commission supports the National Health Amendment Bill and will not prosecute anyone implementing it for contravening competition rules, according to Nandi Mokoena, the commission's strategic relations co-ordinator. Mokoena was responding to the Hospital Association of SA (Hasa) argument that the bill would introduce price setting, which was anti-competitive. Mokoena said the latest version of the bill was less anti-competitive than the first draft, and had taken the commission's comments submitted to the Health Department into consideration. She said that the bill was limited to just the prescribed minimum benefits and did not relate to all the services in healthcare. In the initial draft, the Department of Health wanted to set minimum prices, but the commission opposed that because it believed people should go as low as possible, said Mokoena. The bill makes a provision for parties to bargain collectively and individually, using the national health price reference list.

Pat Sidley: Business Report,

WHILE Rome burns around us, and all but aid agencies are fiddling, one of the more interesting tunes being played by the fiddlers is familiar to many in the medical scheme and insurance worlds, although it is currently undergoing a slight orchestral rearrangement.

It is known as the "demarcation agreement" and its chorus drones with familiar repetitiveness. When proposed amendments to the long- and short-term insurance laws hit parliament last week, the new arrangement would have meant some uncomfortable changes for the insurance industry.

For the medical schemes industry, it contained profound changes as well - the types of changes regarding health policies that insurers would like to see.

For the Medical Schemes Council, it struck a loud and discordant note, so the regulator of the medical scheme industry will be most pleased that the bills have been held up to allow further input.

Slindile Khanyile: Business Report,

TWO bills that will shake up the health sector have been approved by the cabinet after revisions that took account of public submissions. The National Health Amendment Bill and the Medicines Control Bill will go to the state attorney before being tabled in parliament next Monday. The cabinet approved the laws, which will introduce drastic changes in the private healthcare sector, at its meeting on Wednesday. Sibani Mngadi, the Health Department spokesperson, confirmed that alterations had been made to the bills after the public comments were received.

Laura du Preez: Personal Finance,

THE Constitutional Court this week denied the Registrar of Medical Schemes leave to appeal against a Supreme Court of Appeal judgment confirming the right of a short-term insurer to offer gap cover medical insurance policies.

But despite comments from Guardrisk, the short-term insurance subsidiary of Alexander Forbes, suggesting that the matter has now finally been laid to rest, the National Treasury is proposing giving the Minister of Finance the final word on which health policies are legal and which are not.

This has led Patrick Masobe, the registrar, to counterpropose that the amendment should be made via the Medical Schemes Act and that the Minister of Health should be given the right to decide exemptions to the medical schemes legislation.

Masobe told Personal Finance he will meet with the National Treasury shortly regarding its proposal, which is contained in the Draft Insurance Laws Amendment Bill.

Slindile Khanyile: Business Report,

TEN of the country's 90 private healthcare brain specialists claimed more than 40 percent of the medical aid money spent on neurology even though they had seen fewer than 25 percent of the patients, sparking an investigation by the Board of Healthcare Funders (BHF). The investigation into the neurologists' billing and coding practices was started after data taken from 11 medical aid schemes showed that the 10 specialists had claimed more than R20 million of the almost R50 million the schemes had spent on neurology in 2006 and last year.

The board's spokesperson, Heidi Kruger, said these cases were being forwarded to the Health Professions Council of South Africa (HPCSA) for further investigation. Kruger said seven of the 10 neurologists were using specific codes which accounted for more than 60 percent of total utilisation. She said 83 percent of these doctors' income was from procedures where the industry average on procedure-based income was 69 percent to 70 percent. One of them made as much as 91 percent of his income from procedures. Kruger said that there was some kind of anomaly, but without further investigation she could not say, at this point, that fraud was involved.

On the National Health Bill

The Board of Healthcare Funders of Southern Africa supports the principle of collective bargaining between medical schemes and providers of health care services as it will, if executed appropriately, bring about transparency in pricing and ensure that fair and reasonable prices are paid for relevant health services.

In its submission made to the Director General of Health on the Bill, BHF identifies several areas where clarity is sought. Of particular concern is that there is no clarity on whether the amendments are intended to apply in respect of the private or public health sectors. It is also not clear whether they are intended to apply only in respect of medical scheme beneficiaries and medical scheme funded-health care or across the entire spectrum of private health care.

SAPA,

LISTED hospital group Netcare announced the appointment, with effect from June 1 2008, of Jerry Vilakazi, as independent non-executive chairman. He succeeds Michael (Motty) Sacks who, on January 25 2008, announced his intention to retire as chairman of the Board. Vilakazi holds a BA (Unisa), MA (Thames Valley), MA (London) and MBA (California Coast University). He is CEO of Business Unity SA. He was managing director of the Black Management Forum in 2004 to 2005, Public Service Commissioner (1999-2001), executive director of the SA Institute of Chartered Accountants (2001-2003), chief director for strategic planning at the Department of Home Affairs (1997-1998), and deputy director, affirmative action, in the Department of Public Service and Administration. He co-founded Execuprime, a black-owned training and consulting company specialising in human resources and organisational development. Among his directorships are chairman of the Mpumalanga Gaming Board, BMF Investment Company, Computershare and Execuprime.

Mike Waters: The Weekend Argus,

MINISTER of Health Manto Tshabalala-Msimang commented after a tour of Chris Hani Baragwanath Hospital several years ago that she would not ever want to have to attend that hospital.

Most South Africans do not have a choice, and one of South Africa's biggest challenges is to find ways to make a better quality of hospital care available to all South Africans.

The question, however, is should this be done by making the private sector more accessible, or by improving the quality of public healthcare? The DA believes we need to do both. The Health Minister, on the other hand, through her recently released amendments to the National Health Act, has focused on the former. A draft bill recently released by Tshabalala-Msimang proposes a tribunal to negotiate fees for private hospitals.

Private hospital fees increase at a rate significantly above the inflation rate every year and there is no doubt some action needs to be taken to tame these increases. And the Minister's proposed process will almost certainly have the effect of reducing hospital fees. However, the Minister makes the assumption that this tribunal can bring about steep price decreases and at the same time leave the private hospital sector untouched in all other ways. This will not be the case.

Rob Rose: The Financial Mail,

THERE is only one way to reduce the cost of your medical care, and that is "basically, not getting any", quips comedian Dave Barry. South Africans are well aware of this trajectory: their medical aid contributions have climbed 48% between 1997 and 2005 to R8 077/year - and that's with inflation stripped out.

Council for Medical Schemes (CMS) chairman William Pick says these higher costs are a key reason why only 14% of people are part of a medical aid, down from 20% a few years ago.

Hospitals have been largely blamed for cost increases, but this isn't the full story. Medical aid schemes themselves have also padded unnecessary costs into the contributions they collect from the 7,4m medical aid members in SA.

What is most alarming is that for every rand spent on medical aid, a greater chunk goes to "non healthcare costs" - money used to pay administrators and others who don't actively provide any direct medical benefit to consumers.

Slindile Khanyile: Business Report,
Regis Nyamakanga: Business Day,

LETHIMVULA Investments and Old Mutual South Africa (Omsa) are considering combining their healthcare businesses, a move analysts say is an effort to rescue sinking ships, which poses no threat to rival Discovery. Lethimvula and Omsa announced yesterday that they had signed a memorandum of understanding that aimed to combine the respective administration and managed care businesses of Old Mutual Healthcare, Medscheme and Rowan Angel. Medscheme and Rowan Angel are owned by Lethimvula. Old Mutual Healthcare administers nine schemes, which include Oxygen, Medgroup, Clicks and BHP Billiton. Medscheme has 16 companies including Bonitas, Liberty, Eyethumed, Sasolmed and SABC, while Rowan Angel looks after Spectramed. If the transaction goes through, the new company will service about 2.3 million people. Discovery has just over 2 million members.

On the proposed amendments to the National Health Act

The Board of Healthcare Funders of Southern Africa welcomes the Amendment Bill and supports in principle the proposal of a collective bargaining process.

It seems that the Minister of Health has taken to heart some of the issues raised by the medical schemes industry at the Healthcare Indaba in September 2007, as the Bill proposes an enforced cap for a tariff on Prescribed Minimum Benefits (PMBs).

Currently there is little transparency in pricing and costs of healthcare services because the NHRPL process is voluntary. The bargaining chamber process will compel transparency as all submissions will be subject to rigorous and robust scrutiny to arrive at fair and reasonable prices for healthcare services.

Health Minister Manto Tshabalala-Msimang has released The National Health Amendment bill, which was gazetted on Friday, 18 April 2008.
please click here to download the file

Lynne Carlisle: Business Day,

WIDESPREAD changes to SA's present range of prescribed medical benefits (PMBs), formally under review, have been proposed to the government by the medical schemes sector to make private healthcare affordable to more South Africans and extend cover to members.

Heidi Kruger, head of corporate communications at the Board of Healthcare Funders (BHF), says the concept of a standard, basic set of health services provided by every medical scheme for the protection of its members is laudable.

However, she says the current set of PMBs set out in the Medical Schemes Act of 1998, which consist of 271 referred-based conditions and 25 chronic conditions, have had many unintended consequences, including:

The Council for Medical Schemes released a report on medical cost increases
please click here to download the file

Application for exemption from the provisions of the Competition Act - 14 March 2008

The Competition Commissioner’s ruling of 2004 which was aimed at promoting more competition in the private healthcare market and driving costs down has had the opposite effect. Instead, since the ruling, expenditure within this sector has soared.

The Board of Healthcare Funders (BHF) has on behalf of its members, 85% of medical schemes in South Africa, applied for exemption from provisions of the Competition Act No. 89 of 1998 that prohibits the medical scheme industry from working as a collective on matters such as setting tariffs and defining patient benefits.

The application seeks to deal with a host of unintended consequences arising from a ruling by the Competition Commission in 2004 that banned collective bargaining in the sector. This has brought about concerns on the continuity and the productivity of the medical scheme industry as a whole.

The key areas which the Board seeks to promote through the application exemption are:

In response to the HPCSA warning to practitioners against colluding with medical aid schemes and preferred provider networks administrators

One of the reasons The Board of Healthcare Funders’ Forensic Management Unit (BHF_FMU) was established, was to ensure that the investigation of fraud and abuse within the private healthcare sector, was conducted in an ethical, transparent and legal manner. The BHF_FMU will under no circumstances condone illegal or unethical conduct by any of its members, however, will strongly support and encourage its members to recover any monies lost due to fraud and abuse. It must be remembered that any monies lost by medical schemes due to fraud and abuse, in fact belong to the members contributing to those schemes and the trustees have an obligation to ensure that these monies are recovered as far as possible. Fraud and abuse contributes significantly to the high cost of private healthcare and in order to ensure the sustainability of the industry needs to be dealt with decisively. The industry is not only under pressure from consumers to control the cost of healthcare, but also from government.