Laura du Preez: Personal Finance,

MEDICAL scheme beneficiaries' use of private hospitals declined over the five years to the end of 2006, but this had no positive effect on claims paid to hospitals per beneficiary, which showed a real increase over the same period. This is according to research released this week by the Council for Medical Schemes.

The research contradicts arguments by the Hospital Association of South Africa (Hasa) that an increase in the utilisation of services, rather than tariff increases, is driving up private hospital costs, which are, in turn, pushing up your medical scheme contributions.

The study also reveals that over the past five years there have been higher rates of increases in what medical schemes spend on your claims than there have been in members' contributions.

Average contributions increased by 34.7 percent over the five years from 2002 to 2006. The increase in real terms (after inflation) was 11.2 percent over the five-year period, or 2.7 percent a year.

Claims paid by schemes increased in real terms by 20.1 percent over the five-year period, or 4.7 percent a year, the report says.

Pressure from providers

The higher increase in claims despite the decline in the use of private hospitals is attributed to cost pressure from healthcare providers. Private hospital admissions are regarded as one of the major drivers of costs in medical schemes.

However, members' utilisation of specialists - another major source of costs for schemes - has increased, the report shows.

Patrick Matshidze, the head of the council's benefit management unit, says many specialists charge at rates that are three times as high as those in the guideline National Health Reference Price List tariffs.

The effect of the increase in members' use of specialists is an increase in your contributions, or, in some instances, reduced benefits or a limit on your access to these doctors' services, he says.

In a recent presentation to Parliament's portfolio committee on health, Hasa provided statistics from the three major private hospital groups that showed there had been a 13-percent increase in medical scheme hospital admissions between 2002 and 2006. It said admissions had increased from 920 000 medical scheme beneficiaries in 2002 to about 1.03 million in 2006.

But the Council for Medical Schemes's latest report on trends in medical scheme contributions, membership and benefits shows that in 2002 there were 231.6 beneficiaries in every 1 000 who were admitted to hospital. By 2006, this had dropped 25 percent to 173.7 beneficiaries for every 1 000. The number of beneficiaries admitted to day clinics also declined - by 29 percent - the Council for Medical Schemes's report says.

Annual expenditure on private hospitals per beneficiary in 2002 was R2 023.56 and it increased to R2 483.84 by 2006 - an increase of 22.85 percent in real (after-inflation) terms, the report says. Expenditure on ward and theatre fees increased consistently in real terms over the five years, with total real increases of 34 percent and 32.1 percent respectively.

Matshidze says the council's figures are based on schemes' audited financial statements. He says the council would like to see the hospitals' data to see what the differences are.

Matshidze says in an attempt to understand what is driving medical scheme costs, the council is also busy with research into the mix of hospital cases for which schemes paid and the variations in the prices paid for those cases.

An earlier report prepared by the office of the Registrar of Medical Schemes commented on data on the length of stays of private hospital users. It said this, when seen together with high (albeit declining) admission rates, indicates that patients who are not very ill are being admitted to hospital.

Fewer visits to dentists

An analysis of the five-year trends also showed that on average medical scheme members are claiming for fewer visits to general practitioners (GPs) and dentists than they were five years ago.

However, the number of beneficiaries who made at least one visit a year to a GP that was paid for by their scheme had increased.

In the case of dentists, there was both a decrease in the use of their services and a 28.3-percent decrease in claims paid to them per beneficiary in real terms.

The rate at which medical scheme members are using the services of pathologists, radiologists, physicians, paediatricians, gynaecologists and anaesthetists is described in the report as high in 2002, with the use of each speciality recorded at more than 100 visits a year for every 1 000 beneficiaries.

According to the report, by 2006 utilisation of the services of pathologists had increased by 33.7 percent, followed by paediatricians (16.6 percent) and physicians (14.7 percent).

The use of radiologists and anaesthetists increased by 7.4 percent and 0.9 percent respectively.

There was also a general increase in the amount that schemes spent on specialists, with expenditure on anaesthetists per beneficiary increasing by 89.3 percent over the five-year period, expenditure on pathologists increasing by 87 percent and expenditure on radiologists rising by 51.8 percent.

These trends were maintained when the figures were adjusted for inflation, the report says.

Matshidze says there are myriad factors that could be behind these trends, and the Council for Medical Schemes still has to investigate some of them further.

However, Matshidze says, the benefit structure of many medial schemes is such that you, as a member, can go straight to a specialist without seeing a GP for a referral first. It appears, he says, that many scheme members are going straight to specialists.
Matshidze says the council does not have a fuller understanding of why there has been such a steep increase in scheme members' use of radiologists and pathologists.

He says it is also difficult to say what is behind the decrease in members' claims for visits to dentists, because most schemes provide benefits for these services, although hospital plans and some low-cost schemes options do not.

Matshidze says certain changes during the five years to the end of 2006 - such as the introduction of cover for certain chronic conditions as benefits schemes must provide - will have affected schemes, but the impact of these changes was not the focus of this research.