THE Health Professions Council of SA (HPCSA) has announced that it has constituted 12 new professional boards. A statement from the organisation said the inauguration of the new boards effectively meant new management for the HPCSA, as the chairpersons of these boards would serve for the next five years as members of the council at the HPCSA. The Professional Boards run the activities of Council and are responsible for regulating the health professions which are within its mandate. They are responsible for regulating the registration, education and training, professional conduct and ethical behaviour of their professions.

The boards include academics, health experts, representatives from institutions and the government.

SAPA, 11 August 2010

Blow for state as court scraps tariff guide for doctors' fees

THE North Gauteng High Court has scrapped the Department of Health's controversial tariff guide for doctors' fees, dealing a blow to Health Minister Aaron Motsoaledi's attempts to control prices in the private healthcare sector. The ruling, handed down yesterday, means the department has to go back to the drawing board to devise a new system for determining rates for the private health sector. Resolving the issue is vital for the government's plans to introduce national health insurance (NHI). Under the proposed NHI scheme, the state would contract directly with doctors so that patients do not have to make payments in advance. The National Health Reference Price List was introduced via regulations to the National Health Act in 2007, and was punted by the department as no more than guidelines for private healthcare as it would have been at odds with the Competition Act if it had prescribed the fees. But in practice the guide has been used by medical schemes to set limits on the rates they would pay service providers such as doctors and specialists.

The Hospital Association of SA, emergency services ER24 and Netcare911, and the South African Private Practitioners' Forum joined 22 specialist groups to challenge the validity of the reference price list, a case that was heard in February. At issue was the way the department had determined the fees spelt out in the list, which the applicants argued bore no relation to the cost of running a business. They also challenged the way the department interacted with the parties affected by the tariff guide. Yesterday, Acting Judge Piet Ebersohn ruled that former health director-general Thami Mseleku, now ambassador to Malaysia, had failed to comply with the constitution and had acted in a manner that was procedurally unfair. He described Mr Mseleku's action as "one of disdain and disregard" for the rights of the Hospital Association, which had tried in vain to get the department to consider its proposals for establishing a methodology for determining hospital fees. No suitable methodology was established for private hospitals or private emergency services, yet fees were published for these parties, a process the judge described as "irrational and unreasonable".

Judge Ebersohn ruled the regulations to the National Health Act that established the reference price list to be invalid and set them aside. He made a sweeping costs order requiring the department to pay not only the applicants' legal costs but also for the research that formed the basis of their submissions to the department, including two surveys commissioned by the Hospital Association from PricewaterhouseCoopers and Deloitte. Practitioners' Forum head Dr Chris Archer was "relieved" by the judge's findings, but he declined to comment further until he had studied the ruling. Hospital Association CEO Kurt Worrall-Clare said Hasa was very pleased felt vindicated. He added that the association did not see itself in opposition with the Health Department on this or any issue, and hoped that their relations from this point could be constructive and engaging. The department's spokesman, Fidel Hadebe, declined to comment, saying officials had yet to study the judgment. Heidi Kruger, spokeswoman for the Board of Healthcare Funders, said the underlying principle of tariffs was not in question, and that was encouraging.

Tamar Kahn: Business Day, 29 July 2010

Medi-Clinic spends big in SA

PRIVATE hospitals group Medi-Clinic Corporation may be raising money to fund expansion in Switzerland, but that does not mean local operations are being neglected in any way. Medi-Clinic's latest annual report showed the company had set aside R850m of capital expenditure for its southern African operations in the financial year ahead. Writing in the latest annual report, Medi-Clinic Southern Africa CEO Koert Pretorius said the company would spend R402m on capital projects and new equipment to enhance its business in the region. He also disclosed that R213m would be earmarked for the replacement of existing equipment and another R236m for repairs and maintenance. Pretorius said the capex would be funded from operational cash flow. In mid-June Medi-Clinic announced a R1.4bn rights offer to fund growth opportunities for Hirslanden, its private hospitals subsidiary in Switzerland. Medi-Clinic spent about R315m on capital projects and new equipment in southern Africa, R194m on the replacement of existing equipment and over R200m on the repairs and maintenance of property and equipment in the year to end-March 2010. Pretorius said incremental earnings before interest, tax, depreciation and amortisation stemming from recent capital projects should amount to R32m in this financial year, and R90m in the 2012 financial year. Medi-Clinic's new 140-bed Cape Gate Medi-Clinic in the Western Cape was commissioned in February 2010. Pretorius reported that Cape Gate occupancies were above budget. He said other significant projects that had commenced were the addition of 74 beds at the Nelspruit Medi-Clinic, 30 beds at Limpopo Medi-Clinic and 28 beds at Tzaneen Medi-Clinic. Pretorius said a project for Muelmed Medi-Clinic in Pretoria comprising an additional 57 beds, 12 additional obstetric beds with three labour rooms and four neonatal ICU beds had also been approved. He said the number of beds at Medi-Clinic's local operations was expected to increase from 7 035 to 7 077 during the financial year ahead.

Marc Hasenfuss: Fin24.com, 23 July 2010

THE Council for Medical Schemes Appeal Committee will be asked to reconsider the obligation on medical schemes to pay claims related to the prescribed minimum benefits (PMBs) in full regardless of the rate charged by a healthcare provider. The issue affects members' rights to enjoy full cover from their medical scheme for essential healthcare and the cost to the scheme of providing that right. Schemes fear that the obligation to pay PMB claims regardless of the rate charged could increase the cost of claims, which will ultimately affect the contributions members pay to your scheme. The matter came to a head with two Council for Medical Schemes Appeal Board rulings late in 2008. The rulings held that schemes may not pay PMB claims at the rate at which a scheme reimburses claims but must pay these claims at the rate charged by your doctor, hospital or any other healthcare provider. Now Fedhealth hopes to convince the medical schemes regulator to adopt a different view by appealing to its Appeal Committee against a ruling made by the office of the Registrar of Medical Schemes last month. In terms of the registrar's ruling, Fedhealth was ordered to pay about R2 700 for PMB claims to two doctors who charged more than the rate at which the scheme reimburses claims. The surgeon and the anaesthetist treated a Fedhealth member who had serious injuries after almost dying in motor vehicle accident and who was in intensive care for five weeks.

Katy Caldis, Fedhealth's chief executive officer, said Fedhealth had paid about R650 000 of the member's medical bills to date, but the two doctors charged at a rate that was above 300 percent of the guideline Reference Price List (RPL) tariffs. The maximum rate at which the option to which the member belongs pays for claims is 300 percent. Most schemes base their rates on the RPL, and 300 percent is one of the highest rates that schemes pay. However, doctors and other healthcare providers are increasingly charging above the rates typically paid by medical schemes, because they believe the RPL rates, published by the Department of Health, do not reflect the costs of running their practices. The RPL is being challenged in a High Court case in which judgment is awaited. The registrar's ruling against Fedhealth is based on a regulation issued under the Medical Schemes Act, regulation eight, that states that medical schemes must pay claims for PMBs in full and without charging members any co-payments. There are different interpretations of what "pay in full" means, but since late 2008 the Council for Medical Schemes has followed the interpretation of the Appeal Board in cases against Samwumed, a restricted scheme for municipal workers, and the Government Employees' Medical Scheme. The Appeal Board is a statutory body to which appeals against the council's Appeal Committee rulings are referred.

Caldis said Fedhealth believed the Appeal Board's interpretation of regulation eight was incorrect. She said Fedhealth and its administrator, Medscheme, and a number of other medical schemes in February this year obtained a legal opinion from senior counsel "which indicated that 'payment in full' as referred to in regulation eight ... means that PMBs should be paid at full costs but subject to the scheme's tariffs in terms of the scheme rules and not simply the full invoice price". Caldis said the legal opinion the medical schemes and Medscheme obtained indicated that the way in which the Appeal Board and, as a result, the Council for Medical Schemes had interpreted or were interpreting regulation eight to mean that schemes must pay the full costs of a PMB in line with the invoice price was beyond the powers of a scheme as provided in terms of the Medical Schemes Act. She said the senior counsel told the schemes that if they followed the Appeal Board's interpretation, they would be acting illegally, because they would be forced to pay claims outside of their registered rules. Caldis said Medscheme, Fedhealth and a number of other medical schemes met with the Council for Medical Schemes to convey the schemes' view on the matter based on the legal opinion they had obtained. The Board of Healthcare Funders met with Dr Aaron Motsoaledi, the Minister of Health, and the council on the matter in February this year. Caldis said at that meeting the Minister recommended that the words "pay in full" in regulation eight must be revised to limit any unintended consequences. She said Motsoaledi further stated that there must be a moratorium on all action against schemes by the council until the issue had been resolved. However, at a PMB workshop it hosted earlier this year, the Council for Medical Schemes said that in its view the law as it stands must be followed until it is amended by Parliament.

'PMBs cause schemes endless problems'

The PMB regulations were poorly drafted and the meaning of these regulations causes medical schemes endless problems, a trustee of a smaller scheme who does not want his scheme to be named says. A trustee cited some examples of the problems his scheme is facing:

• A member who was dying of cancer and who was in a coma was sent for a diagnostic scan for oncology treatment a few hours before he died. The member had been treated by another oncology practice for three months, during which time he had various scans, for which the scheme paid. These doctors had sent the patient home because they could do nothing more for him. The new doctor refused to review the patient's case notes on file and wanted to start the diagnostic procedures all over again.

• The office of the Registrar of Medical Schemes ruled that boots worn by a child before a surgical procedure for a clubbed foot should be paid for as a PMB. The boots were classed as a necessary external appliance, and the scheme fears it may be open to abuse if other practitioners are similarly able to class anything from crutches to computerised wheelchairs as a necessary external appliance.

• A member involved in a motor vehicle accident incurred medical bills of R1 420 426. The scheme paid R1 247 612 - claims for the balance of R172 814 were submitted as PMBs. These claims relate to out-of-hospital expenses such as acupuncture, wheelchairs and pharmacist accounts, and one claim is for headphones used while in hospital. The trustee says the registrar's office has taken the view that any account after the accident should be covered in full. The scheme believes that at some point ongoing medical accounts can no longer directly relate to the accident. The scheme believes it cannot be expected to pay for every future medical account as a PMB.

• The scheme is paying excessive rates for stents (usually inserted to relieve obstructed blood vessels), because their cost can be claimed as a PMB. The scheme has managed to negotiate a discount on only one stent, because stent manufacturers have told the scheme they will only negotiate with doctors. The scheme is questioning why it has to pay inflated prices for stents rather than the actual cost to the supplier.

• An anaesthetist is regularly charging a higher rate for his PMB services than he does for his non-PMB services. The medical scheme believes this is blatant abuse of the system.

Controversial regulation 'is on task team's agenda'

The medical schemes industry task team set up to address the implementation of the PMBs is "back on track" and will consider a controversial regulation that forces schemes to pay PMB claims regardless of the cost.

Medical scheme representatives were unhappy about the exclusion of regulation eight (issued under the Medical Schemes Act) from the task team's agenda and questioned their continued role in the task team.

But Boshoff Steenekamp, the Council for Medical Schemes's strategic projects specialist, told Personal Finance that all the medical scheme, healthcare provider and consumer group representatives who were elected to the task team have agreed to continue the team's work.

The team aims to develop a code of conduct on PMBs that is binding on all healthcare providers and schemes by the end of this month.

Steenekamp says the task team will consider the problems that schemes are having with implementing regulation eight, but the issue of the rate that providers can charge for the PMBs is "more difficult to deal with, as we cannot set tariffs in this forum".
However, Rajesh Patel, the head of the benefit and risk department at the Board of Healthcare Funders who is also a member of the PMB task team, says his understanding is that regulation eight is firmly on the task team's agenda.

He says it was agreed at the task team's most recent meeting that while the team cannot change the law, there is no reason the team cannot consider a proposed redraft of the regulation, which can be sent to the Minister of Health.

PMB task team member Neil Nair confirmed that he is continuing as a member of the team despite a previous request to give the task team's scheme representatives time to consult about the exclusion of regulation eight from the agenda.

Nair is the principal officer of Samwumed, a low-cost restricted scheme for municipal workers. He believes that compelling schemes to pay PMB claims at whatever rate a healthcare provider charges will make Samwumed unaffordable for its members.

Laura du Preez: Personal Finance, 3 July 2010

ACCORDING to a new "State of Our Public Hospitals" report there has been a 17 percent hike in the number of people seeking treatment at Australian hospitals in the last five years. The report said that there were 4.9 million and 3.3 million admissions to public and private hospitals in 2008-09. Emergency department load increased by 22 percent from six million in 2004 to over seven million in 2008-09. The cost of average hospital admission has risen by 14 percent over and above inflation from $3 930 to $4 471 at 2008-09 prices. Regarding elective surgeries the report said that there were 595 009 admissions with mean waiting time of 34 days and 86 percent surgeries were conducted well within time. This was a two percent rise over the previous year. Number of available beds in public hospitals was 56 478 or 67 percent translating to 2.5 beds per 1 000 population. The total health budget was $103 billion in 2007-8 (the most recent data available) and of this, $30.8bn was spent on public hospitals and about $7.7bn was spent on private hospital services. Health Minister Nicola Roxon announced that with the increase in hospital burden the government had decided on a hospitals reform plan to cope with the load. She explained that under the plan there would be a focus on primary healthcare with an increase in general practitioners. Focus would also be on preventive health and better control and management of chronic diseases. This would go towards reducing admissions, she said

News-Medical.Net, 30 June 2010

KEEPING a medical scheme sustainable and affordable for its members in a difficult economic climate can be quite a juggling act - it's a delicate balancing act, says Katy Caldis, principal officer of Fedhealth.

"A medical scheme is a not-for-profit trust owned for the members by the members, and its only source of income is member contributions. From the pot of money accumulated we need to cover our members' healthcare needs cost-effectively and efficiently.

"In so doing we are bound both by the rules of the scheme and the legislative environment in which we operate.

"Paramount to our continued existence is ensuring that there are adequate funds to meet our obligations, which means not only prioritising expenditure but also ensuring that we manage to balance all member needs and keep contributions affordable."

The dilemma, says Caldis, is that members want as much cover as possible. However, they often fail to understand that it comes at a price. It is therefore often too easy for members to fall into the trap of selecting the cheapest option available without understanding the resultant loss in benefits.
A member selecting an option based on affordability rather than their healthcare needs should be fully aware of the risk of having to cover certain costs out of their own pockets.

"From a scheme perspective we need to ration the available funds carefully to ensure we are covering the right things."

She says hospital bills are the most expensive bills most of us present to our medical aid.

Caldis says this is an area where Fedhealth has tried to reduce some of the expense to members, who on many other schemes end up paying for many of these bills out of their medical savings accounts.

"We remain the scheme that pays for more benefits from risk than any other scheme.
"Our trauma cover, for example, comes out of risk, and that helps to extend members' day-to-day cover.

"We also pay for about 60 procedures that are done in a day clinic out of our hospital benefit, as well as for CT and MRI scans. And should you need rehabilitation once you're discharged from hospital, Fedhealth pays for 30 days of post-operative rehabilitation."

The scheme also offers a threshold benefit option, depending on the options members choose, where if you run out of benefits in a particular year, once you hit a certain threshold you are covered by the scheme again.

For families with young adults struggling to become financially independent it provides cover for financially dependent children at child rates until they turn 27.

Caldis says it all comes down to understanding risk.

Many people on medical schemes are still stuck in the medical-aid mindset of years gone by when medical costs were covered by a third-party payer and benefits were virtually unlimited.

"People never even saw their medical bills, and many still do not realise that their medical bills are their own responsibility - the schemes are merely there to assist with those costs. Also, doctors are not trained to consider the impact of costs and I would like to see medical aids working more closely with doctors in future.

"Our aim is to bring together the member, the doctor and the scheme, to the best advantage of all parties. A rising tide of information, has seen consumers becoming more educated, but still not sufficiently to know what questions to ask their doctors.

"One of the main problems with the system is that the financial onus is on the member. If a doctor says you need this test, who are you to argue?

"Our challenge in the future is to find a way of ensuring that healthcare remains affordable - at least for the few who are privileged enough to afford it. Our only hope in achieving this is to work with doctors and specialists so that they begin to understand our world and the impact that their decisions have on everyone in the system.

"Too often funders and healthcare providers find each other at opposite poles. While managed care protocols may cause bureaucracy and red tape for members and doctors, without these interventions cost escalation would be even worse."

Caldis says one of the biggest challenges has been that medical inflation has outstripped normal inflation year on year for more than a decade.

"This has resulted in higher contributions from members and a general reduction in incidental or out-of-hospital care due to the higher cost of more serious cover. One of the major cost drivers of medical inflation is the introduction of new technology and new medicines.

"The healthcare environment is the only industry I know where new technology pushes up the cost instead of making things more affordable. We all want progress but at what cost? Who are the ultimate beneficiaries?"

She says that the cost of new specialised medication - for example biological drugs - is equally of concern, as desperate people will pay desperate prices for a chance at life without questioning whether the efficacy of the drug always merits the enormous price tag.

"Within this highly charged environment board members of medical schemes are required to make extremely difficult decisions. This is done in association with clinical funding experts who evaluate each new drug and technology, its cost-effectiveness and affordability for our system.

"If we had unlimited resources, choices would be simple, but sadly we need to cover almost unlimited demand with a clearly finite pool of resources that needs to be rationed equitably over all the competing needs.

"Working together towards a common goal of a sustainable industry is the only way forward and the first step in achieving universal coverage for all South Africans," says Caldis.

Mandy Collins: Health News: Business Day, 30 June 2010

PHARMACIES are now able to stock up with a vaccine against the H1N1 strain of flu, according to the Pharmaceutical Society of South Africa (PSSA). For 2010, the World Health Organisation designated that a vaccine for influenza A H1N1 strain should be included amongst three contained in the seasonal influenza vaccines. The vaccines are usually made available in the public and private sector. However, this year, due to the low yield of one of the strains of virus, manufacturers were unable to supply vaccines in sufficient quantity. This meant that until now the vaccine was not available through the private sector community pharmacies. However, as part of the Department of Health's recent influenza vaccination campaign, it became possible to obtain additional supplies of the relevant vaccine. The PSSA said that community pharmacies would make the vaccine available to high-risk patients at a nominal charge.

SAPA, 29 June 2010

THAT US drug maker Merck & Co has entered into a co-promotion deal with local pharmaceutical firm Adcock Ingram should be no surprise. With increasing price and regulatory pressure in North American and European markets, multinational pharmaceutical companies have begun pursuing deals with generic drug makers in emerging markets. Two years ago, Japan's Daiichi Sankyo acquired a majority stake in India's biggest generic drug maker, Ranbaxy. UK-based GlaxoSmithKline has tied up with Africa's biggest generic drug maker, Durban-based Aspen Pharmacare. Faced with growing competition from generic drug makers, more and more blockbuster drugs reaching the end of their patent life, and a dwindling product pipeline, the multinationals have sensibly tried to broaden their global exposure with deals of this kind. The numbers say it all: research company IMS Health forecasts that emerging markets will grow at 14%-17% through to 2014, while markets in North America and Europe will grow at just 3%-6%, reversing the pattern of the past five years.

Nick Wilson: The Bottom Line: Business Day, 25 June 2010

MANY unnecessary deaths could be averted if patients infected with both HIV and tuberculosis (TB) were diagnosed and treated earlier, a study at Edenvale hospital in KwaZulu-Natal has found. The study provided evidence of the devastating toll TB was taking on people infected with HIV who do not have adequate access to healthcare, said Ted Cohen, assistant professor at Harvard Medical School and lead author of the study, published this week in the journal PLoS Medicine. Prof Cohen and his colleagues conducted autopsies among 240 adults who died at Edenvale hospital in a 10-month period between 2008 and last year, in a bid to understand the extent to which TB contributed to deaths in people who were infected with HIV. They found 94% of the patients were HIV-positive and half of them were being treated with TB drugs when they died. But many of the patients who were on TB treatment were still carrying active bacteria, suggesting they had been diagnosed too late to alter the course of the infection. Prof Cohen said the mean time between admission and death was less than a week, adding that most of them were getting the right drugs, so if they had been diagnosed earlier their lives would not have been lost. The researchers found 17% of the patients with TB had undetected multidrug-resistant strains, and suggested this may be the case with many more people infected with HIV. TB infection in people who have HIV is often harder to diagnose. The most widely used TB tests look for tuberculosis bacteria cultured from sputum samples, a process that can take weeks. In patients who have HIV, sputum samples often give a false negative for TB - either because there is too little bacteria in the sputum to be detected, or the disease has taken hold outside the lungs. SA had introduced a policy that says anyone infected with HIV should routinely be tested for TB and vice versa, but in practice testing levels were "quite low", said Paula Akugizibwe, an activist with the AIDS and Rights Alliance for Southern Africa, "because of lack of infrastructure and resources”.

Tamar Kahn: Business Day, 24 June 2010

EMPOWERMENT group Brimstone Investment Corporation will retain a bigger stake in newly listed Life Healthcare Group Holdings than originally envisaged. Brimstone announced it would unbundle 9.4% of its remaining 15.6% stake in Life to shareholders and retain a stake of 6.2% in the business. Brimstone initially held a 21.5% stake in Life, but sold off a 5.9% stake to facilitate the listing of the business. Earlier indications were that Brimstone would want to retain a stake of only 2.98% stake in Life. But demand for Life shares ahead of its listing was not as strong as anticipated, which meant slightly subdued placement prices. The value of Brimstone's retained stake in Life is worth close to R900m, while the unbundled stake is worth over R1.5bn. Brimstone indicated that the unbundling would take place via Health Strategic Investments Limited (Health), which would be listed on the JSE as an asset back security in mid-August this year. Health will house both Brimstone and Mvelaphanda Group's unbundled assets. The only asset of Health at the time of listing would be a 26.6% direct holding in Life. The unbundling proposal would see Brimstone shareholders receiving 40 Health shares for every 100 Brimstone shares held. Brimstone CEO Mustaq Brey said the unbundling would result in the company's shareholders having a clear see-through interest in Life Healthcare. He said it would allow them to trade their interest in the company separately to their Brimstone shares, adding that the unbundling could therefore potentially unlock significant value for shareholders. There is, however, a six month lock in period that forms part of an earlier agreement with Life. At the end of the lock-up period, the Life shares held by Health would be unbundled to Health shareholders. Mvelaphanda Group also announced its plans for the unbundling of its remaining shareholding in Life Healthcare. The Mvela Group would hold about 17.4% of Life Healthcare. The company will unbundle about 14.2% to Health, while remaining 3.2% will be held back for the benefit of the company's preference shareholders. The preference shareholders provided the R380m capital that was used by Mvela to acquire its Life Healthcare interest.

Marc Hasenfuss: Fin24.com, 23 June 2010