Timing of Motsoaledi’s medical scheme plans raises questions
• Minister could at least have pretended to evaluate health market inquiry recommendations
The announcement last week by Health Minister Aaron Motsoaledi that a major shake-up of the medical scheme industry is on the cards raises more questions than answers. According to statements made to Business Day, Motsoaledi presented a raft of proposals related to the Medical Schemes Amendment Bill to an undisclosed cabinet committee, including newrules on benefits, prices and governance. Crucially, the amendments will enforce uniform tariffs for services and prohibit copayments.
The merits of the proposed changes aside, I can’t help but wonder why there was such a rush to announce these changes before the publication of the Competition Commission’s health market inquiry provisional report at the end of May.
The inquiry’s findings and recommendations were expected at the end of April, but it was announced in that month that the deadline would be pushed out to May 31 “to afford HMI [health market inquiry] experts sufficient time to assess and interrogate submissions raised in stakeholder responses”.
It is difficult to believe that after almost five years the inquiry is still accepting submissions “as recently as April 13”, but what really bothers me is that the minister couldn’t wait another two weeks until after the report was published before presenting these new changes to a cabinet committee.
Even if he did present them to the committee, why make it public? Surely after so many years and so much effort from everyone in the industry, he could at least have pretended to evaluate and interrogate the recommendations before proposing new legislation.
After all, it was Motsoaledi who instigated the inquiry to investigate the rising cost of private healthcare in SA, specifically internal dynamics that may limit or restrict access to private healthcare. In short, he hoped to improve transparency in the sector and get to the bottom of what is driving above-inflation increases in the cost of private healthcare. So why not wait to hear the answer?
It has long been held by some in the private healthcare sector that it has always been the minister’s plan to use the findings of the inquiry as a pretext for future price regulation of hospitals and doctors. Others maintain it is part of a broader strategy to demonise the private healthcare sector to pave the way for National Heath Insurance (NHI), but in truth the issue is probably more complex than that.
For several years I have felt the minister has for political reasons been held back from implementing his own vision for SA’s healthcare system. He has made no bones about his fury at the costs of private healthcare and has consistently argued that he wants a better deal for the public from private healthcare providers — and he’s absolutely right. The cost of medical aids has been rising in excess of inflation for years, making the cost of access to privatemedical care increasingly beyond the reach of the middle class, let alone those earning less than R7,000 a month.
Back in 2016, there were rumblings of political interference when the Council for Medical Schemes unexpectedly announced that the introduction of low-cost benefit options would be suspended indefinitely — rumblings that were confirmed later.
I don’t think the ANC government knows what to do with SA’s healthcare system.
Although public spending on health has been stable for several years and accounts for about 14% of total government expenditure, there simply isn’t any more money to go around.
The minister has undoubtedly had considerable pressure placed on him by the powers that be to lead the charge for a utopian dream of universal access to high-quality healthcare in the form of the NHI, but this just isn’t possible in the medium-term fiscal framework, or possibly, ever. If the minister is serious about improving healthcare, in both the public and private sectors, he should be looking at health outcomes and not how many are serviced.
As it stands, the country’s fee-for-service structure in the private healthcare sector creates a perverse incentive that if something goes wrong, the hospital and related service providers are paid more.
As I understand it, rates medical specialists and hospitals charge have been increasing at about the rate of inflation, but the per-capita volume of services has been increasing by several percentage points annually. What this suggests is that inefficiency and overservicing might be the root of the problem and not medical costs.
If this is the case, what is needed is an outcomes-based reimbursement structure that pays providers based on the quality of their outcomes. If doctors were evaluated more on clinical outcomes, they would be more inclined to think carefully before running expensive diagnostics. The same applies to hospitals — if a system were in place to reward service providers for fewer repeat admissions, there would be an incentive to fix the problem the first time.
Pitfalls are associated with every approach, but it is clear that the current fee structure isn’t working.
Healthcare outcomes have remained the same, and have in some instances even become worse, and costs have increased. In many cases it may be that we are woefully unaware if outcomes are being achieved optimally, since this is not measured. This is what needs to be interrogated.
Until a start has been made to evaluate the public and private healthcare sectors on their outcomes rather than their inputs, a solution will not be found.
Yes, there are monopoly and monopsony elements in the private healthcare sector, but this is not the root cause of the gross inequality that exists between those who are treated in private or public hospitals.
WHAT THIS SUGGESTS IS THAT INEFFICIENCY AND OVERSERVICING MIGHT BE THE ROOT OF THE PROBLEM AND NOT MEDICAL COSTS