Are medical schemes to blame for all ills?

We shouldn’t be surprised that there was an abundance of fingers being pointed at medical schemes, the chief executive of one of the country’s three largest medical scheme administrators told the Competition Commission inquiry into the private health market this week.

The inquiry, which is looking into practices that prevent, distort or restrict competition in the healthcare market, held three days of public hearings in Cape Town this week following hearings over the previous two weeks in Johannesburg and Pretoria.

In Gauteng, healthcare providers and medical scheme members made submissions to the commission in which they blamed medical schemes for not meeting their needs.

When Dr Jonny Broomberg, the chief executive of medical scheme administrator Discovery Health, appeared before the inquiry this week, he was ready with an explanation of why the panel, lead by former chief justice Sandile Ngcobo, was hearing so many complaints.

Schemes are in “a very difficult position in our healthcare system”. By law, they are not-for-profit entities that are required to “maintain the equilibrium between three competing dynamics”: providing significant benefits for members, maintaining affordable contributions and having in reserve 25 percent of gross contribution income, he said.

This results in schemes’ boards of trustees finding themselves in the “blame paradox”, Broomberg says.

Healthcare providers, such as doctors, want the freedom to treat scheme members in a way they deem fit. They want immediate access to new medicines and the latest technology for their patients; they want higher remuneration or a fair return on the capital investment in their businesses; and they don’t want to be over-burdened by administration, he says.

Members, in turn, want rich benefits, low contributions, simple products, no restrictions on their access to healthcare providers, medicines and technologies, no co-payments and excellent administration services.

“But I hope the panel will understand that it is impossible for a medical scheme to solve for all those demands,” Broomberg said.

He said it was “painful” to read the media reports and see the bad rap that schemes had been given at the inquiry's public hearings so far, but the bad press stems from a misunderstanding on the part of stakeholders that schemes are able to meet all of these demands.

The healthcare inquiry panel was clearly feeling that pain in the third week of the public hearings, too.

In questioning Discovery Health Med- ical Scheme’s principal officer, Milton Streak, Justice Ngcobo said the panel had heard how medical schemes resist paying benefits that they ultimately have to pay. One scheme member, with stage-four cancer, who had been keen to come before the panel, had died before she could highlight her struggle for benefits to prolong her life.

MEMBERS’ TALES

The public hearings opened with a submission by a medical scheme member, Angela Drescher, whose struggles over prescribed minimum benefits (PMBs) with Discovery and her dependants’ practitioners was first highlighted in this publication in June last year.

Drescher devoted hours of her time to working out how the PMBs – intended to protect you in all emergencies and when you have a serious condition – would ensure payment for the treatment her son needed for depression and the treatment her husband needed for an abnormally low sodium level in the blood, which, in its severest form can be life-threatening.

According to Drescher, “when trying to secure PMB cover, the general feeling is one of sheer desper a t i o n, f r us t r a t i o n, trauma, bullying and victimisation”.

As she and other members recounted, the difficulties include finding out if, indeed, your condition is a PMB, making sure all your claims have the right diagnostic or ICD10 code, completing the correct chronic medication and/or disease management applications with your scheme and often constant engagement with your scheme’s administrator to get claims paid.

Drescher’s struggles led to her involvement through social media with other medical scheme members engaged in battles with their schemes to get benefits to which they believe they are entitled.

Her submission cites the example of the member with stage-four cancer who died before she could speak to the commission; a pensioner with four chronic conditions who is entitled to only one general practitioner visit a year on a comprehensive plan; the mother of a child who suffered a brain injury in a motor vehicle accident and, despite obtaining a Council for Medical Schemes ruling in her favour, has had a three-year battle for benefits; and a baby whose treatment for a PMB asthma condition was declined by her scheme.

Drescher was just the first of a number of members with similar tales. One told of how a scheme denied surgery to treat an HIV-positive member’s painful growths he had developed as a side effect of antiretroviral treatment. And a couple told of their battles over medical bills in the thousands to treat their son with attention deficit hyperactivity disorder, autism and a genetic disorder that causes tumours to form on nerve tissue.

Ngcobo noted the panel also heard from doctors who claimed that schemes dictate what treatment they should give their patients and how much they should be paid.

TECHNICAL DETAILS

The public airing of members’ sorry tales and their doctors’ challenges may be cathartic, and perhaps the bad press will bring about some minor, but good, changes. But, as the hearings turned more technical this week, with presentations from administrators such as Discovery Health and Momentum Health, and schemes such as the Government Employees Medical Scheme, Bestmed and Cape Medical Plan, it was easy to forget you were watching a Competition Commission inquiry.

And I think the panel members also, at times, forgot.

Streak reminded Ncgobo that the healthcare industry is a complex one, there are administrative complexities and the PMBs are fraught from an administration point of view.

In reply, Ncgobo asked that if this complexity resulted in members not getting benefits on time and losing their lives, surely something had to be done.

A number of the submissions to the commission again highlighted the problem that arose a decade-and-a-half ago when the Medical Schemes Act was promulgated, compelling schemes to provide PMBs, set the same contributions for all members on a particular option, and admit any member who applies, with only certain regulated waiting periods and penalties.

In the absence of making membership mandatory and introducing the cross-subsidisation of risk, this regulatory regime has resulted in many sick people joining schemes only when they need to (known as anti-selection) and members in schemes with older, sicker members paying more than those in schemes with younger, healthier members.

The government’s proposal to introduce social health insurance was abandoned and now, after a hiatus, we have adopted a National Health Insurance plan. But the plan is wanting in many ways, especially on funding, but also on the role of medical schemes.

In the meantime, the financial health of the private healthcare user is declining and the public sector has yet to offer a viable alternative to those who currently have the means to opt out of it.

Replying to questions from the health inquiry panel this week, the chairman of the board of Discovery Health, advocate Mike van der Nest, warned that the private healthcare funding system was close to cracking, with providers accepting lower-than-normal increases and schemes sitting on billions of rands of reserves. It was “iniquitous”, he said.

Is the Competition Commission's health inquiry a bit like the surgeon who goes into an operating theatre to carry out a minor procedure, and then discovers, on cutting the patient open, that the patient is riddled with cancer?

For two decades, stakeholders have highlighted the failures of private healthcare and its funding. And even though Health Minister Aaron Motsoaledi has been attending the hearings, he has only restated the problems with which we are all familiar.

Who will resolve the issues? As consumers of private healthcare and healthcare funding, it is time to take a more activist role – to speak up like the ordinary people who bravely took to the microphones at the healthcare inquiry hearings these past three weeks.