Brenthurst Hospital emergency room.photo by Simphiwe Mbokazi 453
Brenthurst Hospital emergency room.photo by Simphiwe Mbokazi 453

Minister warns of soaring health costs

By Londiwe Buthelezi. Time of article published Jul 31, 2012

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Minister of Health Aaron Motsoaledi wanted the Competition Commission to reverse its ruling and allow medical schemes to enter into price bargaining negotiations with the service providers because the absence of a bargaining forum was the route to spiralling health care costs in the country, he said yesterday.

Speaking at the Board of Health Funders (BHF) of Southern Africa conference, Motsoaledi said pricing in private health care was “abnormal and unacceptable. Even the World Health Organisation (WHO) wrote me a letter in 2010 saying ‘minister you can’t allow this’,” he said.

Motsoaledi said because of the commission’s 2004 ruling, which barred medical schemes from bargaining negotiations with service providers, pricing of health care had become the law of the jungle in South Africa. He said the vanishing of small schemes, almost halving the numbers between 2001 and this year, was largely a result of this ruling.

“Being in hospital now is like being in a supermarket but at least in a supermarket you are certain of prices. That ruling was a terrible ruling. It brought so much uncertainty,” the minister said.

Private hospitals were charging up to R18 000 for five-minute procedures such as womb cleaning that could be performed even by a medical student. Up to R30 000 was charged for perianal abscess treatment by some hospitals.

“People think I’m exaggerating when I mention these prices but I’m certain of them because it happened to a high ranking official of the WHO and she wrote me a letter and I saw the invoice,” he said.

Because medical schemes were struggling to bear this cost, they set medical aid tariffs and paid not even half the price of hospital invoices in some cases, leaving the patient to pay the rest. An invoice presented by the minister showed a total of R19 100.03 charged by a hospital to a patient and the medical scheme paid just more than R5 000, leaving the balance to the patient to pay.

“Then what is the use of having a medical aid if you have to pay that much? But I’m not able to blame a medical scheme for that because I understand where they are coming from.”

Motsoaledi said uncontrolled commercialisation of health care was happening in both the private and public health care sectors in the form of “tendercare” in the public and pricing in the private. The National Health Insurance (NHI) was the government’s response to address this and challenges of imbalance and access to quality health care, he said.

With the NHI, he said, the aim was that nothing must be left for patients to pay out of their pockets. Most of the population cannot use private hospitals. The fragmentation in the country’s health care system between the public and private sector was resulting in more money being spent with less health outcomes.

“All countries in the developed world are chasing the mandatory pre-payment system, which is (the) NHI in South Africa. Our health care system is even more commercialised than (the) US.”

BHF chief executive Humphrey Zokufa said the environment that the medical schemes found themselves in had become very adverse and was preventing them from doing what they were supposed to do in terms of the Medical Schemes Act. The BHF represents 95 percent of the medical schemes in South Africa, except Discovery.

BHF chairman Clarence Mini said the costs had spiralled further since the court ruling last year that schemes had to pay for prescribed minimum benefits in full. He said medical schemes were finding it difficult to bear the cost.

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