File picture: Pexels
File picture: Pexels

Rise in fraud puts healthcare costs in ICU

By Chelsea Geach Time of article published Jul 27, 2019

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Cape Town - Nowhere in the world does private health care cost as much as it does in South Africa.

Those were the words of international medical scheme expert Nir Kaminer, speaking at a Board of Health-care Funders conference in Cape Town this week.

In addition, medical aid fraud and waste and abuse are rife in South Africa, according to Jan Mothibi, head of the Special Investigating Unit.

“Fifteen percent of all medical aid claims are associated with fraud, waste and abuse.

“We have found that there is a whole lot of intentional misrepresentation from the sectors that we investigate,” Mothibi said

In the Western Cape, there were 47 cases of medical fraud investigated in 2017 and 53 cases last year.

There is a worldwide trend of medical aid schemes being drained by procedures that are not really needed and South Africa is no different.

Kaminer, from Ireland’s Medical Reviews International, said that part of the wastage comes from “supplier-induced demand”, doctors and hospitals recommending unnecessary surgeries to make more profits.

“Patients are under the impression that more is better - more diagnoses, medications and surgeries,” he said.

“According to the 2018 Competition Commission report, R24billion of the R160bn in claims paid annually was on unnecessary care.”

This included thousands of unnecessary caesarian sections.

The wastage was also widespread in orthopaedic care, where patients received joint replacements that were not medically required, he said.

There were also unexplained increases in the charges of specialists like dermatologists.

Dr Gunvant Goolab, principal officer of the Government Employees Medical Scheme, called for hospitals to be more transparent with regard to pricing.

“We’re the most unequal society in the world now and this inequality is most stark in our health-care system,” Goolab said. “The private sector is increasingly becoming unaffordable, and the public sector is increasingly under-resourced.”

He said that medical aid members often didn’t even understand the benefits and limitations of the product they pay for.

“There’s a clear call for a basic benefit package to simplify and standardise the product.”

Goolab said the bulk of private health-care claims paid went towards costs incurred in hospital, rather than for medicine purchased at a pharmacy, or doctor visits.

“Nearly R2 out of every R3 spent on private health care goes to in-hospital costs. Hospital pricing transparency will make health care more affordable.”

Even people who pay for private medical aid end up coughing up for chronic medication and other health maintenance costs.

Dr Rajesh Narwal, health systems advisor to the World Health Organisation, said this exposes members to out-of-pocket expenses and places the health system under more strain.

“Sixty to 80% of all expenditure on essential medicines comes out of pocket from private sources,” he said.

“Access to medicines keeps people healthy, keeps people away from hospital and in work. Making it unaffordable delays or restricts access. It can sometimes be a life or death situation.”

Why are medicines so expensive? Partly to blame is the long and complicated path they travel from the research and development stages, through trials, manufacturing, legal registration, all the way to being prescribed and dispensed to the user.

Another problem is that pharmaceutical companies often tweak their formula when their patent is about to expire, preventing cheaper generics from entering the market.

“It is the role of the government to take stewardship of the health system and work out policies for fair price setting. The policies make the difference between life and death in fact,” Narwal said. “The path is not easy, but I believe progress can be made in achieving medicine price transparency.”

Weekend Argus

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