The Competition Commission’s Market Inquiry into the Private Health Care Sector resumed public hearings in Pretoria yesterday after extending the period of public hearings.

The South African Nursing Council, the Office of Health Standards Compliance, Medscheme and the Free State Department of Health are some of the stakeholders that are expected to make oral submissions to the inquiry during the next three weeks.

Urologist and health economist, Dr Izak Fourie kicked off the presentations, followed by Stephen Laufer and Professor Andrew Sarkin.

Fourie declared that he holds an indirect minority share in Insight Actuaries and Consultants, as well as Nurture Health, but engaged with the panel in his personal capacity as a consumer. According to Fourie, South Africa’s health system does not perform optimally despite the relatively high expenditure spent on health care in part due to the country’s two-tiered system of private and public healthcare.

Considering the timeframes envisaged for the roll out of the National Health Insurance (NHI), Fourie argued that the industry required an interim process.

He criticised proposals promoting alternative reimbursement models saying that in the current private healthcare dispensation, alternatives would entrench past inefficiencies and benefit private hospitals. He added that although mandatory membership seemed like an obvious approach for schemes it would be unaffordable and that alternative funding mechanisms are needed for those who are employed but uninsured.

Fourie stated South Africa needs a radical reduction in private healthcare prices to bolster access to healthcare. Using India as an example, he said it was possible to provide healthcare at reduced prices while taking advantage of new technologies.

He then briefly addressed the shortcomings in the regulatory framework referencing the much talked about Prescribed Minimum Benefits (PMBs). According to Fourie, PMBs need to be reviewed.

Finally, Fourie echoed the dissatisfaction of various hospital groups regarding the licensing of private hospitals agreeing that the response to applications is haphazard. He repeatedly said that specialists hold a lot of power as they are the providers who generate money. Even though users make geographical considerations to determine their choice of a health service provider, patients choose a particular doctor rather than the hospital at which the specialist practices, he said.

‘The best of a bad lot’

Media relations and public affairs advisor Stephen Laufer also presented in his personal capacity and as a member of Discovery Medical Scheme. At the outset, Laufer acknowledged his submission was based solely on his experiences with his medical scheme. He also conceded that he had not conducted extensive research into alternative schemes.

[quote float= right]”People don’t necessarily know what they are buying. We purchase based on the appearance of good service but the actual delivery falls short”

In his oral submission, Laufer alleged that Discovery Medical Scheme administrator, Discovery Holdings, was more interested in making life easier for the scheme rather than its members. He cited an instance in which he had developed a relationship with his local pharmacy to obtain chronic medication because Discovery had made it difficult for him to secure his medication ahead of his international trips.

He noted that the proportion of treatment plans and medication denied by the scheme had increased significantly in the last three years.

Inquiry chairman former Chief Justice Ngcobo asked Laufer why he had remained with the scheme despite the purported ill-treatment. Laufer responded that his error had been in joining the scheme 15 years ago.

In Laufer’s view, if he had set aside the premiums he had made to Discovery over the years, he would have been able to afford to pay for any medical emergency that he might encounter then and only join now that he is much older. He suggested that he could have made a better return on his money had he invested his premiums in the market. However, as he had not done so, he was now a prisoner to Discovery and could not afford to leave the scheme because he is older. In other words, Laufer said that at 62 years old, he found it difficult to walk away from what he viewed as an investment against any potential medical issues he may encounter.

Laufer described Discovery as being “the best of a bad lot” in relation to other schemes.

Both Ngcobo and fellow panelist Professor Sharon Fonn noted medical scheme users did not generally seem to interrogate their scheme sufficiently before joining, a point with which Laufer agreed.

“People don’t necessarily know what they are buying,” he said. “We purchase based on the appearance of good service but the actual delivery falls short.”

Ngcobo also observed that many users considered medical cover to be a necessity rather than a luxury, and thus were forced to remain with schemes with which they were not satisfied.

Claiming rights does not come easy

Professor Andrew Sarkin is a cardiologist and head of the department of cardiology at Pretoria’s Steve Biko Academic Hospital. He spoke from extensive personal and professional experience and the panel, clearly benefitting from his broad knowledge, questioned him quite extensively.

Sarkin spoke broadly about the challenges in the health care system in South Africa and more specifically within the field of cardiology. He emphasised that South Africa needs to move towards a “unified”, “holistic” health system. He repeatedly noted that the examples in cardiology are problems throughout other specialisations in the health care system.

Sarkin explained that although the Constitution dictates that health is a basic constitutional right, there was some “lack of clarity” about what this entitles patients to. Currently, there are issues of access to healthcare services, including emergency medical services which compromise patients’ rights and this according to Professor Sarkin is the result of a failure of planning and systems.

Echoing comments made throughout the health inquiry thus far, Sarkin also noted that patients don’t know their rights.

“You have to be very strong-willed as a patient” to claim your rights, he said.

A split, inequitable system

Decrying the inequality between the private and public healthcare systems, Sarkin noted that currently the “provision of health is completely related to a patient’s income” instead of what is best for the patient, the country and the citizens of the country. Later, Sarkin gave the example that a patient entering a private hospital, even while she or he is in the process of having a heart attack, will sometimes not be treated if they are not covered by a medial aid or carrying a large amount of cash with them.

[quote float= right]Of the 175 active registered cardiologists in South Africa, only 35 operate in public sector which services the vast majority of patients”

Sarkin noted that of the 175 active registered cardiologists in South Africa, only 35 operate in public sector which services the vast majority of patients. The private sector, which serves less than 20 percent of the population,  has 145 active registered cardiologists. This amounts to one cardiologist for every one million patients in the public sector, while there is one cardiologist for every 50,000 in the private sector. He indicated that this is well below the ratio in European countries, which is on average 35 cardiologists per one million patients.

This situation is of particular concern because the costs of private healthcare are “absolutely exorbitant” and “enormous,” according to Sarkin.

He gave an example of a mother who recently called into a radio station complaining that her child needed a heart transplant. The transplant device costs R1.8 million and the operation would cost a further R1 million. Although this is supposed to be covered by the child’s medical aid as a PMB, the medical aid in question indicated that it could not afford to cover the costs of the device and procedure and as a result the parents are trying to bring the issue to the attention of the media and the Minister of Health.

Panel members asked what the cause of the high price in the private sector might be. His response was that it appeared that there were many different causes and that it is because increasingly “private health care is being seen as good business”.

“I don’t believe that health should be driven by free market factors”, he concluded. He noted that this also results in “over-servicing”, an issue raised previously in the public hearings.

Sarkin also emphasised the need for a further form of “per specialisation” community service to stop specialists such as cardiologists from just going straight into the private sector after graduating. He described it is “unacceptable” that private practitioners do not do enough public sector work.

We can do better

According to Sarkin, the amount of money spent on private health care in South Africa does not translate even translate into good quality outcomes for private sector patients. He noted that three medical schemes have recently approached the Steve Biko Academic Hospital’s cardiology department for assistance with patients although the department’s lack of resources makes Sarkin reluctant to accept private patients. These schemes offered to pay for these services although this is not always the practice of all medical schemes in these situations.

“I have no doubt we could do better,” concluded Sarkin.  “All of the organisations in our field have not done enough”.

When pushed by the Panel on whether further regulation of practitioners would help he accepted that there is insufficient regulation “across the board” for practitioners.

This edited summary of inquiry proceedings was provided by public interest law organisation Section27. For more summaries of the proceedings, visit the Section27 website