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Are the doctors to blame, or should we be looking at the medical schemes?

As someone who belongs to a medical scheme – and who is privy to a ‘behind the scenes’ look at what they don’t pay – I must admit the question keeps popping up.

The sad reality is that our national health system is in a shambles. If you want anything resembling reasonable medical care, then you need private care.

So it’s heart-breaking to receive comments on this blog from pensioners not being unable to afford medical aid – Not only heart-breaking, but scary as well. One day each of us will find ourselves in a similar position.

So who is to blame?

Like you, I don’t have a clue because both sides blame the other.

The medical schemes blame the medical profession and the medical profession blames the medical schemes. I’ve spoken to both sides so let’s listen to what they say.

Let’s hear it then for the medical schemes

Earlier this year, the Genesis Medical Scheme attempted to have regulation 8 of the Medical Schemes Act struck down.

Apparently this provision can be used to force a medical scheme to pay any amount claimed by doctors for the treatment of prescribed minimum benefits. Genesis Medical Scheme was arguing that this fee cannot be without limit.

Why did Genesis Medical Scheme go to all this effort?

In 2015 a Genesis member has their appendix removed. This wasn’t an emergency operation and the surgeon who removed the appendix charged R3, 800 or the procedure. Fair enough, right?

The problem came in when the anaesthetist claimed R16, 200 for the procedure. Genesis paid R8, 927 which was the limit as set out in their rules for this procedure.

Now remember how a medical scheme operates…
All medical schemes sit with a pot of money made up of the contributions of all their members – let’s say it’s a R1, 000 for argument’s sake.
They then take this R1, 000 and allocate it amongst 101, 000 different procedures. And we can safely assume that the more common procedures get the lion’s share of the R1, 000.

Back to our anaesthetist
He or she lodged a complaint with the Registrar of Medical Schemes who ruled in his or her favour.

Genesis then lodged a complaint with the Health Professions Council of South Africa (HPCSA) who dismissed the complaint. Their argument was that the patient had consented to the charges and that the anaesthetist could charge whatever they wanted.

I don’t know about you, but when it comes to medical care, the last thing which is discussed is cost – “Ag, don’t worry, your medical aid will take care of it,” comes closest. I often ask my dentist for a quote and am met with a raised eyebrow.

On a side note…I was present for the birth of my son when they did the cesarean section. I can vaguely remember the anaesthetist standing in shorts, and slops with a moon bag hanging around his waist while the gynaecologist and theatre sisters were in the midst of all the blood, sweat, and tears (My tears, of course!).

But does Genesis Medical Scheme have a point?

  • I don’t have a clue as to how long such an operation will take. What do you think – maybe two hours at the maximum, maybe less?
  • I don’t know what costs are involved for the anaesthetist. Gas, syringes, time? There can’t be a great need for staff and consulting rooms can there? And surely the rental of the operating theatre and hospital staff is paid for by the medical scheme?

One operation a week at R16, 200 multiplied by 4 weeks means an income of R64, 800 a month. Granted, not the best income for a specialist, but one operation five days a week means an income of R324, 000 a month – nothing to frown at.

But it gets even worse according to the Genesis Medical Scheme…
How much could it cost to have your eyebrow stitched back together? Genesis Medical Scheme received a bill which would make anyone choke on their biscuit.

The procedure in question took all of 23 minutes to perform and the invoice came in at over R23, 000 – more than R1, 000 a minute – or if we translate that into hourly rates – R60, 000 an hour!

Closing arguments for the medical schemes

So does Genesis refuse to pay, and face another complaint, or do they capitulate? At the end of the day, it’s you and I, the members who are being held at gunpoint. And if there’s not enough money in the kitty, then next year it’s simply a matter of raising your medical scheme contribution.

Think for a moment about how odd the set-up is.

  • The specialist tells you that you need X, Y, and Z done.
  • You agree with them because, after all, they’re the expert
  • But no-one consults with the guys who have to pay. Basically, your medical scheme is signing a blank cheque when it comes to prescribed minimum benefits.
  • But at the end of the day, someone has to pay, and in this case, as always, it’s us the members.

The good news if you belong to Genesis Medical Scheme, is that the announced the lowest increases of all medical schemes for 2018 – only 5.8%
So obviously, all their fighting is paying dividends.

Let’s now hear it for the specialists

Right off the bat let me say that these people deserve to earn high incomes. Years of study aside, when you’re sick, the one person you most want to see is your doctor.

But I’m afraid to say, that the system doesn’t place as high a value on them as it should.

I got to spend some time with a gynaecologist recently. And yes, I realise I’m male (Let’s not go there). So I started off with some small talk around the subject of why medical costs are so high in South Africa.

He gave me a grim smile and then proceeded to ask me a question: “How much do you think professional indemnity insurance costs me every year?

I glibly replied: “Oh, I suppose somewhere around R30, 000 a year?

To which he replied: “R900, 000 a year! And do you think that the medical aid takes those costs into consideration? And do you realise I have to rent two consulting rooms with all the costs of staff, telephones, electricity, and water?

Little did I know that he was just starting to build up a head of steam…
Do you know that I have 30 years’ worth of experience, and in that time I’ve never had one claim for medical malpractice? But in this country I am forced to pay a million Rand a year for insurance which I never use. I am forced to pay because of the mistakes of others, and because lawyers have found a new way to make money.  Just to cover the cost of the insurance, I have to perform X amount (I can’t remember the exact figure) of deliveries every month. So you know what I did?

Nervously I replied: “No.”

To which he responded, “I closed down my Obstetrics practice. Now I only handle specialised gynaecological procedures. I earn less but I have less headaches. Do you know that in South Africa, a patient can claim any amount they wish for medical malpractice? In other countries it doesn’t work like this; they have a cap.

By now, to be honest with you, I was too petrified to ask any further questions. But I was left wondering what has become of modern society where all we do is chase highly skilled professionals away?

Think about it, if we succeed in chasing every surgeon out of the country; who will we turn to in our time of need?


So who is right? It seems both parties have valid points.

When it comes to medical specialists, I guess it’s the age old issue of supply and demand. If you want to reduce the cost, then there needs to be a concerted effort in getting more people trained up. Nothing drops prices better than an oversupply of skills, right? I don’t know if we still do, but why are we having to import doctors from Cuba? Those deserving of bursaries, train them up. Those with the money to pay for studies, train them up. The more the better – why do we still have quotas?

When it comes to medical scheme, there’s also the profit principle involved. Why bother going to all the hassle of starting a medical scheme if there’s no money to be made in it? Yes, they’re officially non-profit organisations (which means there aren’t any shareholders taking profits), but at the end of the day there still needs to be some reward. And before we shoot the schemes down, bear in mind that there are more of them shutting their doors than opening their doors. We don’t want to be in a position where there is only one scheme left.

When it comes to government they must start playing their part in raising the bar at our public health institutions. Far fewer would need private medical care if this was indeed the case especially when it relates to the elderly among us

Of course there’s also the issue of the drug manufacturers and the cost of medicines, but will we ever get to the bottom of that one? South Africa is small fry to them, so take it or leave it!

Until next time.

The InsuranceFundi team