Have you ever wondered just how some healthcare providers justify their unscrupulously high fees?
Who are all healthcare providers?
A healthcare provider (“provider”) is a person or company that provides a healthcare service to you. Examples include doctors, specialists, dentists, hospitals, psychologists, pathologists, radiologists, physiotherapists, occupational therapists, etc.
Medical schemes are often accused of being a “rip-off”. But the “rip-off” is not with a medical scheme! Medical schemes in South Africa are price takers; not price makers. Unless medical schemes have specific payment arrangements with certain providers, schemes have to pay whatever fees they charge in full under the PMB regime as interpreted by the Registrar of Medical Schemes.
When providers overcharge, all members of that scheme suffer. Providers’ fees are in fact paid by each and every member via the pool of funds that they contribute to.
Your medical scheme is nothing more than a bank
A medical scheme functions in a similar way to a bank. It doesn’t treat members. It only pays claims from its members’ available funds. These funds are made up from members’ monthly contributions and interest earned on their investments. By law, medical schemes must keep a minimum of 25% of its annual contribution income in reserves.
Medical schemes in SA are also not companies. Schemes have shareholders, which are the members of the schemes. All medical schemes therefore belong exclusively to its members, who collectively have to pay all claims from their contributions.
The higher the claims paid out by schemes, the less money there will be in its reserves. Consequently, there will be higher than average contribution increases the following year.
Naturally, the opposite also applies. The lower the claims paid out by schemes, the more money there will be in its reserves. Consequently, there will be lower than average contribution increases the following year.
The sky is the limit for providers’ fees
We have previously shared with our members the story of an anesthetist who attended to the removal of an appendix of one of our members. Whilst Genesis paid the surgeon that removed the appendix in full, we did not pay the anesthetist in full. He charged more than four times the fee of the surgeon, which equated to more than eight times the scheme tariff.
Whilst we thought that the charges of the anesthetist were quite extraordinary, they were paled by what followed by another claim from a surgeon who stitched the eyebrow of one of our members. Back then, in 2017, the surgeon’s charges equated to R1 000 per minute, or R60 000 an hour!! And no, it was not after hours and it was not lifesaving surgery.
Two weeks ago, one of our members required reconstruction of her sinus canals. Both the anesthetist and the ENT charged 200% of the scheme tariff. Their accounts were paid in full. But we were dumbfounded when the plastic surgeon charged 800% of the scheme tariff. Genesis paid his bill up to 200% of the scheme tariff. The member can claim another 300% back from her gap cover policy, but she is personally liable for the remaining 300% of his account. Now THAT hurts!
Why the unscrupulously high fees?
There is no question that private medical care is extremely expensive.
Yes, providers run a business and they are absolutely entitled to show profit. We acknowledge that we need them to save lives and that it is costly to run a practice in line with the laws made by the health department, skilled staff and keeping it medico-legally safe. The the sad fact however remains that some providers charge unscrupulously high fees.
Why?
Because they can. There are no guidelines and no law in South Africa that prescribe or regulate their fees.
Unjust enrichment from medical scheme members
Providers don’t make themselves rich on their patients’ personal accounts. Their fees are mostly paid by the members of medical schemes.
Some providers defend their charges by accusing medical schemes of not keeping up with inflation. But in reality, medical scheme increases are usually almost twice as much as inflation. Every year, members’ contribution increases are much higher than their annual salary increases.
Why?
Well, amongst other factors, it is to provide sufficiently for those providers (surgeon) who charge R60 000 per hour (way back in 2017).
What is a reasonable fee?
Providers are certainly entitled to a reasonable fee, but should this fee be without a reasonable limit?
The Registrar of Medical Schemes takes the view in that providers’ charges that relate to the treatment of a PMB condition, should be paid in full by a medical scheme (in other words, all its members). As medical schemes belong to its members, it means all members must therefore pay whatever amount is demanded by the
provider, even if it is a seemingly outrageous amount.
We all work for a living. And yes, some of us work very hard and are under immense stress. But how many of us could earn R60 000 per hour, which equals R480 000 per day or R2 500 000 per week way back in 2017? Should medical scheme members consider this a reasonable charge that they pay for?
On the basis that the Registrar endorses providers charging whatever they like, it really is good money for the selected few that can get it. But but this comes at the expense of every member who has to fund this through their contributions.
What can you do?
For planned procedures, always speak to your provider before going to hospital. Ask him / her for a quote for your procedure and then discuss it with your medical scheme. If your provider charges more than what your scheme will cover i.t.o. your selected benefit option, then negotiate the fees charged by him / her.
When he / she tells you not to worry and that your scheme will have to pay in full for your PMB procedure, first check with your scheme. Not all procedures are PMBs and PMBs are not always covered in full by your scheme. Medical schemes all have different rules and protocols in place for the full funding of PMBs. Just because your provider tells you your scheme by law has to fund your PMB treatment in full, does not mean that your scheme will in fact fund it in full.
Members have to start pushing back and negotiate reasonable fees with their providers. It is not right that all members are prejudiced by extraordinary high annual contribution increases just to fund the ludicrous high fees charged by some providers.
The Content on this site is not intended to be a substitute for professional medical advice, diagnosis, or treatment. Always seek the advice of your physician or other qualified health provider with any questions you may have regarding a medical condition.
