The day began with two mothers and their children presenting to the Health Inquiry Panel about the challenges that they had in accessing healthcare services for their children. Both Kyle Drescher (19) and Jessica McCarthy (24) gave moving testimony about their personal challenges in accessing medical treatment for conditions that they submitted ought to have been covered by Discovery Health because they fall within the legally mandated list of Prescribed Minimum Benefits (PMBs).

Cheryl Narunsky and Jessica McCarthy

In 2012 Jessica McCarthy was in a car accident and sustained a Traumatic Brain Injury. Describing the severity of her condition after the accident Jessica said “I was the most vulnerable I have ever been… I couldn’t bath myself or walk”. As a result, her mother Ms Narunsky dealt with Discovery Health on her behalf.

Ms Narusky states that she initially had no understanding of what PMBs were. Without excellent support from medical practitioners “I wouldn’t even have known that PMB legislation existed”, she said. Jessica also confirmed that “no one had explained to me that was being denied was a PMB. I didn’t even know what a PMB was. Discovery actually concealed to me that I actually had many more benefits”.

Ms Narunsky told the panel that with Jess at home for 13 days, despite her serious need to be admitted to a “rehabilitation hospital” Discovery “employed various tactics to delay the authorisation” for admission and that it “kept making random excuses”. The rehabilitation Jessica required including professional physiotherapy, occupational therapy and speech therapy. Fed up, Ms Narunsky created a Facebook group titled “How I was messed around by Discovery Health Medical Aid”. The group now has over 1000 members.

In order to have Jessica’s medical expenses paid Ms Narunsky said she had to make constant and repeated email and phone call inquiries to various people at Discovery Health. Ms Narunsky noted that the “medical panel” of Discovery that made the decision to deny Jessica’s claims never met with her or Jessica and “ignored reports from more than 23 medical professionals”. Despite efforts Ms Narunsky says she could not get any more information about who the members of the anonymous medical panel were, and therefore had no way of laying a complaint. Discovery merely said that the information was “confidential”. Ms Narunsky noted this is a common experience of members on the Facebook group she started. A member of the Panel commented that it is “quite unacceptable” that a patient is prevented from laying a complaint against medical panels within schemes.

After a year of trying to appeal Discovery’s decision internally, she gave up and turned to laying a formal complaint with the Council for Medical Schemes (CMS).  After a further 11 months the CMS ruled in Jessica’s favour finding that “the Scheme is not correct in the level of PMB benefits it afforded”. Ms Narunsky decried the fact that Discovery then took a further year to “decide whether or not it would appeal”. She told the Panel she would like to express her “disgust” that during this time Discovery’s legal team even “stalked Jessica’s facebook page” to try and bolster claims that she no longer required treatment.  The Chief Justice asked Ms Narunsky whether the CMS kept her and Jessica informed about the process during lengthy delays, and she responded that it had not done so sufficiently.

Ms Narunsky said that Dr Jonathan Broomberg, the CEO of Discovery Health, later on conceded in personal correspondence that “the matter should not have been set down for appeal in the first place” but that the appeal had been aimed at preventing the bad precedent of the CMS ruling may set for the future and its financial implications for Discovery. She noted, however, that Dr Broomberg’s position appeared to change as time progressed.

Ultimately Ms Narunsky concluded that “It is quite simply not my problem that it is inconvenient for Discovery to pay out PMBs”. She noted that though Discovery has now paid out nearly R90 000 for Jessica’s rehabilitation that despite her “meticulous records” Discovery had “ignored approximately R35000 worth of claims” and that the payments promised themselves “fell short” by R17000. Clearly emotional about her ordeal, she concluded that “I don’t feel like our needs have been addressed yet”. Ms Narunsky commented that she had been pushed so far during the process as to have been forced to sell her house “to continue funding the costs incurred” while awaiting payment from Discovery.

In presenting and answering the questions of the Panel Jessica described how the whole process had felt to her. “I was not in a position to deal with the duckings and divings of Discovery” she said. Repeating comments made by patients and patients group made in Pretoria to the Panel last month she said “I don’t know if I can do justice to how overwhelming it feels… I trusted Discovery with my life” and “it feels like David and Goliath – [Discovery] just don’t care about one small person”. She explained that she would have moved to another Medical Scheme but there is a “12 month waiting period for preexisting conditions” which prevents patients like her from even changing schemes when they are very poorly treated. For her part Ms Narunsky put down Discovery’s conduct to either the “trickery” of a “slick” company or “gross incompetence”.

The Panel also asked both Ms Narunsky and Jessica whether they knew the difference between Discovery Health Administrator and Discovery Health Medical Scheme. Both indicated that for the majority of their interaction with Discovery that they did not. Ms Narunsky replied that Dr Broomberg gave off the impression to her that he represented Discovery as a whole during their interaction. Chief Justice Ngcobo then inquired whether they had ever been contacted by anyone from the medical scheme itself and they responded that they had not.

Kyle Drescher and Angela Drescher

Kyle Drescher’s mother, Angela Drescher made submissions about her son and husband’s treatment by Discovery on the opening day of the public hearings of the Panel in Pretoria last month. Kyle’s submissions were intended to specifically articulate his personal experience. Kyle was diagnosed with a major depression which was so severe that he had to be removed from school and his mother closed down her business to take care of him full time.

Kyle highlighted the inadequacy of the Prescribed Minimum Benefits in the case of mental health conditions. He said that he and his mother were informed that the PMBs only cover comprehensive bipolar depression not major depressions like his, “I was told I only had cover for therapy if I had bipolar.” As a result of this lack of understanding and knowledge, Kyle had to be admitted to a hospital falsely diagnosed by a health professional as having bipolar depression. As South African Depression and Anxiety Group and others noted in their submissions health professionals who are desperate to get patients some treatment that will be covered by medical schemes routinely admit patients to hospitals when it is not the ideal treatment. Kyle repeatedly questioned “why will Discovery pay so much for hospital admission and not therapy for depression outside [of hospitals]?”. He described struggling in the hospital “I felt like a criminal locked up in a facility. It felt like a punishment.”

Having returned home on the advice of a psychiatrist because he could not manage in the hospital environment, Kyle said his mother discovered that Kyle was entitled to 15 sessions with a psychiatrist per year outside of hospital for his depression. Frustrated that Discovery would not pay, Kyle’s mother Ms Angela Drescher, turned to – a consumer complaint website – to complain about Discovery’s treatment of her child. Kyle noted that this website receives thousands of complaints about Discovery and that during the Health Inquiry process Dr Jonathan Broomberg, the CEO of Discovery Health, “messaged my mom on Facebook and told her to stop telling people at at the Health Inquiry to complain on”.  He noted that though Discovery now pays for these sessions after the complaint his mother made on that “15 sessions a year is not enough to deal with depression and anxiety – especially for a teenager.”

Like Jessica, Kyle spoke with feeling and questioned why “neither doctors nor Discovery explained PMBs were entitled to be paid in full by law”.  He said he was confused by the fact that out of the 343 pages of PMBs in the regulations, depression and anxiety are not fully and comprehensively dealt with. He concluded by asking “why did my family, especially my mom, have to go through such trauma to have PMB benefits paid?” He told the Panel that there was “chaos in my home caused by Discovery”.

Allied Health Professions Council of South Africa

The Allied Health Professions Council of South Africa (AHPCSA) is a statutory health body established in terms of the Allied Health Professions Act.  Eleven allied health professions, including Ayurveda, Chinese Medicine and Acupuncture, Chiropractic, Homeopathy, Naturopathy, Osteopathy, Phytotherapy, Therapeutic Aromatherapy, Therapeutic Massage Therapy, Therapeutic Reflexology and Unani-Tibb fall within its ambit.
The AHPCSA noted that “there are over 2600 registered Allied Healthcare practitioners in SA”.

The AHPCSA said that the entire Health Inquiry was a “Disease Inquiry” and was focusing mostly on diseases and the treatment of diseases, whereas one of the major advantages of some of the professions represented on the AHPCSA is that they focus on proactive prevention of ill-health.

The AHPCSA emphasised allied health professionals rights to “freedom of trade, occupation and profession” in terms of section 22 of the Constitution and said that this was regularly disrespected by medical schemes who attempt to decrease costs by not paying out claims stemming from services provided by allied health professionals: “they routinely refuse to pay… either because of a lack of understanding or prejudice”. This is so, in the AHPCSA’s submission, despite the fact that the costs of reimbursing allied health professionals are an extremely small fraction of all claims paid out by medical aids in South Africa. For example, there were “only” R42.5 million in reimbursements for homeopathy from medical aids for 2013/14.

The AHPCSA concluded by submitting that it is difficult to avoid the conclusion that medical aids were discriminating against allied health professionals because of “ignorance”. They emphasised that section 27 of the Constitution entrenches the right to access to healthcare “services” not a single type of “service” alone.

When asked by the Panel what recommendation it should take the AHPCSA said that allied health professionals wanted to be treated equally and have claims relating to their services paid by medical aids.

 National Hospital Network

CEO, Kurt Worrall-Clare led the National Hospital Network (NHN) submission. The NHN, a not-for-profit and voluntary association for independent hospitals, facilitates negotiations between members and funders across the country. Its membership has grown from 70 hospitals in 2010 to 177 to date. Worall-Clare attributed the market viability of stand-alone hospitals to the exemption provided in Section 10 of the Competition Act. Worall-Clare said that the exemption which NHN was granted by the Commission has been able to protect smaller hospitals from acquisitions by the big hospital groups and serves as an important tool to encourage competition.

Licensing of Private Hospitals

NHN argued that provincial licensing of private hospitals creates impediments for entry. Worall-Clare stated that since the decentralisation of licensing from national to provincial competence, some of the provisions which were adopted from the National Health Act of 1977 for provincial use render the process inoperative as they relate to national authorities. NHN noted that some provinces had developed their own regulatory framework such as Regulation R158. However they asserted that their members experienced challenges in the application of R158 such as inconsistent interpretation, no clear criterion on which applications were considered, new criteria continually being introduced without transparency and a lengthy and costly appeals process for rejected applicants. NHN also commented that Regulation R158 is 30 years out of date and does not take into account the different types of private facilities applicants propose to develop. Worall-Clare said NHN would like provincial departments to carve out of the existing framework a provision to cater to the different needs or facilities which applicants requested a license for. The National Health Act also does provide not for different categories of health facilities. NHN recommended a comprehensive unpacking of Regulation R158 and the certificate of need referred to in the National Health Act which considers the distinctions between facilities and how to license establishments accordingly.

Designated Service Providers (DSP) & PMBs

NHN said that DSP arrangements are a significant component of the Medical Schemes Act but argued that they are largely not regulated and that there is no provision which talks to applicable principles, transparency or how DSPs are appointed. This flaw in the process they said is a barrier for independent hospitals in entering the market or becoming DSPs.  NHN advised that some schemes have indicated that the criteria is quality and cost effectiveness however there is no clear and transparent information on the criteria and this excludes small hospitals from becoming DSPs. DSP arrangements prevent NHN members from treating patients whose nearest DSP is very far as schemes refuse to reimburse even when independent hospitals have indicated that they are prepared to meet the terms of DSP for those members who reside near independent hospitals.

NHN recognised that DSP agreements as envisaged in the Medical Schemes Act are a useful mechanism to mitigate against exposure to abuse of Regulation 8 and said that if the provision for DSPs is utilised effectively it can be beneficial to members and schemes. However the lack of criteria or guidance on who can compete to become a DSP needed to be interrogated and the information relating to the arrangements was not easily accessible as the contracts between schemes and hospitals are confidential.

Further, NHN commented that Provisions 6 – 8 of the National Health Act require a service provider to offer a user information relating to their treatment options and related costs. NHN’s position is that an obligation on providers to explain PMBs is onerous and goes beyond what is envisaged in the legislation. NHN admitted that identifying a PMB might be incidental in an explanation relating to cost, but said that asking them to explain how to access the benefit pushes service providers to enter the domain of making representations on behalf of medical schemes and the that function is the primary responsibility of administrators.

Negotiating with Administrators and Schemes

The Panel was interested in the interaction and balance of power between administrators and independent hospitals. NHN indicated that they preferred to negotiate reimbursement models with schemes rather that administrators, especially when the administrator is providing services to various schemes. NHN said that the issue, with what Dr Bhengu termed a ‘multi-scheme’ administrator is that these administrators have a single set of rules which apply to all the schemes they are employed by, with provisions which may not be applicable or practical across the schemes and their associated costs and needs. However NHN said there are some administrators, such as Discovery and MMI which insist on negotiating on behalf of the schemes. NHN said that the practical impact of negotiating reimbursement models with administrators precludes them from designing scheme specific agreements.

Other Issues

NHN agreed with some of the schemes affirming that the reserve rates required for solvency is too high in comparison to the international market. Worall-Clare said that money is just sitting in reserve banks which can be freed up for member benefits and encouraged radical decrease on money kept for reserves to ensure solvency requirements are met.

On the issue of hospitals employing health professionals for cost effectiveness, NHN considers the initiative more complicated then schemes anticipate and said that schemes need to take into account the dynamics of our current market. NHN said that the consequence might be that big hospital groups which can meet large employment packages would be advantaged over independent hospitals which could not meet the same demands. This they said could lead to diverting skills of specialists from general accessibility and focus it on the entities which employ service providers.

Hearing continue on 10 March 2016 with presentations from Life Healthcare Group, Mediclinic and Netcare.

For more information contact:

Umunyana Rugege at

Tim Fish Hodgson at