Wednesday 22 May

The Health Market Inquiry resumed public hearings in Pretoria today, 3 May 2016. Following a cogent first set, the Panel has extended the general rounds to include relevant stakeholders that had not participated in the previous sittings. The South African Nurses 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 course of the next three weeks. Urologist and health economist, Dr Izak Fourie kicked off the presentations, followed by Stephen Laufer and Professor Andrew Sarkin.

Dr Fourie declared that he holds an indirect minority share in Insight Actuaries Consultant and Nurture health, but engaged with the Panel in his personal capacity as a consumer. According to Dr Fourie the health system in South Africa does not perform optimally despite the comparably high spend on health care. The challenges he said result from having a two tier system which necessitates a structural change. Considering the timeframes envisaged for the roll out of the National Health Insurance (NHI), Dr Fourie argued that the industry required an interim process.

He criticised the proposals promoting alternative reimbursement models saying that in the current private healthcare dispensation these alternatives would further entrench the inefficiencies of the past and only financially benefit private hospitals. He argued that the protection of data not only confuses patients but also dissuades the publishing of health outcomes. Dr Fourie’s stated that South Africa needs a radical reduction in prices in the private health sector 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.

Dr Fourie briefly addressed the shortcomings in the regulatory framework referencing the much talked about Prescribed Minimum Benefits (PMBs); he reiterated that PMBs needed to be reviewed. 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.

Dr Fourie commented on various challenges in the private health sector and was carefully questioned by the Panel regarding his views and former occupations.  He spoke at length about lessons which he considered useful and could be gained from the hospitals set up for miners by the mining industry. Dr Fourie also echoed the dissatisfaction of various hospital groups regarding the licensing of private hospitals agreeing that the response to applications is haphazard. Dr Fourie 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. In response to Professor Fonn, he told the Panel that hospitals compete for specialists using facilities and expensive equipment.

A transparent and more equitable system

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

In his oral submission, Mr Laufer said he had concluded that Discovery Holdings (the administrator of Discovery Medical Scheme) 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.

When asked by Chief Justice Ngcobo why he had remained with the scheme despite the purported ill-treatment, Mr Laufer said that his error has been in joining the scheme 15 years ago. In his 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 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, Mr 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.

Panelist Dr Bhengu asked what advice Mr Laufer would give to someone who was considering joining Discovery Medical Scheme to which Mr Laufer said that based on conversations with his broker and other users of medical schemes; “Discovery was the best of a bad lot.”

Mr Laufer said that he had made an effort to assist Discovery to simplify the system, particularly in relation to the issue of obtaining long-term medication, but had been frustrated by the lack of consistency in his dealings with Discovery. He said he had dealt with various people within the organisation but had found little recourse.

Both Chief Justice Ngcobo and Professor Fonn noted that medical scheme users did not generally seem to interrogate their scheme sufficiently before joining, a point with which Mr Laufer agreed.  He also said that medical aid schemes used their branding and marketing materials to entice users but that often the brand promise did not match the experience.

“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.”

Pressing the point that Mr Laufer was free to seek other alternatives, Chief Justice Ngcobo 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.

Mr Laufer said his motive for testifying at the hearing was to contribute to a generally more equitable health system and he hoped the health market inquiry would result in greater transparency in the way that medical schemes conducted their business.

The need for a unified system to protect patients’ constitutional right to health

Professor Andrew Sarkin is a cardiologist. He is also the Head of the Department of Cardiology at the Steve Biko Academic Hospital, in Pretoria. He spoke from extensive personal and professional experience and the panel, clearly benefitting from his broad knowledge, questioned him quite extensively.

Professor Sarkin spoke broadly about the challenges in the health care system in South Africa and more specifically about cardiology. He began by emphasising 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. Professor 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, Professor Sarkin also noted that patients don’t know their rights. Even if they do know their right he indicated that presently “you have to be very strong-willed as a patient” to claim your rights.

A split and inequitable system

Decrying the inequality between the private and public healthcare systems, Professor 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 on Professor 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.

Professor Sarkin noted that of the 173 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% of the population, on the other hand has 145 active registered cardiologists. This amounts to 1 cardiologist for every 1 million patients in the public sector, while there is 1 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 1 million patients and the United States of America.

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

Professor 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.

Quality of outcomes

In some instances, the amount of money spent on private health care in South Africa “does not translate” into “good quality outcomes” for patients in the private sector. Similarly, though there is a perception that the public healthcare sector is in disarray. Professor Sarkin noted that there are significant pockets of excellence including academic hospitals in the public healthcare sector. In response to a question he noted that there are three medical schemes that have recently approached the Department of Cardiology at the Steve Biko Academic Hospital to take their patients, although a lack of resources makes him “reluctant” to accept them. These schemes offered to pay for these services although this is not always the practice of all medical schemes in these situations.

We can do better

“I have no doubt we could do better” Professor Sarkin told the Panel, in response to further questions. “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.

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