‘Doctors more to blame for health care costs than medical aids’

If you have newly joined a medical aid, if you live in an urban area near a private hospital and if you are pregnant and about to give birth you stand a much higher chance of being admitted to hospital than a rural person reliant on public health care.

This is the distorted picture of top-level health care in South African that emerged this week when the Competition Commission released its report - the Healthcare Market Inquiry - on a four-year investigation into what is driving up the costs of private health care in South Africa.

And while the costs of medical aid membership are extremely high and consumers are not given a way of comparing options fairly due to the complex nature and bundling of the memberships on offer, it seems that doctors who are ordering too many tests and procedures and hastily admitting patients to hospital - or even to ICU when a general ward would suffice - who are the most to blame for driving up the costs.

Doctors recommending more care than necessary and ordering unnecessary tests have created a phenomenon labelled “supply-induced demand” - creating unnecessary expenditure on health care and causing an increase in medical aid contribution costs over the long term, explained inquiry chairman former chief justice Sandile Ngcobo at the release of the report.

Justice Ngcobo said this was particularly the case when it came to Caesarean deliveries in the private health sector, with South Africa rating far higher than all other eight countries used for comparison during the Competition Commission’s investigations.

The report set out to examine the factors driving the excessive costs of private health care, and to look at whether or not the big players in the industry - medical aids, medical aid administrators, medical practitioners, hospitals and other service providers - were competitive in their offerings and giving consumers fair value for money.

The inquiry found that new interventions in private health care were needed because the system was not competitive, medical aids offered confusing product bundles that are expensive and impossible to compare and consumers were left “disempowered and uninformed”.

The system was found to be working in favour of profits rather than good care and value for money and there were “failures of accountability at many levels”.

The inquiry found there were 2.12 medical practitioners per 1000 people in the private sector and (0.92 GPs per 1000 in the public sector) and 0.83 specialists per 1000 in the private sector (compared to 0.3 medical practitioners per 1000 population in the public sector). This, in the final analysis, meant that there was no under-supply of specialists but rather that the use of their time was inefficient.

The inquiry said Discovery Health had consistently earned profits well above its main competitors, with no sign of challenge. While this could be attributed to high levels of competency within the organisation, it did not fully explain the massive profitability gap as Discovery sourced services from the same industry stakeholders as its competitors.

“We see Discovery Health growing and becoming more successful over time. This is an indication of market failure and there are no signals that the market will self-correct,” the inquiry found.

Stakeholders have been given two months to comment or propose recommendations on the report before the final version is released in November. - Health-e News