Time for managed healthcare

According to recent reports, medical aid scheme members in South Africa pay the highest non-healthcare costs in the world.

Apparently these costs consume up to between 14 and 15 percent of medical aids' R60billion annual expenditure.

But according to Bafana Nkosi, principal executive officer at Bonitas Medical Fund, there is no conclusive evidence or research to attest to these assumptions.

These statements are easily taken as gospel though they are based on mass generalisation across the spectrum of medical aid providers in the country.

"What is usually omitted from panic reports like this is the fact that South Africans spend eight or nine percent of the GDP on healthcare," Nkosi says.

"While this is higher than other developing countries, when compared to the US's between 14 and 15 percent of the GDP spent on healthcare expenses, we're actually doing rather well.

"Countries such as the US have addressed non-healthcare costs with the introduction of managed healthcare interventions. These interventions vary from passive to active involvement and engagement, such as the Health Management Organisations (HMO)."

Health Management Organisations are healthcare organisations that own hospitals and employ doctors to keep control of costs.

In South Africa we are largely on the passive level of managed healthcare. We implement managed healthcare programmes that are largely outsourced to third parties.

We have introduced limited capitation models and have alternative reimbursement models with hospitals and other providers.

Capitation contracts allow patients to select their primary healthcare providers, who monitor the patients' access to medical services, Nkosi says.

These capitated providers are paid a fixed fee per month based on the number of members on their books, irrespective of the number of times they have seen the patient. While this might discourage over-servicing, it might, on the other hand, result in under-servicing and patients ending up in hospital, defeating the objectives of these arrangements.

There are, however, measures that are taken to ensure that doctors do not under-service. There are peer review mechanisms and we would look at other downstream costs like hospitalisation, associated with the doctor.

"The time might be ripe for South Africa to progress in managed healthcare intervention by introducing fully fledged HMOs," Nkosi says. "I see this being started by two or three medical aids joining forces."