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Health Care in South Africa 2009

03 March 2009 Gareth Stokes

Have you ever wondered what makes South Africa’s healthcare industry tick? In today’s newsletter we’ll share details of the most comprehensive healthcare digest available to local stakeholders. The book is titled Health Care in South Africa 2009, compiled and updated annually by Liz Still and published by Profile Media.

Health Care in South Africa 2009 begins with comment on healthcare systems in the developed and developing world, comparing medical expenditure as a percentage of GDP in countries around the world. It describes the healthcare models deployed in the US, UK and France before raising awareness of a number of global industry concerns. Shortages of medical staff, increases in diabetes, concerns over water and sanitation, and extreme age are familiar problems in South Africa too. But the real challenge to South African healthcare stakeholders is the provision of basic benefits to all. The rest of Still’s book tackles various issues that stem from this objective.

Masses of regulation keep industry players on their toes

Chapters two through 10 cover every aspect of the local healthcare environment. Still provides a detailed assessment of the funding mechanisms in the South African healthcare industry, including National Treasury, the Road Accident Fund, Medical Schemes, Employer Funded Schemes, short-term insurance products and out-of-pocket expense. After a close look at the interplay between the private and public healthcare sectors (Chapter 4) the book references all of the legislation at play in the broader healthcare industry. A general overview of healthcare legislation in Chapter 5 is followed by The National Health Act and proposed Amendments (Chapter 6), The Medical Schemes Act and proposed Amendments (Chapter 8), Medicines and Related Substances Control Amendment Bill (Chapter 9) and the Insurance Laws Amendment Act (Chapter 10). You won’t find another publication that better encapsulates the shifting legal environment in which medical professionals (and financial advisers in the healthcare space) operate.

Doctors and specialists, hospitals, pharmaceuticals and emergency rescue services are discussed in chapters 19 to 22. We love topics like “the doctor’s dilemma – dwindling income versus managed care” which puts the plight of doctors under new healthcare regulation in the spotlight. There’s reason for concern as (according to the South African Medical Association) some 12 000 of the 44 000 registered South African doctors have already emigrated. Private hospitals have also come under fire recently as the perceived cost driver in the local healthcare environment. Shareholders in listed private hospital groups Netcare and Medi-Clinic have watched in horror as the value of their investments dwindle. And the pharmaceutical industry is under the cosh too, though proposed challenges to the Department of Health’s single exit pricing strategies were put on hold earlier this year. Health Care in South Africa 2009 unpacks these sectors and adds value with insightful interviews with leading industry players.

Hero or villain – the future role for Medical Schemes in South Africa

Most South Africans are familiar with the basic workings of their Medical Schemes. But not too many of us know how Medical Schemes operate, or how they meet various regulatory and governance challenges. Health Care in South Africa 2009 takes an in-depth look at South African schemes. In Chapter 11, Still discusses Medical Schemes issues, including membership trends and challenges facing schemes. Private membership has been stagnant in recent years and schemes remain under pressure to keep fees down while providing a wider range of Prescribed Minimum Benefits (PMBs). The book contains interviews with principal officers of some of South Africa’s most popular Medical Schemes.

Of particular interest in this context is the detailed discussion of PMBs contained in Chapter 25 and Chapter 26 on “How Medical Schemes Remain Solvent.” At present there are three sets of PMBs including a list of 271 emergency conditions, a chronic disease list, and other emergency treatments. Still says that the area is ... “fraught with complexity,” particularly “as schemes, providers and members become more familiar with the mandatory provision of PMBs.”

Still also notes that “Medical schemes trustees have the apparently irreconcilable task of broadening access to healthcare to more South Africans of all ages and levels of health, while remaining solvent.” The book deals with the concept of late joiner fees and penalties levied by schemes in this regard. You might remember the wrangle between the Council for Medical Schemes (CMS) and Discovery Health over the latter’s failure to reach the required 25% solvency level. Incidentally, Discovery Health reached the statutory solvency reserve at December 2008 and boast more than R5bn in its reserve account!

Medical schemes brokers will have to diversify

Financial intermediaries will find a number of chapters in Health Care in South Africa 2009 of particular relevance. We’ll look at some of these in more detail. The first is the chapter on Gap Insurance (Chapter 16). After a demarcation battle between short-term insurers and the CMS the industry must decide on regulations to govern so-called gap cover products. Still provides a useful summary of differences between Medical Schemes and Short-Term Insurance products in this chapter. It’s hoped that the Insurance Laws Amendment Act will define gap cover as a “consumer right” exempt from the Medical Schemes Act. The remainder of this chapter covers the September 2000 demarcation agreement concluded between the CMS and the Life Offices’ Association, as well as insights on the difference between long-term and short-term insurance and the ‘life assurance’ versus ‘life insurance’ concept.

Intermediaries should also pay close attention to Chapter 23 and 24. Irene Zambelis, founder of the Institute for Health Risk managers guides readers through “choosing a medical scheme for your clients” and “how to choose a medical scheme option.” These chapters are “intended for financial advisors, but are also useful to business owners and management of small and medium businesses who are looking at introducing or evaluating the existing health benefits to their staff.”

FAnews Online found Health Care in South Africa an extremely informative read. It leaves no stone unturned in its quest to document every aspect of the South African healthcare environment. It’s a must have for everyone in the financial services industry. We’ve chatted to Liz who kindly made 10 copies of Health Care in South Africa 2009 available to our readers. We’ll give copies to the first 10 customers who respond by email (including their full name and postal address) with the answer to the following question: How many emergency conditions are covered by the current Prescribed Minimum Benefit provisions? (You’ll find the answer in the article) If you are not one of the lucky winners, you can order a book from Profile media. Click here for more detail. 

Comments

Added by Dean, 12 May 2012
I would like to buy your latest PMB book on health care in South Africa Thanks
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Added by Carina Smit, 05 Nov 2009
There are 271 emergency conditions covered by PMBs. Regards Carina Smit 36 Patrys Street Stellenbosch 7600
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Added by Johann Cloete, 10 Mar 2009
There are 271 emergency conditions covered by PMB's. Regards Johann Cloete, PSG Konsult Academy, P.O. Box 1680, Garsfontein-East, Pretoria. 0060
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Added by Heinrich Jemane, 09 Mar 2009
ANSWER: There are 271 energency conditions covered by PMBs. Regards Heinrich Jemane Medi-Clinic P O Box 456 Stellenbosch 7599
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