Medical Aid Schemes revolt against kick-backs
Hospital groups and private hospitals are putting a stranglehold on medical care and profiting from inflated invoices to patients and kick backs from medical suppliers, bringing the industry to its knees. It has been revealed at a recent conference of the Board of Healthcare Funders, that private hospitals will overcharge medical aid schemes and their members by at least R2 - billion this year.
"Roughly, members' contributions will conservatively be reduced by 10% and more if all these practices can be removed", says Carel Stadler, TeleMed CEO, one of a growing number of medical aid schemes fighting what they consider to be ruthless pricing by hospital groups.
He goes even further: "It is also common knowledge that doctors have shares in some hospitals and are sensitised to ensure that the occupancies are increased by keeping members in hospital longer. Even where they do not have shares there are profit shares for increased occupancies and referrals going to doctors working at hospitals."
Doctors on the other hand feel frustrated with the limited range of materials available to them. In a recent case a patient needed a new shoulder joint, but was not allowed to use the one recommended by his doctor, one of much higher quality than the one supplied by the hospital. The hospital refused to make it available to him as it was not stocked by their usual supplier. Patients are presented with exorbitant fees for ward stays and materials. Says the patient: "You pay for a box of the most expensive plasters on the market and what you really get is one cheap plaster."
With the introduction of the medicine pricing regulations in May 2004, manufacturers have to set a single price for a medication and may not give discounts or rebates. Hospitals are now accused of inflating their ward prices in order to cover the lost profits from medication, but Stadler also points to the government as an aggravator of the situation, "In a market with more competition, hospitals would not be able to just inflate prices when profits in some areas have been reduced. According to Gauteng's health spokesperson Jack Bloom, 50 applications for private hospitals during the last 6 years, have been made, but only 22 approved. This leaves private health care firmly in the hands of the three biggest hospital groups, Netcare, LifeCare and Medi Clinic who can determine prices as they wish."
In a recent statement to the Mail and Guardian newspaper, Netcare agrees that it does negotiate for and receive discounts from suppliers but states: "They are not illegal or unethical. Suppliers set the prices for devices and materials, which form the list prices charged by Netcare to medical schemes."
