Comments by the South African Medical Association (SAMA) that overspending on administration by medical aid schemes is responsible for fuelling medical inflation is not only misleading, but also creates an unnecessary clash between key stakeholders in the
This is according to Graham Anderson, Principal Officer at Profmed, the medical aid scheme for graduate professionals, who says it is correct that administration and non-healthcare costs for medical aid schemes amounts to between 10% and 13% of their total costs, “It should be kept in mind that it costs a lot to run a medical aid scheme, including paying out claims and managing contributions.”
“SAMA says inflation is driven by medical aid schemes, not doctors. However, the most significant portion of a medical scheme’s budget is spent on hospital and pharmaceutical costs, which can run as high as 40% and 25% respectively. These are downstream costs driven by the medical practitioners.
He says managed healthcare programmes can play an important contributing role in reducing costs in the healthcare sector. “There is a common misconception that managed healthcare does not contribute towards reducing costs but the reality is that it is a very important part of managing medical expenditure. We have seen that when managed healthcare programmes are not put in place, costs tend to rise substantially.”
Anderson says it is not helpful to have different segments of the healthcare industry pitted against each other. “The rising cost of healthcare is a very real issue and it is crucial that both healthcare providers and funders start working together to manage costs more effectively. In many instances there are systems in place already, and medical schemes are working with groups of specialists and practitioners to manage their own cost bases.”
“With Government focused on introducing National Health Insurance over the medium term, it is becoming increasingly crucial for key stakeholders to work together, not against each other, to deal with this problem,” concludes Anderson.