Dr Ayanda Mbuli, General Manager: Health Policy and Clinical Advisory at the AfroCentric Group explains how healthcare cost increases are unavoidable but can be managed
The multiplier effect of the global poly crisis has had many consumers, governments and organisations alike having to relook their budgets. Tsh Oxenreider author and podcaster says “The simplest definition of a budget is "telling your money where to go”. That is easier said than done for most and the medical sector has been no exception. Global inflation has increased the cost of everything, a reality most are battling to grapple with. In the health sector, increased healthcare costs are nothing new and happen every year, however consumers still find it difficult to understand why these costs always rise above standard inflation rates.
While some healthcare providers and payers have sought to delay the inevitable, price increases in the second quarter of the year will take effect. Healthcare cost increases have always been around 5% above inflation every year and it is for very considered reasons. It may seem the private healthcare sector, which caters to a much smaller portion of the population (around 9 million) has unlimited access to funding that doesn’t justify increases. However, there has been no increase in this number for more than 10 years which speaks to the fact that outside of the contribution increases there has been no increase in this pool of funds which needs to cater to the cost increases. It’s important to note that healthcare costs are largely out of the medical schemes control though schemes continue to negotiate affordable rates to keep the schemes sustainable. The health skills shortage in the country, high costs of treatment particularly new and innovative treatments, quality healthcare supplies, fraud, waste and abuse to name a few are just some of the considerations.
Skills shortage is one factor threatening to cripple any sector of the economy and with healthcare being one of the most affected sectors, the bearing becomes even more challenging for consumers as the law of demand and supply applies ever so noticeably in this instance.
Furthermore, all medical schemes must provide their members with prescribed minimum benefits (PMBs) which cover 270 conditions and 25 chronic diseases. PMBs are funded for irrespective of the members medical plan, a mandate required by the Council for Medical Schemes which is a reasonable means to ensure fairness and competition across the sector. However, the adverse effect is that this approach effectively creates some controversies between payers and healthcare practitioners with regards to the pricing for PMB management. This consequently impacts members because the pricing and reimbursement thereof is from the shared pool of funds.
There are numerous ways one can rearrange their medical cover to lower their contribution and therefore household healthcare costs. Medical aids are obligated to allow members to change their chosen medical plan at least once a year. Members can take stock of how they are using their medical aid and understand their healthcare requirements as well as those of their dependents additionally to choose a plan that meets their needs. Many schemes have myriad options with varying benefit packages.
Certain plan types on some medical schemes have an ‘above threshold benefit which acts as a buffer for when members medical savings accounts are depleted and they have closed the self-payment gap – this often happens towards the end of a year and allows members and their beneficiaries access to defined scheme benefits and no extra healthcare costs for rest of that benefit year.
The price of healthcare will inevitably rise again next year. While medical schemes, healthcare providers and hospitals will do what they can to curb the price increases, the one solution for members is to better understand their healthcare needs and apply the right complement of products. The power in managing your healthcare cost lies in understanding this while the peril equally lies in misunderstanding of your benefits. It would bode well for members to remember this.