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Category:
Insurance
News /
Medical Schemes /
TeleMed
/ September 2007
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."
Author:
Carel Stadler, CEO - TeleMed
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