- The Covid-19 pandemic is hitting private healthcare, with doctors and other healthcare practitioners losing income.
- But medical schemes have rejected a proposal by private health sector represenatives that would see them tapping into funds to help them stay afloat.
- They say they’re available to lend an ear – but that the funds must stay put.
The Council for
Medical Schemes has declined a proposal by private health sector practitioners
that would see medical aid schemes tap into funds help them stay afloat, as the
economic impact of the Covid-19 outbreak puts the future of medical practices
in jeopardy.
The pandemic has
put many businesses at risk for closure across the country, and private sector
practitioners have not been an exception, with many specialists having shut
their doors since the beginning of the lockdown in March.
Last week, private
practitioners made a plea for assistance to medical aids and banks, through
industry groups and associations including the South African Private
Practitioner’s Forum (SAPPF), the South African Medical and Dental
Practitioners Association, and the South African Medical Association.
Pay in advance,
please
Their proposal
was that medical aids should pay practitioners in advance, so that they can
continue practising without worrying about going out of business, as patients
shun healthcare facilities out of fear of contracting Covid-19 and elective
procedures are postponed.
Dr Chris
Archer, CEO of the SAPPF, said: “The idea is that they [practitioners],
would use the payments made by the medical schemes made in 2019 as the base
year.”
The
individualised payments, based on what money the various doctors made last year,
would be split into a 70% upfront payment and a capitated fee of 30% that would
be paid as a service fee.
He suggested
that medical schemes could tap into the funds that they have accumulated during
the lockdown, to provide the practitioners with the assistance they need, since
those funds have not been paid as fees for services that would normally have
been rendered by the practitioners.
Fee for service agreements mean that
doctors are paid per service they provide but a capitated agreement means that
the doctors are paid a certain fee regardless of whether or not they have
provided a service.
Fee for service agreements have the potential
to lead to over-servicing, an issue a private healthcare sector issue that was
flagged by the Health Market Inquiry while capitated payments could result in
underservicing.
Archer
explained that private practitioners had seen a reduction of 45% to 60% in
their businesses during lockdown, while specialists like ophthalmologists’
business fell by 90%.
Other affected
specialists include Ear, Nose and Throat surgeons, dentists, plastic surgeons
and maxillofacial surgeons, who perform facial surgeries.
“We need
the money now, we need the doctors now because people are literally dying and
we can’t afford to spend time talking and worrying about regulations and what
boards of trustees might and might not think,” said Archer.
He added that
older doctors, especially those with co-morbidities, may be retiring early to
avoid infection, leaving younger doctors to care for patients.
But the younger
doctors are at risk of losing their businesses due to low patient numbers.
However, the
CMS has a different view.
On Tuesday Dr
Sipho Kabane, registrar and CEO of the CMS, said the council had received
proposals from organisations that would require medical schemes to tap into
their reserves to help practices stay afloat.
“We
appreciate that Covid-19 and the associated lockdown has resulted in many
healthcare service providers facing financial distress. Indeed, keeping these
practices alive ensures future access to care for medical scheme members.
“However, what these proposals
have failed to demonstrate, is the societal benefit from a medical scheme
beneficiary perspective,” said Kabane.
The CMS is a statutory body that
provides regulatory supervision of private health financing through medical
schemes.
Medical aids are required by the
Medical Schemes Act to keep their reserves at 25% of annual gross
contributions.
Available to lend an ear
In a letter responding to the proposal
from the practitioners, Kabane said the CMS was available to support the
practitioners in line with regulations and by lending them an ear, but
agreements with schemes need to be in line with regulations.
Damian McHugh, executive head of
marketing and sales at Momentum Health, said the company was looking at the
financial implications for members and the practitioners, but any decision it
makes will have to be in line with regulations.
“It’s a good thing that we review
the payment mechanisms because there are challenges in the current one and the
capitated one. We want to ensure that providers [practitioners] are protected
during this, because they are a critical part of our health eco-system and
we’ve got an under-supply so we need to think about them as well.
“But we also need to think about
the members and the financial implications this has on the members.”
Nedbank said it had been approached by
specialist practitioner groups and associations and is assisting them with
payment holidays, reduced reduced credit
card repayments and waived penalty fees on early investment
withdrawals.
“We also have a unique funding package exclusively
to the Medical Fraternity with relaxed payment terms,” said Alan Shannon,
professional and small business services executive at Nedbank.
Dr Ryan Noach,
CEO of Discovery Health, said the funds that have not been paid out in claims,
since many people are not visiting doctors, are held in reserves meant to
benefit members.
“It is important to note
that neither the administrator nor any other service providers to the medical
schemes have access to these funds. The funds are retained within the scheme
risk pools, to defray the costs of members’ future claims,” he said.
Noach added that Discovery is
in discussions with practitioners and their representative organisations for a
joint approach on a financial relief structure that will have a collective
benefit.
“We remain entirely alive
to the COVID-19 plight doctors are facing, including not only safety risks in
the front line of care, but also economic pressure in the circumstance of this
unexpected global event,” Noach said.
Afrocentric, which runs medical aid
administrator Medscheme, did not respond to requests for comment at the time of
publishing.
FNB, Standard Bank
and Absa also had not responded at the time of publication.
