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Medical aids ‘dictate treatment’ to doctors

Katharine Child

In submissions to a Competition Commission inquiry into the cost of private healthcare, doctors said they were furious that medical aid scheme administrators were setting the prices doctors could charge, and by restricting the medicines they could prescribe were interfering in the treatment of patients.

In its submission to the inquiry, the SA Medical Association, representing more than 7000 doctors, slammed the three biggest hospital groups, Mediclinic, Life and Netcare, and medical aid administrator Discovery Health. The association claimed that they colluded in deciding which treatments would be available in hospitals.

“Private hospitals enforce the use of [only] these [selected] products and medical practitioners are obliged to use such products, irrespective of what is in the patient’s best interests.

“These [collusive] negotiations have a direct impact on the quality received by patients and are [against] best clinical practice,” the association said.

It said the influence of medical aid administrators on the availability to medical aid members of drugs and surgical supplies was “an abuse of market dominance held by the hospital groups and medical scheme administrators …”

Discovery Health CEO Jonathan Broomberg said his group did not stipulate which medicines could be used by hospitals but “negotiated various alternative payment arrangements with hospital groups, leaving it to hospitals to make decisions on medicines and products used”.

“Healthcare systems around the world are trying to contain costs by ensuring that only the most cost-effective medicines and supplies are used. This is not unique to South Africa,” Broomberg said.

Mediclinic executive Roly Buys denied the Medical Association claims and said doctors chose the medicines that patients needed and when medical aids did not cover their cost patients were told that they would have to pay for the medicines themselves.

He said the law required that every patient be offered the generic version of a drug.

It was all about balancing the books, Buys said. He said medical aids paid for all emergencies but some drugs were extremely expensive and their cost could not always be met by the medical aid.

He said Mediclinic had extensive lists of the medicines that required authorisation by medical aids before doctors could prescribe them.

Netcare declined to comment.

Life Healthcare said it was studying the submissions.

Though Discovery Health was singled out by the doctors’ group, other associations, representing radiologists, physiotherapists, anaesthetists, private nurses and orthopaedic surgeons, have criticised medical aids as being the “dominant players” in price negotiations.

The submissions suggest strained relations between medics and medical aid administrators.

The associations representing healthcare workers claimed they were on the back foot during price negotiations because they lacked the millions of medical records that medical aid administrators had at their disposal.

The Radiologist Society of SA said the fact that nearly every radiologist charges at the rate set by the medical schemes, which is lower than would otherwise be charged, was proof that “medical aids exercise monopoly power”.

But Liberty Medical Scheme principal officer Andrew Edwards said service providers were free to set their own prices.

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