Private Hospitals and Health Care Professionals

South Africa’s medical schemes spent R124.6 billion from their “Risk Pools” on hospital and related professional fees during the last financial year. Read on further for more on private hospitals and healthcare professionals.

This reflected an 8.57% increase in Risk Pool payments compared with the previous financial year.

Of the total benefits received by the medical industry. A whopping R14 billion was paid out from members’ medical scheme savings accounts.

Risk Pool Payouts

Risk Pool expenditure was as follows:

  • Hospitals were the most costly item, absorbing 41.1%
  • Medicines cost 13.8%
  • Specialist fees amounted to 6.7%
  • General Practitioners cost 5.2%

 

Payments from members’ savings accounts

  • Medicines – 36.1%
  • Health care professionals – 16.8%
  • GPs – 15.1%
  • Dentists – 8.6%
  • Pathology – 6.5%
  • Medical specialists – 6%

 

Major beneficiaries

Private HospitalsPrivate hospitals and medical specialists continue to absorb the bulk of medical scheme funding.

Private hospitals cost the medical scheme industry R51.1 billion, an increase of 4.55% compared with the previous financial year.

The sustained increase in private hospital expenditure has seen it rising from R28.6 billion in 2005 to R51.1 billion over the last 12 months.

Specialists cost the industry R32.5 billion, an increase of 6.03% compared with the previous financial year.

Prescribed Minimum Benefits and Private Hospitals

Expenditure on Prescribed Minimum Benefits (PMBs) amounted to 51% of the Risk Pool’s benefits payments – R124.7 billion.

So the Council for Medical Schemes has expressed concern that medical schemes may not be complying with PMB regulations regarding improper payments or reporting on the level of PMB payments allocated.

The CMS says 75% of the country’s open medical schemes spend less on PMBs than estimated annual costs.

It would keep a close watch on this aspect.

Escalating costs

The CMS also says an unfavourable change in beneficiary profiles has been a major contributing factor in the escalation of PMB expenditure.

Expenditure on PMBs generally increases with age, especially for medical aid members over the age of 45 years.

So medical schemes should concentrate their efforts on a growth rate of membership of people under the age of 45 years if PMB costs were to be kept under control.

In the past year, the opposite has proven true.

There was a decrease of 45 000 members under the age of 45 years, while beneficiaries below one year of age and above 45 years grew by 39 000.

Conclusion

The CMS together with medical scheme industry role players and the Government are in constant consultation to find a solution to South Africa’s growing health care provision problems.

Also, the fact that private health care professionals are not obliged to work for the recommended tariffs stipulated by medical schemes. Is adding to the problem of uncontrolled escalating costs.

Add to this the hefty fees charged for procedures in private hospitals and the health care scenario becomes even more clouded.

 

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