/ 2 December 2010

Pay-as-you-go healthcare launches in South Africa

Pay-as-you-go healthcare is now available in South Africa but, while this could provide cost savings for the man on the street, some say the quality of private health services may suffer.

In November the Yarona Healthcare Network, a company that provides network management for medical aid schemes, launched Yarona Care, the world’s first prepaid healthcare product.

Bradley Soll, managing director of Yarona Care, said South Africans spend over R37,5-billion on out-of-pocket expenses for healthcare each year. Almost 50% of this is spent at doctors’ private practices.

Soll says Yarona Care has leveraged its experience from working with medical aid schemes to help negotiate a cost-effective package of healthcare services for consumers.

But he stressed that Yarona Care is not the same as health insurance — there is no risk pooling as for a medical aid scheme. “This is not a medical aid scheme. It is completely outside of the medical schemes sphere and the Medical Schemes Act,” he said.

How it works
The product allows customers to load a preset package of health services onto their cellphones, in the same way that airtime is loaded onto a phone. These packages can be redeemed at a general practitioner (GP) or dentist’s office. In that sense, it is similar to a cash transaction. The upside is that the services you pay for have been prenegotiated at a low rate.

Yarona’s basic package, dubbed Impilo Go, includes a 15-minute consultation, the setting of a sterile tray, nebulisation, urine dipsticks, and a course of acute medicines as prescribed by the doctor. This package costs R230.

A follow-up visit can be covered with an R80 “recharge” package. The company also offers a package that covers nurse consultation at R80, an acute medicine package which will provide seven days worth of generic medicines for R100, and a chronic medicine package which will supply a month’s worth of chronic medication for R195.

Dental packages are also on the cards ranging from a R330 package that includes an extraction or filling as well as scaling and polishing to a R2 290 package that includes consultation and work on either a crown, denture or root canal.

The service was officially launched in Soweto on November 26 and the national rollout will follow next year. The caveat is that only GPs or dentists who are members of the Yarona network will accept the vouchers. At the moment, Yarona has about 250 medical practitioners on its network.

The company is currently designing packages that will cover optometry, specialist consultations and consultations with traditional healers. These may become available next year.

Who would use it
The service is aimed primarily at employed people who earn between R4 000 and R6 000 a month. But, Soll added, “Everybody is our target market. We want to bring this to everyone, whether they’re covered [by medical aid] or not.” This is because many people with medical aid, who have only hospital plans or who use up their medical savings before the end of the year, will pay cash for day-to-day healthcare expenses.

Soll said the company hopes small companies that may not be able to afford to provide medical aid benefits to their employees will think of Yarona Care as an alternative and more cost effective healthcare benefit.

It may also provide people who have dispersed families with a way to cover their relatives’ healthcare expenses. “We know that a lot of people who are employed are supporting people who are unemployed,” he said. In the same way that people can transfer cellphone airtime, consumers can purchase vouchers for a Yarona package at a distributor nearby and then transfer the package to a relative’s cellphone by keying in a specific code on their cellphone.

Nkosi Phathekile Holomisa, president of the Congress of Traditional Leaders of South Africa (Contralesa), said he was hopeful that, because it is based on cellphone technology, the products would make their way into traditionally underserviced rural areas.

“These days, even in the villages, everyone has a cellphone. You see a woman carrying firewood on her head and she’s speaking on a cellphone,” he said. These people could benefit from such transferable health packages.

Holomisa said he hoped Yarona Care’s offerings would eventually trickle down to people who earn less than R4 000 a month. Contralesa is a shareholder in Yarona Care through its investment arm Makhonya Investments.

A product for a missed demographic
Health and social security expert Alex van den Heever said the product could provide an alternative for people in low income groups, who are not covered by medical aid and also do not use state services.

Domestic workers or construction workers, for example, may not be based in areas where state clinics are located and also cannot afford to spend the day waiting in queues. People employed in these sectors often see GPs on a cash basis. “This looks like an interesting response to the problem of that environment,” he said.

“It will be interesting to see how it turns out because there’s a big market there. There are about 3-million people in that market, probably all with cellphones, who are not using medical aid or public sector services.”

Van den Heever said Yarona Care products might provide GPs with a guaranteed way of getting payment for services — GPs sometimes have problems getting patients to pay their bills.

On the other hand, the risk for patients is whether or not they would get the full package of services that they paid for. An unethical GP may skimp on services or medicines but take full payment of a package.

GPs sceptical
GPs are somewhat skeptical of the idea. Dr Marmol Stoltz, chairperson the South African Medical Association’s (Sama’s) GP private practice committee, said that the R230 price for a consultation and medicines, offered by the Impilo Go package, “sounds extremely low”. “I don’t think you can give a quality service for that price. People can do that but they will give you a substandard package,” she said.

According to Stoltz, the average cost of a 15-minute consultation with a GP in a private practice is R292. This price, which is based on a Sama practice costing study, excluded medicines and other expenses such as nebulisation or dipsticks. “So I’m skeptical about the pricing,” she said.

Stoltz said the service “might be in some GPs interest but it depends on the pricing”. She also said that if Yarona was to approach GPs to join its network, it should allow all GPs who are able and willing to participate, and not just target certain groups, as medical aid schemes sometimes do.