/ 28 February 2014

Comment: Preventative care will lower costs

Healthcare challenge: Better screening interventions can play a vital role in reducing the costs of medical care.
Healthcare challenge: Better screening interventions can play a vital role in reducing the costs of medical care.

The average life expectancy of a South African is 59.6 years according to the July 2013, edition of the Statistics South Africa field-worker summary report. 

The grim reality though is that a huge percentage of the country's population still does not have access to equal healthcare, in either the public or private sector. 

The Constitution enshrines the right to quality healthcare for all, and government is actively advocating for a National Health Insurance scheme. But how is quality healthcare for all to be found in the increasingly fragmented public and private health sectors?

Notwithstanding the fact that 16% of South Africans have access to private healthcare through medical schemes, there are many challenges, including the cost of private health services, the deregulation of costs and the need for negotiated deals between funders and healthcare service providers – all resulting in exorbitantly costly medical aid premiums. 

Smaller and lower-cost medical schemes are at the mercy of this tug-of-war in which they are expected to provide quality healthcare interventions, regardless of how low the contributions from their members are. 

This problem is exacerbated by state hospitals that deny care to seriously ill chronic patients who are members of low-income medical aid schemes and who seek treatment for very expensive prescribed minimum benefit conditions.

This constitutes a human rights issue: state hospitals may not turn away any patient, regardless of their income status, even if the treatment costs more than allowed for by a patient's medical aid. 

Unstable system
The average cost of care for medical-aid patients is indicative of an unsustainable system. 

This can be illustrated by the increase in the average hospital cost per beneficiary a year for members of the South African Municipal Workers' Union National Medical Scheme (Samwumed). The increase was approximately 18% between 2007 (R514) and 2013 (R1 411), and this was in a designated service-provider hospital network. 

The increase is much higher at nondesignated service providers, where no such deals exist. 

Why is the cost of patient care rising so significantly? The answer lies in the deregulation of costs and the increased burden of treating diseases that are often detected very late.

What can be done to stop this runaway train? The answer lies in tariff regulation and, of course, in the creation of a progressive, preventative healthcare system. 

Preventative healthcare solutions are often touted, seldom elaborated and more often than not never implemented as a complete strategy. If we can control disease we can better manage health costs. 

Medical schemes play a significant role in the healthcare system and must use their strategic advantage to ensure healthier members by facilitating and rewarding prevention strategies. 

Medical schemes employ intervention strategies to manage the risk pool better, such as co-payments and benefit risk strategies through managed care. But we must recognise that the solution does not simply rest with benefit cutbacks and certainly not with co-payments, as these deal a double blow to members. 

Solution in prevention
The solution lies with the progressive realisation of better preventative strategies, for example by employing benefits for vaccinations, screenings, healthcare assessments, vitamins, contraception, circumcision, and so on, as a way to manage quality health outcomes better, which would ultimately result in lower medical aid premiums. 

Easily diagnosed and treatable chronic conditions such as hypertension and diabetes are very often left undiagnosed, and thus contri-bute heavily to the health cost burden. The statistics in the illustration above extracted from the 2013 Health Quality Assessment report – a study conducted by medical scheme role players – reveal some frightening facts. 

If one considers the care provided for in hospital costs for these conditions, it would show that the rate of prevalence is much higher and that diseases that remain undetected and thus inappropriately treated cause considerable downstream costs. (The illustration also shows the exponentially rising hospital costs incurred by Samwumed members for these conditions.)

What is even more startling is that we have witnessed an average increase in the cost per beneficiary a year of approximately 18% between 2008 and 2013 – this is approximately three times the average annual inflation rate.

Private healthcare sector networks exist independently for competitive purposes, which far too often limit the potential for economies of scale that would serve to lower medical aid premiums. Why shouldn't Samwumed members enjoy the same rates as members of the Government Employees Medical Scheme, given that there is no competition between these schemes? 

Medical schemes are equally culpable of price inequality in healthcare. One would trust that this is investigated by the Competitions Tribunal – the very institution that outlawed collective bargaining in healthcare. The repercussion of its ruling against price-setting through collective bargaining has been an exponential increase in health costs since 2003.

According to the Health Quality Assessment report, it is the responsibility of the health industry to ensure "the right diagnoses, followed by the right treatment in the right setting, at the right time, at the right price, delivering the right outcome, every time!" 

Clinical quality a cornerstone 
This is why measuring clinical quality is a corner?stone of an effective healthcare system. The same report supports the notion that the objective of preventative care and health screening initiatives is to detect illnesses early, prevent future illnesses, and minimise the complications and costs that could be associated with such illnesses, particularly with respect to those people who are at higher risk.

Samwumed intends to meet with all general practitioners to discuss better screening interventions and the important role they play as the gatekeepers of their patients' well-being. It is in this dialogue that we will move away from an adversarial approach towards finding solutions.

South Africa is one of many countries with a two-tier health system that are challenged by dire healthcare needs and, until medical aid schemes are better protected and incentivised to implement preventative health treatment – and to better benchmark the cost of treatment – the problems will only worsen. 

Without negating the need for surgical intervention, particularly in the African context, the expected result of better quality of care in the primary healthcare setting would be that patients would be healthier while also enjoying paying lower medical aid premiums. 

Neil Nair is the principal officer of the South African Municipal Workers' Union National Medical Scheme