Parasites prey on the sick

03 October 2013
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THE article published in the Windhoek Observer last week under the headline “Medical Aids, Doctors in Tariff War” opens up the opportunity for a very timely debate on this very important subject.

Only genuine grievances could have driven The Namibia Private Practitioner’s Forum (NPPF) to take the drastic step of reporting the Namibian Association of Medical Aid Funds (Namaf) to the Namibia Competition Commission.

It accuses Namaf of unilateral, non-transparent and uncompetitive medical tariff price setting as well as lack of consultation with medical doctors and of sweeping their concerns under the carpet.

It also takes issue with the outsourcing of medical aid services to third-party administrators that fall outside the net of any kind of statutory regulation.

You can search high and low but you will not find any rational explanation for why the medical insurance industry needs third-party administrators.

They are like leeches that feed on the blood of sick people but bring nothing to the table in terms of improved healthcare for medical aid fund members, or lower costs.

One can only surmise that one of the reasons they exist is that they supposedly reduce the administrative costs of the medical aid funds.

While they might decrease the costs of the fund, they seem to add an unnecessary layer of cost to private healthcare as a whole.

It’s only logical that the insertion of a middleman into the system – that seemingly adds no value – should substantially increase overall cost.

The problem is not unique to Namibia, but has become a major issue in neighbouring South Africa.

Doctors and particularly medical specialists feel that patients unfairly blame them for the high cost of private medical care.

Doctors hate medical aid fund administrators and medical aid members have no special fondness for them either. The only ones who seem to love them are the medical aid funds.

That begs the question of why we should allow a system that only makes one party happy and not the other to continue.

If the we want the system to function properly we need to reshape it in a way that creates a win-win situation for all concerned.

In January last year, South Africa’s Independent Online gave a breakdown of where the massive N$84.9 billion medical aid schemes in that country spent on private healthcare in 2010 ended up.

Private hospitals took the biggest slice of the pie at N$37.1bn, or 37 percent of total spending.

Medical specialists cashed in N$18.8bn, N$6.2bn went to general practitioners leaving dentist with only N$2.5bn.

An amazing N$11.6bn or 13.66 percent went to “non-health care costs” such as administrator and managed care fees.

Okay, you might say, 13.66 percent does not constitute the largest chunk, but what value do administrators add to patient care to deserve such a large portion.

Medical specialists pocketed 22.14 percent, but the poor GPs who represent who man the frontlines of medicine only received a lousy 7.3 percent of total medical aid spend.

However, most of us probably have no problem with this because we understand that they save lives, they help to heal us when we are sick and ease pain and distress.

However, one fails to see what tangible role medical aid administrators play in healing sickness.

A far more sinister reason may lie behind the existence of medical aid administrators.

In terms of the Medical Aid Funds Act, (No. 23 of 1995) medical aid funds should operate as not-for-profit organisation, which is not very lucrative for those who run the funds.

Medical aid fund administrators on the other hand can make profits hand over fist without any inhibition, restraint or control.

Critics have pointed out that some medical aid trustees are directors or employees of the medical aid administrators, which represents a clear conflict of interest because of the opportunities for financial benefit.

No reason really exists why medical aid funds and their members cannot deal directly with each other instead of having to go through an unwelcome third-party intermediary.

We perhaps need to re-examine the need for medical aid administrators, and if we cannot do away with them altogether, Government needs to strictly regulate and cap the profits they make.

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WINDHOEK OBSERVER

The Windhoek Observer is an English-language weekly newspaper, published in Namibia by Paragon Investment Holding. It is the country's oldest and largest circulating weekly.

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