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DOCTORS GO TO COURT TO ENSURE REALISTIC TARIFFS
In April, a number of associations
(representing thousands of specialists, general practitioners
and allied health professionals) launched a judicial review of
the Director-General of Health's determination of the 2009
Reference Price List in the North Gauteng High Court. The
Director-General did not file a notice of opposition to the
application and the parties have been in settlement discussions
since the launch of the application. These settlement
discussions have recently failed and the applicants have decided
to proceed with the application. The matter has been set down to
be heard on Tuesday 22nd September 2009
The issues
at stake in the application are complex and have far reaching
implications for the provision of health services to the people
of South Africa. The applicants believe that the
Director-General has failed to determine an accurate Reference
Price List (the RPL) which reflects the real cost of providing
health care. Further, in determining the 2009 RPL, he has failed
to comply with the law in a number of respects. For example, he
did not give many of the applicants proper reasons for his
determination of the RPL, rejected some of the applicants'
submissions without good reason and he failed to properly verify
the applicants' submissions on the RPL.
The need to
ensure that South Africa has a properly determined and
reality-based RPL is about ensuring that South African doctors
are able to provide the best quality health care and that
patients are able to access this health care. Independent
observers rate the South African private health sector highly,
with the Monitor Group rating it 4th on quality and only the
22nd most expensive, out of 41 countries in a recent survey. It
is the very survival of this excellent service which is at stake
in this case.
The RPL was introduced in 2003 after the
Competition Commission put a stop to tariff negotiations between
doctors and medical schemes, and the RPL was conceived as a
guideline to enable medical schemes to determine their benefits.
The RPL is meant to be based on the cost of providing
health services. Making cost explicit in the price was intended
to enable the DOH to put a brake on what was perceived to be
rampant inflation in the medical schemes industry - a process
driven by the presumed high prices being charged for
professional services.
Following some initial
reservations about the model, and a warning that the process was
likely to reveal the opposite of what was apparently expected by
the DOH, i.e. that the tariffs for medical fees were in fact
unrealistically low, the medical profession agreed to
participate in the process and then proceeded to spend many
hundreds of hours, and great sums of money producing cost
studies in compliance with the regulations. These studies were
duly completed and the applicants made submissions to the DOH in
May 2008.
However, when the draft 2009 RPL was published
by the DOH it was announced that only 11 of the 48 disciplines
submissions had been accepted for verification, rejecting the
remaining 37 submissions. In addition, when the final 2009 RPL
was published in December 2008, all of the disciplines were
given an across the board inflation indexed increase of 10.7%,
instead of the anticipated cost based increase as required by
the regulations. The applicants were exceptionally disappointed
that, despite the hours of work and the sums of money spent in
order to compile their submissions on cost of services, the DOH
simply ignored the studies and applied an across the board
inflationary increase.
The cost studies indicate, just
as the profession had said they would, that professional fees
are far too low, and that the required increases would exceed by
far the 10.7% adjustment for inflation. There was also in most
instances no good reason for the DOH rejecting the costing
submissions. Although verification of the submissions should
have preceded publication of the draft 2009 RPL in 2008 the
process is still, in July 2009, not complete (i.e. more than a
year after the costing studies were submitted to the DOH).
The cost studies mandated by the RPL regulations have shown
something that doctors for many years have understood - that the
benefits allowed by most medical schemes, which rely on the RPL
as a guide, were priced far below what the services cost to
provide, and that doctors, far from being greedy capitalists
(that some politicians have chosen to portray them as) , are in
fact simply trying to do their jobs and make a decent living.
Despite working with a price list that, it is now clear,
is significantly below cost, doctors have continued to provide a
world class service, the envy of many competitors in other parts
of Africa and the world. How has this been possible, if the
profession is indeed so poorly remunerated? How is it that
doctors are still in business and have not all filed for
bankruptcy? The answer lies in the long hours that they are
forced to work, and by virtue of the ability to charge a
co-payment. Co-payments are out of pocket expenses met directly
by the patient without recourse to their medical scheme.. The
difficulty with this is that working long hours and charging
co-payments are not good for the doctors or patients and are
definitely not a long term solution. The court application is a
last resort attempt to try to ensure that the Director-General
considers the long term interests of both patients and doctors
when determining the RPL.
The implications for the
patients who use private services, and for the South African
economy, if the RPL is not calculated so that it accurately
reflects the cost of private health services, are dire. For
robbed of their ability to earn even a reasonable living, many
doctors are likely to take their earnings and their taxpaying
capabilities elsewhere. And with them, many other skilled
professionals are likely to follow. When one considers that
medical scheme members also contribute about 80% of the taxes
that fund the state health services, the loss of potentially
thousands of tax payers to the South African economy would be
dire indeed. For these reasons the applicants in this case
believe it is vital that the DOH be compelled to produce a RPL
that is a true reflection of the costs involved in providing a
private health service. The applicants would prefer not to have
to go to court, but because of the current stance of the DOH,
have been forced to do so.
The applicants are determined
to fight for a defendable and realistically priced RPL; for the
sake of all patients who already benefit from the high quality
health service currently available in the private sector, and
for the many thousands of South Africans, who hopefully in the
near future, will also benefit from the care of these self-same
dedicated professionals, working in an expanded national health
insurance health service, that pragmatically has found a way to
accommodate the private sector.
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