Medical schemes paid out R160.6bn during 2017, mostly for hospital care – report

Overall medical schemes spent R160.6bn on healthcare benefits in 2017, up 6.04% from the R151.2bn spent in 2016.

This is according to the Council of Medical Schemes annual report, for 2017/18, released on Thursday. The council is a regulatory body for medical schemes.

According to the report, most of the healthcare benefits went towards covering hospital expenditure, which amounted to R59bn or 36.8% of the R160.6bn spent.

Less than a quarter (23.9%) of total healthcare benefits amounting to R38.5bn were paid to specialists such as anaesthetists, medical specialists, pathology services, radiology and surgical specialists. This is up marginally from the R38.2bn paid to specialists in 2016.

"The bulk of medical schemes’ total expenditure continues to be paid to hospitals and specialists," the report read.

This was followed by medicines dispensed from pharmacists and other providers apart from hospitals which accounted for 16.1% or R25.81bn. The amount spent on medicine grew by 7.74% compared to the R23.9bn spent in the previous year, according to the report.

Amounts paid to supplementary and allied health professionals increased 7.1% to R11.7bn – and accounts for 7.3% of healthcare benefits paid.

Expenditure paid to general practitioners came to R9.1bn (5.6%) of total healthcare benefits, this amount grew by a mere 1.9% spent last year. "Only 11.2% of the R9.1bn paid to GPs in 2017 was paid to GPs operating in hospitals," the report read.

The report also showed that members of medical schemes paid an extra R31.8bn in out-of-pocket expenses for private health services, up 7% from R29.7bn reported in the previous year.

The bulk (33%) of these payments went towards "out-of-hospital" medicine claims, this was followed by payments for supplementary and allied health professionals which accounted for 15% of out-of-pocket expenses. This is similar to the trend observed by the council last year, according to the report.

Prescribed Minimum Benefits (PMBs) payments amounted to R79.2bn. PMBs are a set of benefits to ensure that all medical scheme members have access to certain minimum health services – such as emergency care, certain medical and chronic conditions - regardless of their benefit option. Medical schemes must cover these costs.

"The expenditure on PMBs for 2017 was R746 per beneficiary per month, representing a 9.5% increase from the recalculated figure of R681 for the 2016 financial year," the report read.

The report further highlighted that broker costs increased 9.6% to R2.2bn in 2017. "Broker costs represented 14.5% of total non-healthcare expenditure in 2017, while they accounted for 14.1% in 2016."

Fraud, waste and abuse

The regulator picked up ongoing fraud, waste and abuse by some providers, who in some cases colluded with members of medical schemes. "In some instances providers often informed providers that they suffered illnesses which qualified for PMB payments, when this was not the case," a statement from the council's acting Chief Executive and Registrar Dr S Kabane read.

"As a result of fraudulent practises about 15% of all claims submitted in 2017 were due to fraud, waste and abuse."

Kabane assured that the council would continue monitoring PMB expenditure – with the intention to protect the rights of beneficiaries.

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