by Actuarial Society Of South Africa

overcharging by medical practitioners

Addressing the issue of overpriced medical care

At what cost?
Overcharging by medical practitioners

Health Professions Council of South Africa (HPCSA) recently appointed a healthcare actuary to assist with setting a guideline tariff that can be used to assess overcharging by medical practitioners.

Respected healthcare actuary Shivani Ramjee has been appointed for this task. Ramjee, a member of the Actuarial Society of South Africa and head of actuarial science at the University of Cape Town, says the absence of guideline tariffs for medical and dental practitioners has created a problematic vacuum that leaves consumers unable to prove accusations of overcharging by medical and dental practitioners.

The Health Professions Act makes provision for the establishment of a mechanism by which the HPCSA can determine whether a medical practitioner overcharged a patient by means of a “price norm”. However, this has yet to materialise. A previous attempt to introduce guideline tariffs was aborted last year after medical associations threatened legal action. The HPCSA stood accused of having set guideline tariffs that were unreasonably low and calculated without scientific basis.

By enlisting the help of a healthcare actuary, the HPCSA is making sure that future price norms will have a strong scientific basis.

“Since the setting of a norm will have financial implications for health professionals, funders and the general public this process needs to be fair, rational and lawful,” comments Ramjee.

Empowering patients

She says guideline tariffs will only become a reality if the differing needs of all stakeholders are met in some way.

“Guideline tariffs must protect the right of medical practitioners to earn a fair living and recognise the fact that their skills are scarce. A pricing norm must also ensure the sustainability of private practice and ensure that the profession remains attractive to new entrants.

“Consumers, on the other hand, are entitled to fair and reasonable fees. Equally important is that patients are empowered to give informed consent based on transparent pricing structures.”

Following the termination of last year’s guideline tariffs the HPCSA launched a comprehensive public participation process to determine the guideline tariffs that meet the requirements of medical practitioners as well as consumers.

Ramjee says more than 80 submissions were received from various interest groups including medical and dental practitioners, professional bodies, consumer groups, funders, administrators, individual patients and the Competition Commission.


Deep levels of mistrust

Ramjee says the sentiments expressed in the submissions indicated that the highly complex process of establishing guideline tariffs is further complicated by deep levels of mistrust between stakeholders and conflicting views on what the pricing norm should be.

But despite the complexities and emotions that have marred the process thus far there is light at the end of the tunnel, according to Ramjee. “A meeting in April attended by stakeholders who made submissions into the process was unprecedented in that this was the first time that the various stakeholders engaged constructively on the subject of tariffs.”

Following the analysis of the submissions made to the HPCSA and the feedback from the stakeholder engagement, Ramjee says the next step is to design a process that will be used to determine the final numbers that will make up the guideline tariffs.

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