WHAT DO OTHERS SAY ABOUT HEALTHCARE PROVIDER TARIFFS: THE REASON FOR MEDICAL TOP-UP (GAP COVER)
by Gareth Stokes, FAnews Online Editor
On 7 August 2012 the Health Professions Council of South Africa (HPCSA) released a new Healthcare Provider Tariff guideline. The new guideline, set to come into effect on 10 August, was met by howls of disapproval from certain healthcare professionals.
The HPCSA “Ethical Tariffs” were introduced years ago to provide certainty to medical schemes and their members on acceptable healthcare provider charges. Over time industry stakeholders migrated from this tariff to a National Health Reference Price List (NHRPL), with the result that the HPCSA abandoned its Ethical Tariffs in 2008. The last Ethical Tariffs prices were set in 2006 to cover three levels of “service” from basic Public Sector to High-end Private Practice charging. Around 2005, the Competition Commissioner issued a ruling that prohibited medical schemes from entering collective bargaining arrangements with healthcare service providers and in 2010 the High Court scrapped the NHRPL. This void in tariff and pricing guidelines resulted in opportunistic charging by certain healthcare providers and massive increases in medical expenses.
NO ETHICS WITHOUT REGULATION
In the absence of tariff guidelines, it was virtually impossible for medical scheme members to know the cost of their treatments upfront. The quantification and comparison of healthcare quotations between one provider and the next was further complicated when medical schemes started creating their own tariff codes. “Since 2006, the list of tariff codes has been manipulated and changed by some healthcare provider groupings, resulting in uncertainty in the medical scheme environment around the accuracy and the appropriateness of these codes,” notes the Board of Healthcare Funders (BHF), which represents most South Africa’s medical schemes.
Against this backdrop, the HPCSA decision to reintroduce tariffs makes sense. Regulators and representative bodies such as the BHF have welcomed the move and say that it will address cost escalations in the private healthcare sector. “We feel that this is a much needed first step in bringing about certainty to medical schemes and their members,” says Dr Humphrey Zokufa, MD at the BHF. “Certainty in what a patient will pay for a procedure, or a consultation is critical, especially in healthcare where the patient is sick and vulnerable at the point of service”. Patients will be informed of costs before a procedure is undertaken and will have to be consulted if the provider wishes to charge over and above the HPCSA tariffs.
Unfortunately, the way the HPCSA has gone about announcing and implementing its new tariffs leaves much to be desired. As much as the BHF sings praises for the initiative, it also sounds a warning. It says the 2006 NHRPL, upon which the new tariff guide is based, “may not always reflect the real costs of providing healthcare”. The decision to adjust the “basic” 2006 prices using an inappropriate inflation-linked formula – coupled with a “check box” consultation in the run up to the change – triggered a frenzied protest from certain professional associations. Some even threatened court action to overturn the new tariffs.
FLEECED BY AN “ILL-THOUGHT” FORMULA
The South African Dental Association (SADA) was particularly incensed by the new tariff guidelines. “While the HPCSA met with SADA and the South African Medical Association (SAMA) earlier this year, it is now evident that these meetings were merely an attempt to ‘tick the box’ of consultation,” said Maretha Smit, CEO of SADA. She said that none of the suggestions made by SADA were considered in establishing the tariff guideline and accused the HPCSA of setting current prices by means of an oversimplified consumer price inflation adjustment of the 2006 Reference Price List.
“The HPCSA seems to have purposely avoided using the approved professional fees as a basis for the guideline, opting instead for the NHRPL – a tariff structure that is a very poor reflection of a fair fee in terms of private dental practice in South Africa today,” said Smit. As a result, the 2012 HPCSA Tariff Guidelines are between 30% and 40% lower than the published HPCSA fees for private dental practitioners in 2006, and up to 65% lower after allowing for inflation. She also argued that it was absurd to base prices on a reference list that has been struck down by a court of law.
It is common knowledge that healthcare inflation runs at multiples of the official inflation rate. Dentists and doctors in private practice must deal with escalations in costs of basic equipment as well as the heavy burden of overheads and materials, most of which are imported from abroad. Dental practices are also heavily dependent on water and electricity which have seen massive inflation-plus increases in recent years. Extensive developments in technology since 2006 also mean that there are new procedures which urgently need to be added to the procedure coding list.
IS THE NEW GUIDELINE ALREADY OUT OF DATE?
“The tariff guideline as now published by the HPCSA, simply ignores all technological innovation since 2006 and, because no provision is made in the current codes, best practice in the profession is also ignored,” said Smit. SADA supports the transparent discussion of fees for dental services but is concerned that the new tariff guidelines will guide public opinion in respect of “reasonable” fees for dental services. “A fee discussion in the context of a statutory published guideline becomes a very different conversation to one which is purely market driven,” she said. “It is unfair to expect highly qualified professionals to continuously justify their fees as a result of an unreasonable guideline”.
In the immediate wake of the new tariff announcement SADA threatened to challenge the decision in court. The organisation subsequently placed its intended legal action against the HPCSA on hold following a meeting between the president of the HPCSA, Professor Sam Mokgokong, SADA, SAMA. and the SA Private Practitioners Forum. At this meeting, Mokgokong advised that publication of the HPCSA proposed tariff guidelines in the Government Gazette had been placed on hold until further deliberations at the council meeting, to be held on 3 September 2012.
EDITOR’S THOUGHTS
The remuneration of professionals creates a stir regardless of the sector of the economy they practice in. And it seems that doctors and dentists in private practice face similar regulatory challenges when it comes to setting fees for their services as financial advisers. Has the Health Professions Council of SA overstepped its authority by publishing its tariff guidelines prior to obtaining buy-in from the professionals it represents?
This is the reason for Medical Top-up (GAP) Cover.
