Medical aid schemes in a fix

A number of laws and government policies are causing healthcare costs to increase.

In 2004, the Competition Commission outlawed the forum used by medical schemes to negotiate with doctors and hospital groups on medical tariffs, saying it amounted to "collusion".

As a result, smaller medical aid schemes are now in a weaker position when negotiating with big hospital groups.

In addition, doctors and medical aids are now unable to determine prices for new procedures, and there is no agreement on a reference price list for treatments.

The Health Professions' Council has now gazetted guideline tariffs for medical procedures and is reviewing the reaction to them of doctors' groups and medical schemes.

Many have called for the negotiating forum to be brought back.

Health economist Professor Alex van der Heever said an "independent negotiation forum is needed" to determine the maximum out-of-pocket payments patients should pay when medical aids do not cover the full cost.

Board of Healthcare Funders spokesman Heidi Kruger said: "The smaller schemes have very little negotiating power."

Consumers have to pay higher premiums as medical aid schemes battle growing costs while being given limited legislative protection.

By law, medical aids are forced to accept anyone, no matter how sick or old.

But they are not protected by mandatory cover, which would force all working people to join a scheme.

Kruger said: "Belonging to a scheme is voluntary.

"Young and healthy members therefore do not always belong to a scheme, or they opt off when premiums rise, leaving the elderly and sick on the system, pushing costs up even more."

Spokesman for the Financial Intermediaries' Association of Southern Africa Gareth Stokes said that there were not enough healthy members of medical aids cross-subsidising the sick .

But Van der Heever believes mandatory cover is unnecessary. He said medical aids could protect themselves by imposing late-joiner fees and waiting periods.

Van der Heever accused the government of not developing "stabilisation mechanisms to protect private health insurance markets, which are vulnerable to excessive price increases".

Such mechanisms would include a negotiating forum and setting maximum out-of-pocket prices for consumers.