Medical tariffs: professional association briefings, Compensation Commissioner for Occupational Diseases Annual Performance Plan

Meeting report

Chairperson’s opening remarks
The Chairperson noted that this morning’s presentation from the Compensation Commissioner for Occupational Diseases (CCOD) was all the more pertinent because of the recent tragedy at Lonmin mines at Marikana. Money from the mines to compensate the miners affected by these diseases was a very important issue that had been totally neglected and totally mismanaged. Reflecting on the tragedy at Marikana, he urged that government concentrate on lessening the gap between rich and poor.

The Committee stood and observed a minute of silence for those who had lost loved ones in the recent tragedy at Marikana.

Compensation Commissioner for Occupational Diseases (CCOD) Annual Performance Plan
The Chairperson noted that the CCOD had, at an earlier stage, been asked to present its strategic plans, but had been asked to return with new and updated documents. He noted that the documents had only just been received, and stressed that in future, they must be received at least two days in advance so that Members could familiarise themselves with the contents.

Ms Precious Matsoso, Director General, Department of Health, noted that at the time that the CCOD had been sent back, she had investigated the matter. The three institutions, CCOD, Medical Bureau for Occupational Diseases (MBOD) and the National Institute for Occupational Health (NIOH) should be under one umbrella, because they did related work. The Department of Health (DoH) invited a team led by Dr Barry Kistnasamy, Compensation Commissioner, to give guidance on the issue. She suggested that the problems and issues needed to be outlined, and that it would be useful to do so now, rather than moving directly to the Annual Performance Plans. She noted that the concerns of the Committee about the previous presentation were noted, and Dr Kistnasamy had taken over as the new Commissioner of the CCOD. It had been found that a number of miners’ files were lying dormant and not processed and the DoH had put a team of graduates to capturing those.

Ms Matsoso noted the remarks about the late submission of documents, and said that there had been delays because of the Marikana issues, as the DoH representatives had returned from there only on the previous evening, but the Minister was still there.

Dr Kistnasamy, Compensation Commissioner, said that the CCOD had undertaken some studies as to what went wrong with the health and safety of workers, and how it could be improved. Compensation was only one part of the solution to create a better life for all workers. He noted that, globally, two million workers died every year from occupational injuries and diseases, which was an indication of how the issue was neglected.160 million new cases of occupational diseases, 250 million occupational accidents and 300 000 fatalities cost 4% of world GDP.

South Africa had fragmented policy, in that three departments looked after health and safety in our country, namely the Department of Health, the Department of Labour (DoL), and the Department of Mineral Resources (DMR). The occupational health system was inadequate, although the health system was much bigger with its policy framework, organisation and delivery of services, monitoring and evaluation, and funding of services. There was no surveillance of injuries and diseases in the country, deficient occupational health services, and a lack of human resources for occupational health. He pointed out that if occupational injuries and diseases were not measured, they could not be managed. There were problems of access, coverage and equity in compensation systems. The Committee had many times raised the concerns of having one office in Johannesburg, problems in the Eastern Cape, and issues with migrant workers outside the country. The mining sector was pivotal in occupational health matters.

South Africa had two compensation systems, the Occupational Diseases and Mine Works Act (ODMWA), which fell under the Minister and Department of Health, with Dr Kistnasamy as the Commissioner. The Compensation for Occupational Injuries and Diseases Act (COIDA) fell under the Department of Labour.

There were 17 million workers in the country, of which the bulk were working in trade. The second economy however comprised people who were undertaking subsistence work, including hawkers and waste pickers, and the CCOD, in terms of the International Labour Organisation Convention, was looking at issues around decent and safe work, and including subsistence work under the legislation, as it was not covered at present.

From 1920 to 2010 the mining industry was based on migrant labour, which was not desirable. Currently, three people died from occupational accidents every day. Approximately 500 000 workers were undiagnosed and uncompensated. There were ongoing discussions with the mining houses. Over a ten-year period, there were increases in lung disease in the mining sector, predominantly tuberculosis, emphysema, and silicosis, whilst silicosis and HIV statistics had risen dramatically. There was a direct link between dust exposure, silicosis and tuberculosis, and the figures were worsening. He pointed out that as the gold price had risen, more should have been put into addressing these diseases. The value of the mining sector in South Africa was R18 trillion, and it employed 500 000 persons in 2 200 entities.

Mining fatality rates showed a downward trend. The three dominant countries for mining were Canada, South Africa and Australia, but four of the top ten mining companies in the world were South African. South Africa’s mine fatality rate was approximately 32.9 deaths per 100 000 miners, whereas Australia was 2 per 100 000 miners. Dr Kistnasamy pointed out that four out of the top ten mining companies were mining in South African companies that also operated in Australia, Chile and Canada, and it made no sense why the South African fatality rates should be five times worse than some other countries.

The World Health Organisation had said that 250 cases of TB per 100 000 miners was “a catastrophe” and, by comparison, South Africa had 1 300 cases of TB per 100 000 miners in the gold mining industry. The Silica dust exposure levels for miners in Chile were 0.04 mg/m2, in Argentina 0.05, in British Colombia/Canada 0.025, but were as high as 0.1 mg/m2 in South Africa.

Dr Kistnasamy summarised that all these statistics pointed to lack of a proper system, fragmentation of policy at administrative level, and inability to measure what was being done. There was pressure on multiple fronts, but the new Director General had shown the desire to make a difference.

Firstly, CCOD planned to review and restructure the institutions under the ODMWA. The National Institute for Occupational Health (NIOH) was an entity within the National Health Laboratory Service, and consideration would be given to how to deal with it. Work had begun to develop a unified management structure. The policy and legislative reforms to ODMWA would be continued. Surveillance systems were being developed. Research was being conducted, and here he pointed out that one of the funds in the CCOD covered research. It was vital to set up an effective and efficient compensation system for miners and ex- miners. That would include clearing backlogs; improving turnaround times for claims certification, processing and payments, ensuring financial sustainability of the Fund; and decentralised benefit examinations.

Dr Kistnasamy noted that the CCOD had not provided two annual reports, and there had been no reports from the Medical Bureau for Occupational Diseases (MBOD) since 1999. The DoH was trying to rectify that, by preparing the 2010/11 and 2011/12 annual reports, reviewing the Annual Performance Plans, responding to the Auditor-General’s report, and establishing a medical inspectorate. Such inspectorate was mandated to enter mines to view their work and take dust control measures, but had not yet been established; now the CCOD was doing so, with the DMR. The medical inspectorate would have powers of search and seizure. CCOD was also strengthening links to the Department of Mineral Resources’ Risk Committee.

The Occupational Health system links to the primary healthcare included the provision of one nurse at each facility who would be trained to recognise work related injuries and diseases, and be able to refer a patient to a district hospital. At the district hospital, there would be one doctor and one nurse trained to manage work related injuries and diseases. Links to the South African Social Security Agency (SASSA) and private providers would be made. An occupational health unit should be provided at a specialist hospital to manage workers with ill health, and this would include links to occupational health academic units, the National Health Insurance. A surveillance system for occupational health would be developed. In phase II, there would be development of innovative models for occupational health services, an integrated social security system for workers and more infrastructure and human resources for occupational health. This would also include appropriate funding for the occupational health system – for prevention, treatment and care, rehabilitation and compensation. It was recognised that work should not maim or disease its workers so the DMR and Public Service and Administration would be working to achieve better health for workers.

Dr Kistnasamy noted that this was a new vision, and it was necessary to allow for briefings by the Minister of Health, the National Health Council and to inform the trade unions and employer bodies.

Dr Kistnasamy then outlined some of the recent legal developments. He reminded the Committee that in 1914, Sol Plaatjie had described miners as “subterranean heroes who, by day and by night, for a mere pittance, laid down their lives to the familiar ‘fall of rock’ and … sacrificed their lungs to the rock dust that developed miners’ phthisis and pneumonia”. In the matter of Mankayi v AngloGold Ashanti, the Constitutional Court ruled that Workers’ Compensation did not take away an individual’s right to sue an employer for an unsafe working environment. The CCOD had recently won a case instituted by the Chamber of Mines.

Discussion
The Chairperson thanked Dr Kistnasamy, and said that this was exactly the type of intervention that should have been made at Lonmin. He pointed out that for every miner who died or was injured, about ten dependents were affected.

Ms M Dube (ANC) asked for clarification as to whether claims were paid by government or employers.

Dr Kistnasamy responded that ODMWA was under the management and control of the Department of Health, and every mining house had to pay a levy, which was intended to cover lung disease. He stressed the anomaly of brains, head and leg injuries being covered by COIDA, whilst lung and heart disease was covered by ODMWA. Levies were based on the risk shifts. When compensation was paid, it was paid through either ODMWA, Workmen’s Compensation (DoL) or Unemployment Insurance Fund (UIF). DoH also had appropriations from Parliament that covered pensioners. In the Chamber of Mines case, the Chamber had suggested that the Minister should approach Parliament for extra appropriations to cover shortfalls, but the court decided that mining houses were responsible for shortfalls.

Ms M Segale-Diswai (ANC) thanked Ms Matsoso for her support and for responding to her letter. She commented that she found the acronyms confusing.

Dr Kistnasamy promised that in future, a glossary would be provided.

Ms Segale-Diswai said that in future she would like to see a joint management team established by the Departments of Labour, Health and Mineral Resources. Ms Segale-Diswai asked for information on the staff establishment, and stressed that all duties must be carried out.

Ms Segale-Diswai asked if the medical condition of those discharged from hospital after developing a lung disease was followed up.

Ms Segale-Diswai wondered if it was practical to have one nurse per facility, pointing out that this might be difficult in the rural areas. She asked how the Department intended coordinating occupational health in districts and sub districts. She said that the South African Nursing Council must be asked to include occupational health in its syllabus.

Dr Kistnasamy said that in practice, not every facility would not be able to afford occupational health specialists, but it was important to try to establish the necessary links at relevant facilities, so that, for instance, the district hospital was an important focal point, and it would stress training in occupational health. He thanked Ms Segale-Diswai for raising the important point of the Nursing Council, and agreed that the problem must be recognised and then attempts made to incorporate it into the system. The private sector had to contribute. The Department would report back with some new financing models.

Ms D Robinson (DA) appreciated the enlightening presentation, but suggested that, for the future, the names of presenters be included on the documents, together with contact details. She asked what routine occupational health care measures were available at the mines, including examinations on arrival, clinics, regular screening, and exit examinations.

Dr Kistnasamy responded that by law there had to be a pre employment examination, periodic medical examinations, and exit medicals. The DoH would have to check if that was properly done. For ex-miners, the CCOD was supposed to provide for examinations, but in practice many of those ex-miners returned to their own homes, even other countries. A person who was based at a mine in Johannesburg had access to a whole range of resources, such as mine hospitals and mine clinics, but would have to rely on public health services, once out of the system, and this might not pick up the mining-related problems.

Ms Robinson was horrified to see the range of diseases, and commented that it was shocking that miners, having spent most of their lives working, tended to retire with little quality of life. She suggested that there had probably not been enough analysis, and urged that the health condition of miners must be followed up.

The Chairperson also reflected on this issue, and said that nobody was educating miners, in advance, of the occupational hazards of this work, and even the clinics tended to protect the mining houses. He agreed that this had to change.

Ms P Kopane (DA) appreciated the presentation,; and said analysis reflected how the country had failed its miners. She was also disturbed to realise how little people were compensated, and how little they earned, and urged that attention must be paid to both these issues. She also said that something had to be done to address the estimated 480 000 people who were undiagnosed or uncompensated. She believed that the DoH was now determined to change the situation, and appreciated the frank presentation of its challenges. She asked what the cost implications were to develop the infrastructure and human resources for occupational health.

Dr Kistnasamy responded that across the three institutions, the staff complement was about 250 personnel. These institutions were presently restructuring and actual figures would be presented later. A budget figure had been fixed for the following year, and the Committee had also urged the DoH to attend to this. 30 interns had begun in June, and the Director General had provided some funding from donors to provide additional office furniture and computers. DoH Head Office in Pretoria had been very supportive. The plan was to increase the staff complement over the next three years, when the centralised model changed to one that was decentralised.

The Chairperson asked whether the unions were aware of this, and whether union members were informed.

Ms Kopane added that shareholders must also be told of this.

Dr Kistnasamy pointed out that if government did not take the lead to look after the poor and vulnerable, nobody else would. Trade unions had actually done more work prior to 1994 than post 1994. He had not heard the unions say they would fight for safe and healthy workers.

The Chairperson noted that business was really interested in profit above all, and said that possibly the same situation pertained in other countries, but because labour was cheaper in this country, more money accrued to business.

Ms B Ngcobo (ANC) noted that during a visit to a mine hospital, it was noted that the majority of patients were mine workers, of whom half had HIV, and many also had multi-drug-resistant TB. She asked about the extent of HIV amongst miners, and whether there a referral system once they were discharged.

Mr Kistnasamy responded that CCOD had led a major study, commissioned by the Department of Mineral Resources, on HIV/Aids in mining, and that report could be sent to the Committee. Some of the major mining houses were trying to address the issue, but across the board relatively little was being done in this field.

Ms Ngcobo said that a better distinction was needed as to what issues fell under DoH and what under DoL. She asked if there was adequate treatment being offered also for injuries.

The Chairperson pointed out that many of the diseases developed only over time and wondered if the illness of an ex-miner was necessarily traced back to his work on the mines. HIV would be spread if the miner moved to another area.

Ms Dube said that she had heard of a fund for people injured on duty that was not government-run, and therefore asked if those who were claiming were claiming from their employers, or from government.

Dr Kistnasamy responded that initially, the Workers Compensation legislation was interpreted so that workers lost their right to sue their employers if they claimed compensation. However, NIOH had then taken up the issue of those employers who failed to provide safe working environments. At the moment, there were a number of claims instituted against former employers, following the Constitutional Court judgment that when the company did not provide a safe and healthy workplace, it could be successfully sued.

Dr Kistnasamy stressed again that injuries or disease to heart and lungs fell under COIDA, and the Fund was administered by Rand Mutual, a private organisation licensed by the Department of Labour to provide compensation services, which were funded by the levies were collected from the mines.

Ms Dube asked if mine inspectors were still operating.

Dr Kistnasamy responded that two pieces of legislation covered health and safety in the workplace. The Mine Health and Safety Act fell under the Department of Mineral Resources. The Occupational Health and Safety Act covered workers in the non-mining sector, and fell under the Department of Labour. The Mining Inspectorate enforced the mining legislation, including levels of mine dust.

The Chairperson remarked that the Committee needed to place greater emphasis on following up on occupational health.

Ms Dube understood that the emphasis today was on mines, but asked if other institutions, such as the manufacturing sector, were covered as well.

Ms Matsoso said that she had noted, at the outset, the need for significant reform of occupational health in general. The ODMWA legislation was the basis for CCOD, MBOD, the National Health Laboratory Services Act and the NIOH. She had referred to the need to bring together the CCOD, the MBOD and the NIOH under one umbrella. She emphasised again that the type of injury or disease determined under which department and legislation it would be dealt with, and this was not ideal. NIOH, that had technical capacity, sat apart from CCOD, which mostly had junior capacity. At the moment, a miner seeking compensation would have to come to Johannesburg. It would not be a simple solution of merging CCOD with the Department of Labour bodies, but greater coherence was needed with the three institutions mentioned. NIOH should be separated from its current links with the National Health Laboratory Services, a pathology institute. The DoH was working on a draft bill to integrate all those institutions, which might be presented to Parliament before the end of the year. She added that of the interns taken in, some had financial qualifications, others IT qualifications or HR qualifications. Interns were trained and would help build the system. About 48 interns had already begun capturing data.

Dr Kistnasamy added that the DoH was aware of the need to set up some better surveillance system, because it was difficult to manage the burden of disease without knowledge of how far it extended. He hoped that the maxim “Fit for work, fit for life, fit for tomorrow” would become a reality, and added the sobering statistic that currently, about three workers were likely to die each day, and have no tomorrow.

The Chairperson thanked the presenters, and urged that work on TB amongst miners must also continue. He noted that the particularly poor provinces of Limpopo, Eastern Cape, Kwazulu-Natal needed to be able to access compensation where appropriate from this industry, for ex-miners who needed medical care. He suggested that the DoH should set up specific institutions, run by a specialist doctor, to focus on those people with mine-related disease.

Guideline tariffs for Medical Practitioners and Dentists: medical association briefings
The Health Professions Council of South Africa (HPCSA) briefing
The Chairperson introduced the briefings by noting that the Health Professions Council of South Africa (HPCSA) had put up guideline tariffs for comment. Although they were originally supposed to have been gazetted on 17 August, this was postponed.

Dr Buyiswa Mjamba-Matshoba, Registrar and Chief Executive Officer, HPCSA, noted that the HPCSA was a statutory body under the Health Professions Act 56 of 1974, mandated to regulate the health professions in the Republic of South Africa. It attended to setting minimum requirements for education and training, monitoring compliance of education and training with set minimum standards, and registration and licensing of practitioners to practise. It also set minimum requirements and monitored Continuing Professional Development  and dealt with matters relating to Professional Conduct.

The HPCSA comprised of 32 members appointed from the professional boards that controlled the various branches of the medical professions, under the overarching guidance of the HPCSA.

In terms of section 90(1)(u) and (v) of the National Health Act (the Act), DoH had to make regulations relating to the processes and procedures to be implemented in the determination of the reference price list. The reference price list had been set aside by the High Court, so the HPCSA was currently faced with a problem when dealing with complaints relating to overcharging, because there was no legally-determined tariff at present.

Dr Mjamba-Matshoba pointed out that section 53(1) of the Health Professions Act required a medical practitioner, prior to rendering professional services, to inform the person what the charge would be, on request by the patient, and when the fee would be excess of the normal charge, giving also an indication of the normal charge. Section 6(c) of the National Health Act also said that a health care provider must inform the user of the cost implications for treatment or procedure to be undertaken

Section 53(3)(d) of the Act therefore empowered the HPCSA to determine and publish tariff guidelines. These would be used as the norm in determining and evaluating cases about charges. where there was a complaint by a relative or a patient or the one taking care, about issue of overcharging. The HPCSA had always exercised its responsibility, and although it set an “Ethical Tariff” this was not to be regarded as a target at which the fees could be set. Health practitioners, when utilising the HPCSA Ethical Tariffs, must still follow the provisions of section 53(1)(b) to ensure that the patient was giving informed consent. However, the Ethical Tariffs had not been used by the DoH since the Reference Price List (RPL) was published. Now, however, it had been declared invalid, following a challenge by the Hospital Association, so a new guideline was needed to give medical and dental practitioners clarity and a basis for determining fair and reasonable fees for their services, and to allow the HPCSA to consider complaints about overcharging.

Dr Mjamba-Matshoba submitted that the Guideline Tariffs provided clarity, guidelines and criteria within a contested environment. The ultimate purpose was to ensure an accessible, affordable and sustainable health care system in terms of the Constitution. When setting the guidelines, the HPCSA was mindful of the requirements and stipulations from the Competition Commission, and had consulted with stakeholders and service providers in the profession, in order to ensure a transparent process. It had used the 2006 National Health Reference Price List (NHRPL), determined by the Council for Medical Schemes in conjunction with the Department of Health, as a baseline and added an inflator of 46.6% until 2012. Although it was not legally obliged to do so, HPCSA had also consulted with the South African Medical Association (SAMA), the Board of Healthcare Funders (BHF), the DoH, Discovery Health, the Compensation Fund, and the Council for Medical Schemes (CMS). He noted that practitioners were not bound absolutely to the Guide and may charge above what was suggested, provided that they obtained an informed consent from the patient, client or next of kin. She stressed again that practitioners must inform their patients of the cost of treatment prior to rendering any services.

The guideline tariffs would be applicable once published in the Government Gazette. This had originally been intended for 17 August 2012, but had been postponed, pending further deliberations by the HPCSA on 3 September.  All patients on medical aid schemes needed to familiarise themselves with the options and benefits from their medical aid scheme, and ask practitioners, upfront, what would be charged. Practitioners had to ensure that patients and clients were fully informed of fees, obtain their consent, having used language understandable to the client. They may set their own fees, as set out already. They had to give written evidence of their specific fee, as well as the HPCSA Guideline Tariff, and keep records of consent in writing.

The Guideline Tariffs for 2012 would be reviewed regularly in future, and matters raised by all identified stakeholders would be taken into account. Any new tariff codes could also be incorporated into the Guidelines.  process would be undertaken whereby new tariff codes would be included in the existing Guidelines.

The Chairperson commented that some health service providers felt that the Guidelines were not helpful. The Competition Commission was good for other industries but he was not sure it was good for the health profession.

South African Medical Association (SAMA) briefing
Members complained that they did not have hard copies of the presentation, and SAMA agreed that these would be sent to them.

Dr Mark Sonderup, Acting Chairperson, SAMA, noted that SAMA was an organisation of groups comprising mostly doctors. It was a section 21 company and a registered trade union, with a membership of over 17 000 doctors from both the public and private sectors in South Africa.

SAMA had, over the last 60 years, produced a Doctors Billing Manual (DBM), which was a booklet of codes firstly published in 1944 and updated annually. The DBM represented the code of practice of a medical practitioner. The current format of the tariffs was first created in 1975, and included coding practice. SAMA  acted as a neutral referee and maintained a balance between the disciplines. DBM was recognised in various quarters as an industry standard.

He gave some background to tariffs, noting that until about 1978 the SAMA and Representative Association of Medical Schemes (RAMS) rates had been more or less on par. However, RAMS was then replaced by the Board of Healthcare Funders (BHF). BHF then set a rate of what the medical aid schemes were willing to pay for a given procedure or code. However, SAMA had its own rates, published in the DBM.

The 2003 ruling by the Competition Commission that the setting of a tariff was anti-competitive was problematic. The tariff was then replaced by the National Health Reference Price List (NHRPL), from 2006, and this had been based on the codes used in the SAMA DBM. This was challenged in 2010, resulting in the 2006 NFRPL being overturned. One problem was that there was a view that the NHRPL was not properly based, and particularly did not incorporate practice cost studies. He pointed out that a person running a medical practice had to employ receptionists and nurses, as well as factoring in equipment costs and other overheads. SAMA wanted to make the point that this was also a challenge in the guideline that HPCSA had brought forward.

SAMA had been asked to meet with the Ombudsman and had submitted written tariff guidelines proposals to the HPCSA in July 2010. At both stages, it stressed the importance of using the DBM current tariff codes as a benchmark, and the need to include all outstanding tariffs and codes. It noted that the 2012 DBM contained a whole range of altered codes that were not included in the 2006 NHRPL. It requested a single conversion factor, and a relative value unit (RVU) would allow for a balance across the disciplines.

Dr Sonderup said that a discussion about tariffs had to consider also the cost of private health care. Medical schemes costs, since 1990, had to be seen in relation to the average Consumer Price Index inflation. He cited that an average contribution, per beneficiary, per month, in 1981, would have been R11.73. If CPI inflation was used, the same contribution in 2010 would be R168. However, in reality, the costs had risen to R975. A large portion of that went to hospitals, a little to general practitioners, some to specialists, but a lot also to non-healthcare costs, such as administration costs, managed care costs, broker fees, and the actual cost of delivering healthcare. The most significant change came in 1997, with the introduction of the US concept of managed healthcare, which was created to try to lower and contain costs in the private healthcare sector. However, this had unintended consequences, as business administrators often provided managed healthcare services, and this merely added another layer of administrative costs, with questionable benefits, and yet another rise in non-healthcare portions. The actual rise to health costs was outstripped by this administration – with increases in hospitalisation costs being 22%, increases in medical specialists at 7%, the costs for GPs dropping by 40%, costs of medicines dropping by 42%, and non-healthcare increasing 75%.

Brokers, over the period of time, had cost over R8 billion, and this was not actually bringing value to healthcare. Very few new members were attracted, and healthcare costs had not dropped. Administration and hospitals were the most significant costs. However, there were also significant overhead costs to run a modern medical practice.

SAMA pointed out that when it had last published a tariff for consultation, in 2003, it had fixed a fee of R266.70. However, the HPCSA calculation resulted in a figure that was actually 5% less than that 2003 tariff, whilst the medical scheme costs had increased by 105%. SAMA said that in the years between 2003 and 2012 there had been a real increase in overhead costs of 62%. Whilst SAMA believed that a benchmark tariff was a good concept, as it would provide much stability and a framework, and would certainly be required under the NHI. However, it stressed that the benchmarks must be based on actual costs, and should include tiered tariffs. Once again, it urged the HPCSA to consider using the DBM as a standard. It also urged Parliament to assist it in attempting to get an exemption for the medical profession from the Competition Commission ruling.

He outlined a proposal to have a pricing commission, which would have multi-disciplinary membership and input, to discuss tariffs.

SA Dental Association (SADA) briefing(PPT, no documents)
Ms Maretha Smit, Representative, South African Dental Association, noted that the Dental Association (SADA) had not been formally invited, and the Chairperson apologised for this oversight.

Ms Smit said that SADA represented about 80% of dentists in private practice in South Africa. There was an exit rate of 40% from the profession in South Africa. There was a high incidence of depression in the profession. Oral health was perceived as not life-threatening and therefore was not a funding priority. There was exceptionally low acknowledgement from patients about the incredibly high cost in private dental practice. There had been a reduction of contributions by medical aid schemes, from about 8.4% in the late 1990s to about 2.4% currently. There was little consumer awareness and low access of consumers therefore to oral health care.

She stressed that oral health was an essential component of general health. There were severe implications of oral manifestations for HIV and AIDS sufferers. There was growing evidence of the association between periodontal disease and other general diseases, and there was a huge increase in oral cancer especially in the younger population. Physical injuries to the head and neck area were clearly visible during oral examination. It was therefore vital to include oral health practitioners in all discussions on guidelines. SADA felt that its right to fair administrative justice was otherwise threatened.

SADA’s main concerns about the guidelines were, firstly, that the HPCSA could not publish tariffs, as that was within the remit of the DoH. It believed that this was also in contravention of the Competitions Act. Whilst she noted that the Ethical Tariff was said to be a conditional target, the indications were that it was not treated as such. Medical inflation was considerably higher than consumer inflation. The basis used to prepare the guidelines was substantially flawed. The guidelines were not reflective of any reasonable cost, being based on the 2006 RPL, which was, at that time, related to medical scheme benefits rather than to proper consideration of professional fees. The guidelines were 40% less than the fees approved in 2006.

The issue of informed consent had been emphasised, but SADA felt that this was actually not an issue at all.  The resistance came from the introduction of guideline tariffs in the market that drove the discussion. SADA would rather see the informed consent discussion “from zero base” rather than having an unreasonable basis that ended up where medical services were bartered over, like a box of tomatoes. If there was no understanding of what actually drove the costs in dentistry, then it was not possible to provide for a fee structure that would enable the dental practitioners to provide the best patient services.

The Chairperson commented that all those making submissions seemed to agree that some form of standards were necessary so that those people who were overcharging could be regulated.

South African Private Practitioners Forum (SAPPF) briefing
Dr Chris Archer, Chief Executive Officer, SAPFF, noted that prior to medical aid schemes, doctors billed patients according to their ability to pay, and payments for services were often erratic. The first medical scheme in the country was established by a group of doctors, as a contribution towards their medical expenditure. From that grew the notion of two tariffs, a tariff of fees and a tariff of benefits. Medical schemes paid their members, who were then expected to pay their doctor, but this often did not happen. An amendment to the Medical Schemes Act (MSA) of 1985 was introduced, in terms of which a doctor would be guaranteed payment, only to the extent to which the scheme was prepared to reimburse. At that time there was a discount of about 20% between the MSA rate, and the scale of benefits published annually in the Government Gazette. Doctors were able to choose whether to be contracted in or out.

He quoted from the South African Medical Journal of 1985, which said that the philosophy underlying the legislation was that the Medical Aid Schemes Association (MASA) should be free to set its own tariffs, and that RAMS should enjoy the same freedom with respect to the Scale of Benefits, but that those  tariffs would be set at a reasonable level, in accordance with the fees charged by the majority of doctors.

Direct guaranteed payments prevailed until 1992, when the relevant section 29 was removed from the MSA, and at about the same time RAMS was replaced by a voluntary association, BHF. The scale of benefits was no longer published in the Government Gazette.

The increasing tension between providers and funders, due to the increasing disparity between fees charged and benefits paid, resulted in the intervention by the Competition Commission in 2003. SAMA, HASA and BHF were fined for acting collusively, and the NHRPL was introduced. The SAMA private tariff became the HPCSA Ethical Price List, but there was a huge disparity between SAMA rates and the medical aid rates. On 24 November 2008 the HPCSA announced the scrapping of the Ethical Price List in favour of the NHRPL rate. SAPPF understood that because the NHRPL was never formally introduced, the Ethical Price List was still in existence.

Dr Archer pointed out that in 2007 the DoH had taken over the development of the NHRPL, which became known as the RPL. It was significant that the regulations around development of that RPL specified that input costs were to be made explicit, and practice costs must be taken into consideration when formulating an appropriate fee. In 2009, the RPL was R12.56, but the cost studies mandated by the Rand Conversion Factor process showed that for a GP, this figure should be approximately R18.25, and for neurosurgeons would be R28.70.

That disparity led to an arguments that ultimately resulted in the demise of the RPL. DoH had clearly failed to adhere to the relevant regulations, and that led to the challenge against the RPL. The judge, in the case of Hospital Association of South Africa v Minister of Health, stated that “the fact that the 2009 RPL reflected rates that were unreasonably low meant that private sector providers would continue to struggle to cover their cost,..a burden many of them had carried for a number of years.”

When SAMA last published its guide to billing, which included the Rand Conversion Factor, there was about a threefold difference between the RCF and the BHF tariff schedules. Inflation meant that in 1968 the medical aid tariff was worth three times what it was worth now, in respect of procedures, and twice its current worth for consultations, which was an untenable situation. The SAMA schedule of fees, which did incorporate cost studies, produced a similar RCF.

Dr Archer stressed that it was completely inappropriate to use a benefit schedule as a fee schedule, since benefit schedules had historically always been lower than fee schedules. Many providers had been bullied by schemes who said that direct payments would be conditional on them charging no more than the scheme was prepared to pay. Many doctors were forced to accept this, and not cover their costs properly. Fees schedules had always included codes for services that would not necessarily be covered by a medical scheme’s benefit schedule.

Dr Archer suggested that an equitable schedule of fees and benefits must satisfy the requirements of affordability, availability and quality. Quality was an essential component. SAPPF believed that, to date, too much attention had been focused on the affordability of health care services, without equal attention being paid by funders and regulators to the ability of doctors’ practices not only to survive, but also to provide a quality service. He did not believe that it was impossible to create a coding and tariff system that was morally defendable, socially responsible and economically sustainable. However, the HPCSA tariff now proposed was procedurally unfair and unreasonable. SAPPF was not consulted on it, and it did not believe that the costs of providing the service were taken into consideration. Furthermore, it was concerned that the numerous codes for procedures developed since 2006 were not incorporated.  

Dr Archer cautioned that there would be potentially negative consequences if the proposed Guideline Tariffs were adopted. Firstly, the service providers would not be able to cover their costs. An inappropriately low tariff would be a disincentive to the entrance into the healthcare market, and existing doctors would leave the profession, thus making health services less accessible, with lower standards of care. South Africa deserved a legally acceptable process allowing all stakeholders to participate in a transparent bargaining chamber process to develop equitable fees for medical services. This could not be said of the process that HPCSA had adopted so far.

SAPPF supported the Minister of Health’s intention to have a Pricing Commission.

The Chairperson asked about the relationship between SAPPF and SAMA. He noted that all presenters agreed on the need for some tariff, but noted that additional items must be incorporated.

Board of Healthcare Funders (BHF) briefing
A representative from the BHF spoke about the coding schedule and the extent to which  there had been development of the codes of practice. He disagreed with the assertion that the coding had been manipulated. He noted that, historically, there had been negotiations between SAMA and BHF. However, when SAMA did not succeed in having the tariffs increased as suggested, it had begun to “manipulate” the coding. For instance, he noted that the medical schemes would be prepared to reimburse for a hip replacements. However, in practice, the orthopaedic surgeon claimed that a hip replacement was not covered by that code, and would charge also under three other codes. He cautioned that such instances meant that overnight, medical practitioners managed to double their revenue without doubling of their efforts.

In 2004, legislation was introduced regarding the dispensing fee, and gynaecologists, fearing a loss of revenue, introduced a new coding structure that would ensure that revenue was maintained, and introduced a certain type of facility fee, which allowed them to charge a facility code when giving tablets or injections, costing over R400 at that time. The whole reason for the codes was to undermine the dispensing fee legislation.

Other examples could be provided. Pathologists complained that the tariff guide was too low, although he felt that they were actually being paid too much. Human behaviour was such that the practitioners would automatically try to default to the code that allowed for the most. For instance, the real cost of the most common blood test was under R25, but the guidelines were claiming R150 or R160.

BHF was of the view that the HPCSA proposal was a starting point. Service providers may not be happy with the prices, and BHF was not happy with the coding structure, which it felt was being manipulated to maximise revenue. He thought that there had to be further engagement under the HPCSA umbrella, and said that the Competition Commission anomalies were something that could be dealt with in the future. BHF was, however, concerned that whilst HPCSA had chosen the 2006 coding structure as a starting point, SAMA was wanting to use the 2012 tariffs. He felt that the 2012 SAMA tariffs had been greatly manipulated. They had attempted to bring in the CPD procedural coding system of the United States, and was concerned about the future implications of that. The DoH had engaged one of the research institutions to look into a national procedure for coding South Africa, but in the meantime BHF felt that the 2006 coding structure was more appropriate.

BHF noted the comments of professional bodies about the costing. He noted that he had a particular interest in evidence-based research into medicine and public health, quality assurance, and research methodology. He regarded the cost studies put forward as an excellent example of badly-conducted research, and urged that these results could not be used to make policy. He acknowledged that in some areas, the costs taken into account were inadequate, but there had to be further debate to find the appropriate levels of remuneration. Part of that debate had to look at the value that was provided. He noted that there was some exceptionally good work being published in the research journals, and specialist care, but there was a lot lacking in basic care.

Discussion
The Chairperson remarked that Members represented their communities, most of whom were poor. Whilst it was accepted that service providers deserved to be paid for certain procedures, this should not rise to the levels of exploitation.

Ms Segale-Diswai asked that Members receive hard copies of the presentations where those were not provided; there was much for discussion.

Ms Segale-Diswai asked about the relationship and communication between the entities.

Ms Segale-Diswai commented that the HPCSA document was too complicated, and the various requirements around consultation were too complex and did not cater to the ordinary person who was provided with medical aid by his or her employer. She was not sure that this Committee would be able to reach a solution, and clearly Members had to go through the documents in more detail.

The Chairperson said it was not for the Committee to make recommendations. Somebody had to regulate this area, and all presenters agreed on the need to have some tariffs. However, those tariffs must be honest, and not be driven by profit. There was a need to assist people to get better when they were ill, and therefore everyone had to agree on what would be in the best interests of the country as a whole. He appreciated that the HPCSA had come up with some standards, but these must take into account what the professionals also needed to survive. He reminded everyone that the people who were most affected – ordinary people on the street – were not present at these discussions. The discussions were very technical.

Ms Dube aligned herself with comments by Ms Segale-Diswai, and said that she had consistently argued that a person entering hospital should not automatically be taken to the Intensive Care Unit for relatively minor ailments, such as asthma, high blood pressure or high cholesterol. People were also abusing medical aid schemes. As a result, many people were reluctant to go to hospital, even if they needed, because of exorbitant costs. Instead, they resorted to traditional healers. There were instances where one practitioner might charge R5 000 upfront, whereas another, with exactly the same qualifications, would offer medical aid rates and charge R350 for the same procedure. She urged that everyone had to work together.

The Chairperson agreed that tariffs were a necessity, but the challenge was how much these should be . Another meeting would be needed to debate the issue. Tariffs must be geared to affordability for patients, as well as not compromising the practitioner, but it was also necessary to guard against abuse.

Ms T Kenye (ANC) asked for clarity on why the Ethical Price List was scrapped in 2008. She also wondered what was to happen with the NHI Tariff Guidelines.

Ms Kenye asked how the ombudsman was dealing with matters.

Ms Kenye asked if there were any awareness programmes, particularly in the rural areas, to allow people to understand the tariffs. Private hospitals simply seemed to be geared to making money, and she cited an instance of them being keen to perform procedures such as caesareans when this was not strictly necessary.

The Chairperson emphasised again that a person providing services must be properly compensated. However, the main bone of contention was that there were abuses by the unscrupulous elements in the profession, and the whole reason behind the tariffs was the number of complaints to the ombudsman about charges. However, service providers felt that the tariffs were too low.

Ms Robinson said it was difficult for Members to ask meaningful questions without going into anecdotal stories. She said that hard copies of the presentations were needed, as well as the Researchers’ analysis.
Whilst there may be unscrupulous doctors or dentists who tried to make a lot of money, the majority of healthcare practitioners were good, honest, hard working and caring people. It was understood that finances for all were tight.  She knew of a hard working and honest doctor who had said that she either had to spend significant time on administration, and neglect the consultations and care, or employ more staff to attend to that administration, such as codings. She agreed on the need for another meeting, once Members had had time to consider all documents and any new information.

Ms Robinson commented that the NHI was some way away, and the Committee must be aware of the need to make medical services available at a more affordable rate. However, in the absence of proper costings, and given poor infrastructure, this could not be implemented right away. She cautioned that the public and private sectors should not be in conflict and said a win-win situation could be achieved by private sector doctors assisting the public sector.

Ms Kopane noted that HPCSA had claimed that there was consultation with the different stakeholder organisations, but on different days, and wondered if the opportunity was given to have all people present at once, as this would have assisted the understanding. She felt that a guideline was needed, and urged all stakeholders to work on reaching a solution. Legal actions were not helpful.

The Chairperson suggested that perhaps an independent body, which was also South African, must be asked to do research as to how much a GP could reasonably charge.

Dr Archer wanted to give some context and said that nobody was objecting to having a guideline tariff, or about the need to communicate with patients about costs. The Registrar and the Ombudsman advised that in this year there had been about 246 complaints of overcharging. However, this must be considered against the number of practitioners. There were about 20 000 practitioners, each providing on average ten episodes of service per day. That amounted to 4 million service incidents per month, or 36 million so far in the year. He really thought that 246 cases for complaint, out of 36 million cases overall, was not significant. He agreed that where there were instances of abuse, this must be stopped, and doctors who tried to abuse systems were not needed in the profession.

He noted that the private sector was being lambasted about the high cost of care. Private health care cost its members about R14 000 per head per annum. However, this must be compared to the UK National Health system, which cost about R25 000 per head per annum, whilst New Zealand and Australia were also between R24 000 and R26 000 per head. That showed that the private healthcare was actually not high in comparison with other public healthcare systems.

Dr Archer noted, in response to Ms Dube, that he had been in practice since 1972, but not once had he seen one instance of a private hospital requesting a caesarean to increase its revenue. He felt those allegations were without substance.

Ms Dube responded that this was not without substance and said Members were community leaders, and saw abuses happening daily.

The Chairperson said a solution had to be found. He suggested that the Parliamentary Researchers be asked to do some more research. He noted also that whilst it was useful to benchmark costs with other countries, it must be remembered that the conditions were not the same and the South African illiteracy and unemployment must be taken into consideration.

Members agreed that independent research would be useful.

An observer suggested that the tariff should come, in line with the National Health Act, from the DoH.

Dr Marmol Stoltz, Representative, SAMA, commented that the main emphasis in the public sector in South Africa was on primary health care, but in the private sector, the emphasis was on tertiary care. Costs would drop if the emphasis was on primary healthcare. Many GPs and dentists were leaving South Africa, however, because of this emphasis. SAMA had consulted with an independent consultant, to develop a calculator that would allow doctors in practice to calculate the costs of each individual practice, and from that, a proper  scientific practice cost calculator was drawn for the profession. The guidelines suggested did not result from guesswork, nor from a lack of professionalism. The guideline was available online. It was indeed important to negotiate together on all issues. SAMA stressed that healthcare was a unique environment and it was not appropriate to apply the same Competition Commission rulings to this sector as to the trade sector.

The Chairperson said managed healthcare had also to be looked at. He said that the Committee was working with the Department in relation to the Competition Commission and agreed that health was not a commodity, and people should not have to shop around for a cheaper doctor.

Dr Sonderup urged that if must be understood that clear principles must underpin the benchmark and it was not to be centred on profit considerations. He said that he had raised the point of the NHI, and wanted to stress that expenditure on private hospitals in South Africa, in 2010, was about R35 billion. The public sector got R280 million for hospitals. For the last decade, the uniform payment fee schedule (UPF) in the public sector had been outdated and poorly-based, and this was one of the reasons why the whole sector was under-capacitated. More could have been done if the billing had been corrected. The issue of tariffs was relevant to the public sector and the NHI, as proper codes and tariffs would be needed to build properly, as a provider of care, into the future.

Dr Sonderup wanted to stress that rigorous processes had been followed in SAMA around tariffs. The various associations brought their issues and codes and went through a peer review mechanism, leading to proper self-regulation. Many professions had the right to self-regulation, and any problems with the codes being abused would have come out in the process, had they happened. Those examples that BHP quoted may be from groupings that were not being regulated.

Dr Abdyl Barday, Ombudsman, HPCSA, also noted that HPCSA had initially noted that there were about 200 to 300 codes, but also understood that new codes had to be considered, in respect of new methods of treatment and new technologies. HPCSA would look at those, interrogating each to consider whether it was fair. He noted that tariffs were only one of the issues that the Ombudsman handled. He also clarified that the 246 complaints cited were those in which there had been files officially opened or that were being mediated. In addition to that about another 250 had been received that were able to be informally settled. He noted that about half of the 20 000 doctors were in private practice, and most of the complaints related to private sector charges. He agreed fully with the need to have more debates and discussions.

Dr Mjamba-Matshoba said his experience in the industry was that whenever the funders, the providers, the and the private hospitals had to deal with matters, they tended to ascribe blame to each other, as each tried to defend their own positions without thinking of the need to move forward. Whether the tariffs were set by the HPCSA or the DoH, more aggressive leadership was needed, from a neutral party, to bring all three sectors, not forgetting the consumers as well, to arrive at a correct decision that would benefit the country as a whole, not a particular interest grouping. He suggested that the neutral party should be the DoH.

Dr Mjamba-Matshoba heard the arguments about the Competition Commission, and believed it should be involved also in the debate. If the Competition Commission ruling was set aside, it would open up a huge avenue of opportunities, including a neutral party perhaps commissioning the necessary research. The procedure codes should come from the DoH, because those codes influenced what would be paid.

Prof Sam Mokgokong, President, HPCSA, cautioned that the Committee should not be led to believe that the DoH was necessarily neutral. In 2006 the HPCSA had to threaten the DoH with legal action before it had set up the regulations guiding the NHRLP process. In 2007, the HPCSA had to do studies on its own, and he pointed out that the DoH had actually failed to adhere properly to its own regulations. He agreed however that transparency, fairness, and reasonableness were needed. Every doctor in this country was entitled to earn a reasonable and honest living, and must be compensated for the costs that he or she had invested in the practice.

Mr Ian van der Merwe, Chief Financial Officer, DoH, noted that the Minister of Health had delegated powers in respect of the tariffs to the Director General, and he pointed out that one of the points made by the court was that this was ultra vires. He agreed that the Council for Medical Schemes had published a way in which the NHRPL should be established. The DoH had attempted to take over that process. In the first year,  the idea was to use the RPL but the profession indicated that it did not like that, and instead wanted DoH to publish regulations. This had been a replication of the methods and costing. The practice cost studies were a true reflection of the costs of the profession, although he conceded that this was done as a desktop study, rather than officials going out individually. The number of people responding to the questionnaire on practice cost studies was not necessarily reflective of the number of people actually practicing each discipline, and he agreed that this was a challenge. Secondly, a private company had been contracted to consult on practice costs and this noted that in many cases, the practices were not in fact running all the equipment that they claimed to have, so the costs claimed were not necessarily the real costs.

Mr van der Merwe noted that the HPCSA was in a difficult position, as it received complaints every day about over billing by providers. The tariffs were not perfect, but were a start, and he suggested that HPCSA could adjust them, year on year. The final responsibility for health in both public and private sectors lay with the Minister, who had the power to make the final determination.

The Chairperson commented that leadership was about not abuse of a power.

Ms Matsoso added that determination of tariffs was a huge task and the DoH did not have the capacity.  A lot of money was spent on this in the profession. When the tariffs had rested with the Council for Medical Schemes there had been some progress on the process.

The Chairperson noted that the DoH had not previously held real consultation with the private healthcare sector, was now trying to do so, and he urged that this process continue. He thanked the DoH for postponing the gazetting of the tariffs and said it was clear that more consultation was needed with private healthcare professionals. He also urged HPCSA to apply its minds to bettering the lives of South Africans, not to be arrogant and to listen and understand that each part of the healthcare profession could not continue without the other. The main interest was to ensure that South Africans had a prolonged life expectancy.

The meeting was adjourned.