Martin Young
Martin Young

Why should you be concerned if your doctor is a ‘designated service provider’?

You probably haven't a clue. Clearly I think you should be, for good reason, because there is a monumental battle going on between medical professionals and the medical aid administrators who sign contracts with 'designated service providers' or 'preferred providers' (DSPs).

This battle is essentially for control of private medical practice. Those who control the profession control all aspects of healthcare delivery. You, the patient, are the prize. It's messy and unpleasant, with casualties in abundance. As in any war, most casualties are not even protagonists. They are 'you' – the innocent healthcare consumer.

My prior posts have explained in depth the reasons for this conflict. To summarise, doctors' services are undervalued by medical aids (especially in comparison to medical administrators' services) and there are intensive efforts to keep these services to a price that is acceptable to them alone. That these fees are unacceptably low and encourage overservicing does not appear to be of concern to the medical aids whose highly profitable business models apply little apparent incentive to change their modus operandi.

From doctors' perspectives, we've done our homework. We know what it costs to run high quality medical practices, and what we should expect as fair remuneration based on our time spent training, lost opportunity costs, and the nature and responsibility of our jobs. Appropriate fees have been independently assessed by actuarial analysis, and found to be significantly higher than those suggested by medical aids. Our slate is clean in this regard.

DSPs are doctors who have signed contracts to agree to stick to a fee structure and to limit treatment options to those determined by the medical aid. These include drug formularies, limitations on investigations, restrictions on treatment options, use of preferred surgical prostheses and not others, use of certain hospitals and more, prompting the HPCSA in March 2013 to publish a press release warning against actions of this nature that could be prejudicial to patients' interests.

A DSP agreement when carefully examined is about control of a doctor's practice, not based on quality, but on cost. A hallmark of any noble profession is the right to control itself – remove that, and one might as well not call it a profession, but rather a 'trade.' The stakes are that high!

All independent organisations representing doctors interests – South African Medical Association (SAMA), South African Private Practitioners Forum (SAPPF) and others – have warned their members by circular notices to be wary of these contracts.

It is hard to see things in any way other than that your DSP has agreed, essentially, to limit your treatment to what your medical aid has decided is best for you. Your membership of a medical aid plan that demands you see a DSP doctor limits your access to a range of options of care unless you are prepared to pay for them in full over and above your medical aid subscriptions. Another problem is the DSP doctor may not even offer alternative treatment options which are not included in the medical aid's list. If your GP is a DSP, he/she is limited in referring you to specialists working at DSP hospitals, for all but extreme emergencies.

What does a doctor gain by becoming a DSP? The main benefits are a guarantee of direct payment by the medical aid at a rate marginally higher than non-DSP doctors are paid by the same medical aids, and a preferred supply of patients. It gives the DSP doctor a competitive edge in an environment where skill and quality of care are not considered, to the extent that some analysts have considered the system to be anti-competitive in nature. If all doctors in an area are forced into becoming DSPs to compete, medical aids have in essence controlled the market place by removing competition, and removing patients' options. The medical aids then control the market place completely, exchanging cost saving for more limited access to healthcare. Good for them – not so much for you. Another aspect of this arrangement is that the medical aids consider a doctor with thirty years of experience is the same 'worth' as one newly qualified. In no other industry or profession is this the case.

 Did I explain all this well enough? A DSP doctor has given up autonomy in exchange for a competitive advantage that he or she does not earn nor display by higher quality of service relative to other doctors. In doing so, he or she has reversed the hard fought gains that organisations like SAMA and SAPPF have achieved in years of effort. On offer to you is a limited range of treatment options, as well as seeing a doctor who may have to do more 'stuff' to you because the consultation fee alone is not fair recompense.

Of course, to test my accusations, you will have to fall sick first. Not the normal, ordinary, 'cough and cold' type of sick, but the 'in danger of being paralysed due to spine compression' type of sick. Or 'seriously ill in ICU' illness. Or the 'severe crippling arthritis that could respond to a brand new drug' kind. Just try having the latest spinal surgery under the care of a DSP orthopaedic surgeon. You'll battle. A non-DSP surgeon will also battle, but will at least try to get the medical aid's approval on your behalf. A DSP surgeon is unlikely even to try, having signed a contract that won't permit it. A DSP's role in being the sole, fully informed and involved advocate for his/her patients, ie you, has been surrendered.

It s difficult for me to believe anything other from these perspectives than that some DSP doctors have sold out to their profession, to their colleagues and last of all to their patients.

One of the cleverest things the medical aid industry has done is to split doctors in this manner into two camps. In so doing they have weakened the most involved advocates that patients have. We really are on your side. Most of us. Your DSP doctor may well be cheaper, but in healthcare, quality is always remembered long after the cost is forgotten.


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    • michael

      Martin, i suspect that like most things the truth lies somewhere in the middle.

    • Martin Young


      I suspect many doctors have signed up without due thought to the implications. Others have been ‘forced’ to do so by their competition signing.

      Even the ‘middle ground’, although I can’t see it, is ultimately bad for consumers.

    • Mr. Direct

      I do not know much about this topic, but is there no legal avenue to have these practices overturned?

      If not in medical terms, then what about the Competition Act, where price fixing and consumer choices are protected? has a section for clarifications and interpretations of the law, might be worth a look…

    • bernpm

      The real issue here is the consumer’s choice between real risk and perceived risk. this is the choice between “insurance” or “no insurance”.
      Looking back at my life and use of the medical profession? Apart form regular glasses updates, I (personally) have had one arm fracture and one hip fracture to attend to and some minor thingies.
      At 77 and having paid from the age of 25, I could have stacked the money away and be rich. Hindsight!
      Insurance companies sell “financial protection against the unexpected”. My premium against my cover for medical, theft, car, name it. .
      They also protect themselves against the “costs of the cover” if/when I need them.

      They also protect themselves against spiraling medical expenses by contracting medical specialists on pre-determined fees, protecting consumers against over-charging. (what does the average consumer know about medical costs?)


    • Momma Cyndi

      Do we really have such a glut of doctors that they resort to becoming Clicks Club Card versions of their profession?

      I struggle to see the benefit of signing into this for any doctor. With those kind of limitations, the doctor may as well just remain as an employee in a public hospital.

    • Isabella van der Westhuizen

      No Martin there is another group of doctors namely those who choose to work in the state sector and serve the vast majority. Our conditions of employment are dramatically improving whilst yours in private practice are deteriorating. Ultimately private practice must be abolished as it is self serving and puts profits before patients. There is no audit of what goes on in private. All my private colleagues are one hundred percent doctors all their patients do well. if they have seen a complication once that is a lot. What errant nonsense.

    • Xivoni

      I have not commented on any of your previous posts, Martin, mostly because I have no knowledge or insight into the medical profession, but I am just going to add my few cents here:

      your assumption that your position and proposed solution is inevitably and unassailably the only one that will benefit the consumer is inherently flawed. If there are no DSPs, no generics, no negotiation on price on behalf of it’s members, no filtering of procedures then surely no medical aid would survive? Consumers will simply be at the mercy of further rampant medical inflation and how many of them would then be able to access anything even close to the (admittedly sometimes flawed) levels of service they can access now?

      Individual consumers cannot meaningfully impact on medical costs. Medical aids can.

      I think the only people who have a clear win in your proposed world are the doctors. You have not convinced me that the consumers would be better off in a world without medical aids, or one where medical aids just play a “ja baas” role to doctors…

    • Martin Young

      Dear Isabella

      I also work in the state sector – I have practiced a perfect model of public private participation for 13 years and have seen the state try to destroy it.

      At one stage I was the only ENT between PE and Swellendam seeing provincial patients. I see and know both sides of the story.

      You assume I don’t.


    • Martin Young

      Dear Isabella again..

      My earlier posts in this forum and your comments here make it clear that we have similar points of view about the flawed nature of private practice.

      I also don’t know where you work, but have to assume you don’t work at Livingstone or any of the other hospitals notoriously ‘under siege’ from poor service delivery. If you have worked in private practice I assume you are qualified to comment. If you haven’t, then you are most likely not.

      Your patients, as a state employed surgeon, have no choice in seeing you. Mine do. It is still a free market economy, even if dysfunctional. I’m saying these ‘choices’ are being forced on both doctors and patients in the guise of ‘cost control’ – where the same medical administrators cannot exercise restraint themselves. My posts collectively make that argument.

      You are right – salaries in state employ are getting better. If you can get a post. A principle specialist in state employ I believe earns an annual packet of around R1.2 million – way more than I do. A top Discovery executive earns that in a month.
      There are thousands of state posts that are unfilled -money constraints again. I would seriously consider a ‘full time’ state post if one existed with LPP.

      I have a possible solution, and will make that the topic of my next healthcare-related post. It will be about the way the ‘new class of medical doctor’ that I wrote about earlier could be identified and supported, and it is all about…

    • Martin Young

      Dear Xivoni

      I hear you. My solution, not yet fully addressed in this forum, goes about empowering consumers/patients and giving them choices. I will post it shortly.

      The present situation via DSPs limits choices to unknowing consumers – maybe brokers don’t tell their clients all the limitations. It would be interesting to get a broker’s perspective.

      I don’t think there would be a free-for-all as you suggest, especially if the profession was peer-controlled as it should be. The control at the moment lies in the wrong hands – with those who have your money in the bank – the medical aids. It’s still your money, but you have little to no control over it either.

      This is by no means a unique situation – the same applies to the USA. It would be worth watching Michael Moore’s SICKO documentary – any decent video store will have it.

    • Brian Joss

      Most people have lost sight of the fact that medical aids are supposed to be non-profit. And the more they can cut cost the more money the director will earn, which is why medaids resort to all these cost-cutting exercises. Screw the patient, no matter how ill he may be – Lous Rhabin

    • Momma Cyndi

      Isabella van der Westhuizen

      I hope to heaven that you are wrong. The idea of not being able to chose my GP doctor but having to take pot-luck at a government facility is just too horrifying to contemplate

    • Isabella van der Westhuizen

      I do not work at Livingstone but my hospital was as much under siege as any in SA. We have however turned the place around and turned it into a thriving centre of research that attracts many foreign doctors who wish to come and be exposed to the huge clinical load we have I also have done a number of locums in private. I have no desire to work there permanently as it is a rat race and survival is all important. I am also not convinced that teh quality of care is better. If I ever had a really major accident I would probably prefer to be cared for at busy government trauma centre than a private hospital. I have no love for Discovery I can assure you. It seems that what we need is a functional National Health Service not more private practice. Private is unsustainable for individual doctors. Principal specialists are now called Head Clinical Units.

    • OneFlew

      ‘Actuarial analysis’ doesn’t determine salaries or justify salary levels.

    • Isabella van der Westhuizen

      Well Momma
      Choosing A GP is a bit like choosing a brand of coffee at the supermarket they are all much of a muchness. The problem is when heaven forbid you become critically sick or need major complex surgery and chemo. Then private is a bit more difficult to negotiate and all our western notions of autonomy an choice become a bit more should I say theoretical. There is no audit in private practice there are no guidelines as to what treatment algorithm is appropriate which prosthesis should be used. It is all up to the good will of a service provider who has another agenda be it as a designated provider or some-one trying to pay the bills to run his/her practice. So decisions are not clear and may not be in your best interest. The state sector is a problem but people who write so glowingly about private are quite naive or perhaps they wish to deliberately mislead like when the marketing people from these big groups go on about how they provide world class health care when they patently do not.

    • Momma Cyndi

      Isabella van der Westhuizen

      I doubt that all doctors are cloned duplicates of each other. If that were true then state medical doctors are the same as private practice doctors.

      Choosing a GP is nothing like choosing coffee on a supermarket shelf. Humans are a lot less generic than you seem to believe. Maybe I have just been tremendously fortunate to have found doctors who are dedicated to medicine and not in it for financial gain.

      My GP is fantastic, she has taken care of our family for more than 20 years. Dr JM’s competence and assurance has brought us through every illness, surgery or crisis. Her knowledge of our medical history has enabled her to anticipate problems before they occur or know which medication is most likely to have adverse reactions. Most of all, we trust her

      I dare say there are the convener belt type of GPs out there but painting them all with the same brush is an insult to those who care

    • Dan

      A requirement for a free market is complete transparency, 100% knowledge. Little if anything fulfils this requirement, but medical services at present are way off. To, for instance, pick a doctor or hospital I would need to know their entire history, have detailed assessments of their performance, completely unbiased information. And I’d have to, when needing major medical care, spend time reading all this unbiased information to decide where to take my emergency. This is why the concept of a free market for something necessary like medical care doesn’t work. It is and always will be a fiction.

      The medical aid administrators are greedy parasites. Member fees go up every year while they pocket ever larger profits.

      For now private medical services are the lesser evil due to government incompetence, but the ultimate goal should be to totally do away with private medical services, and even research, whether it be drugs, equipment or techniques.

    • Zepiel

      @ Momma Cyndi

      Deeply offended that you have preconceived notions about state doctors. Let me at the onset declare that state doctors in the academic and larger hospitals are the best in the country. Any doctor after community service can go into private practice. Being in private practice means nothing. State hospitals are overwhelmed, but still cope due to the excellent doctors. Amongst the senior specialists, the majority of them you see in private practice also work at their local state facility.

      PS: Many senior doctors choose to remain in state hospitals because they are committed to helping poorer patients, enjoy teaching, and making a difference. My wife is such a state doctor. Highly qualified, and happy in the public sector. Its getting much better because of people like herself.

    • Loudly South African

      My own critical experience with a medical aid supports Dr Young in involuntarily applying his “not a cough and cold sick” test.

      When my mother had her second stroke, we phoned her neurosurgeon who said get her in an ambulance to a hospital for treatment as quickly as possible – time is of the essence. By time I reached Linksfield Clinic, her caregiver had called the ambulance and she was in outpatients, ready for a CATscan. Discovery Health refused to authorise the procedure, quibbling whether a hospital’s outsourcing its radiology (but still in the same building) disqualified a member from “hospital plan”. I told the hospital to charge it to my credit card and we could sort out the red tape later (time was of the essence). As it happened a passing senior administrator discharged my mother and readmitted her, by-passing the Discovery Health red tape (I am not sure of the details, but thank you, Linksfield Clinic).

      Whether or not my mother’s subsequent decline and death were due to the delay caused by Discovery Health’s obstruction (and breech of contract) or not is a matter I hope to discuss in person with Adrian Gore one day. Suffice to say that, when I read about Discovery’s good profits I am happy that I switched from them soon after the above incident and am satisfied that no amount of gym or travel discounts will induce me to put my family at risk again.

    • Momma Cyndi


      I have no idea what I said to intimate that state doctors were inferior. I simply stated that I prefer to have one, trusted, known doctor to treat me.

      The very size of the public medical service means that you will get a range of excellent through mediocre and into nafi doctors. Same applies to private medical practice. I simply prefer to choose my own doctor. I believe that paying for it myself entitles me to do so.

      As a matter of curiosity, do you have medical aid?

    • proactive

      …reluctantly to borrow two words from one commentator: GENERALLY to live is a big risk, reducing it requires being healthy, avoiding abusing your health, reducing the medical footprint costs on the whole community- which requires an educated, disciplined and health wise nation in PARTICULAR!

      A none profit NHI would be ideal, but: in our diverse society waiting a whole day in a queue to just see a doctor is a waste- which impatient and productive folks will not accept! To be told when an operation might be possible- not when required- is another death threat!

      The more fortunate ones can at least escape these hurdles and migrate into a better system- bliss! This industry considers us as an insurable commodity- like cars or houses- which includes a profit motive- to all our disgust!

      Even doctors are rating themselves according to input costs plus profit- the “Hippocratic Oath” slightly adapted to……… just and generous to myself first!
      Most humans with above average IQ today are looking at the earning potential first- not their “calling”- to either study medicine or actuarial science. A free world!

      In old socialistic Europe with established NHI’s one is best advised to buy top up insurance- since all governments are driven slowly towards bankruptcy- by voters & politicians. Cuba might ‘have been’ an exception.

      Whatever doctor one selects today- choose one best suited and trusted by you to secure your survival first- never mind contracted in or…

    • Zepiel

      Yes. Hospital plan. Have thankfully never used it, but certainly will should I need to. Not because I don’t rate the academic hospitals. Rather because I would prefer the comfort and ease that private hospitals offer. Ofcourse, the overwhelmed public sector cannot provide such luxury. All a matter of perspective.

    • Momma Cyndi


      Exactly. A doctor who you know and trust along with nurses who are not trying to look after 300% more patients than they should be, in a hospital that is crippled by theft and bad management ….. that is a reasonable thing to want. Not all public hospitals are like that but a damn sight too many are.

    • Mo Haarhoff

      Just out of interest, I hadn’t seen hide nor hair of my broker for 15 years, when I asked Discovery to name one in the town we had just moved to. On the one occasion I rang her, she merely said she was no longer broking for the medical aid. Many patients no longer have access to their initial brokers and make do with the telesales people provided.