Yup. You heard me. When funders and heath economists talk about unnecessary health expenditure it irks me. You, the patient, may not need an operation but there’s a whole bunch of people who do … the surgeon, the anaesthetist, the hospital, the surgical supplier, the drug companies. Your body is a valuable commodity, and in these tough times …

So that word bugs me. I can think of better.

Perhaps I’m being unduly cynical here, but unnecessary medical intervention is a huge concern, estimated by some analysts as being as high as 30% of total health expenditure in the private health sector. How did we get to this place? I’m a surgeon. I know how. Buckle up … it’s an interesting ride, and we’ll be upsetting quite a few people along the way.

The primary reason is that the true worth of a doctor’s services has been considerably undervalued by every organisation with a vested interest in seeing this remain low ie the minister of health, the Council for Medical Schemes, the Health Professions Council of South Africa, the Board of Healthcare Funders and every medical aid in existence. All these organisations represent an attempted level of control either over the behaviour of the medical profession directly or its remuneration. Their uniform belief is that medical services should be remunerated at a rate acceptable to and perhaps set by them. It is no surprise that, in controlling the purse strings, their idea of a fair remuneration rate is both too low and highly unrealistic. Why is this?

The old “medical aid rate” was based on a historic negotiation between doctors and large companies that guaranteed both a ready supply of clients and direct payment in exchange for a discounted rate in the 1970s. While fair at the time, in the ensuing 40+ years that rate has increased at a percentage well below that of medical inflation (14%), and doctors, GPs especially, have seen an average annual decline in income of about 10% per year as a result. Nowadays there is no such thing as a “medical aid rate” — it does not exist, due to a ruling by the Competition Commission. The terms of the original agreements have fallen far behind the reality. But the organisations mentioned above have stuck to the approximate values in the belief that these are “fair”, calling them by another name — the NHRPL or “National Health Reference Price List”.

The truth is, the NHRPL was not, and is not, fair remuneration. The medical profession in private practice in South Africa has done its homework. When asked to produce proof to support demand for higher fees/rates, actuarial practice cost studies were done across the disciplines, supporting the “private rates” charged by many doctors, around three times the old “medical aid rates”, and by default three times the NHRPL. This news was not what the organisations wanted to hear.

Most doctors don’t like having to talk about money to patients. For many it is just much easier to roll with the times, accept the status quo, and agree with whatever tariff the medical aid funders pay. Thus an environment is created where the majority of doctors “accept” below par rates for their services. Medical insurers gleefully argue that the numbers of doctors who sign “designated service provider” agreements are endorsement of the fees they will pay out, but this is certainly not the case.

As a result, many doctors earn fees that have little relationship to their practice costs and expectations of a fair salary ie their “mark up” is very low. Following a simple economic principle, the only way to correct this situation is for the doctor to increase turnover. Surgical procedure fees carry a far higher value than consultation fees, and the best way for a surgeon to increase turnover where consultation fees are inadequate is to operate more.

The total cost of surgery goes way beyond the doctor’s professional fees. Hospitalisation and other costs are usually ten or more times the fees for professional services. Then there are the other unseen costs that patients face — lost productivity, pain and suffering. In cases of complications due to surgery, these costs can be considerable, and on occasion, astronomical. The doctor’s desire to increase income, if exercised unethically, will result in at least a ten-fold increase in cost to the funders.

I have to concede, under a system that rewards time spent in the operating theatre, and penalises time spent outside it, that there is an enormous pressure on surgeons to operate, and the most ethical of mindsets is not infallible, even if the pressure exists at a subliminal level. No doctor can say he or she is immune. The only defence is to show and exercise diligent and accepted protocols for dealing with disease conditions. In brief, if the risks of the disease outweigh the risks of surgery, there is no medical treatment or medical treatment has failed, and the patient knows as much about the pros and cons of surgery as possible and agrees to the surgery, then a surgeon can operate with a clear conscience.

Medical aids will argue that they cannot afford equitable fees for doctors. I find that argument unconvincing considering what medical aids believe they can afford. For example, Discovery several years ago paid out to all consulting doctors (not including radiologists and pathologists who have different practice models) 17% of their total income from members. The same year Discovery paid itself 17% of total member contributions to administer their medical aid ie the same percentage. Discovery had at the time a staff of somewhere about 4 000. At the same time 12 000 to 15 000 medical practices and an estimated 30 000 employees including doctors provided healthcare, day and night, weekday and public holiday to Discovery members for the same amount of money. It is a rough thumbsuck, but, considering Discovery’s market share of about 30%, it would appear that it costs Discovery at least twice as much per employee to administer a member’s account as it costs per doctor and employee to provide a medical service for their members. No Discovery executive I have spoken to over many years has been able to explain this, perhaps because their own R3 million plus salaries would be under threat. More recently, Discovery, under pressure, has reduced the administrative burden figure to about 13%.

The situation as it is is untenable. There is little trust between doctors, medical funders and government. The relationship is acrimonious. The ultimate loser, carrying the cost of it all, is the patient. We doctors have to take an equal share of the blame because we have allowed this to happen.

The solution I believe must come in several stages. The first is proper recognition of the true value of medical services by government, administrators and funders. The second is proper control to weed out crass commercialism within the medical profession, by the professional medical societies themselves, not by HPCSA or medical schemes. This peer review is bound to be difficult and perhaps traumatic, but unless we doctors learn to police ourselves we will have to accept others doing it for us, heaven forbid, like lawyers. The third is the establishment of systems that facilitate and recognise a low quantity, high quality method of medical practice, that enforce patients’ rights to 100% ethical medical care.

I have some ideas, perhaps worthy of mention in a future blog. Whether change is feasible is an arguable point — the bigger medical aids have little incentive to change when they have a business model that is clearly working for them.

Until then, let’s all stop talking about “unnecessary” operations. The system, dysfunctional as it is, has made every operation necessary to someone.

I prefer the term “unwarranted” as in “Sister, here is Mr Jones for his unwarranted spinal fusion”.

Then there is no confusion that Mr Jones is doing his bit for the private medical industry. No one is in any doubt as to who really needs the procedure.

As a choice of word, “unwarranted” describes a sorry situation perfectly.



Martin Young

Martin Young is an ENT surgeon living an idyllic life in Knysna. He is a firm believer that "the unexamined life is not worth living", writes for a hobby and is happy to speak truth to power www.drmartinyoung.com...

Leave a comment