A new proposal guarantees private doctors at least 70% of what they made before the pandemic hit — but it also helps medical aid schemes’ financial risks in the face of mounting coronavirus claims.


Resource details:

Publication title: Strategic response to the COVID-19 pandemic for private medical practices

Author(s): The Progressive Health Forum

Publication date: 20 June 2020

What the proposal is about:

South Africa’s COVID-19 response has drastically reduced the demand for some types of non-emergency medical care. Private medical practices report seeing declines in patient numbers of up to 80%, according to professional associations. These same bodies now fear that unless something is done, these practices will not survive and will lead doctors to either retire or look for work overseas. Struggling practices may also mean that doctors have less time to volunteer their services to the national COVID-19 fight. 

The Progressive Health Forum is a voluntary association of health experts from the private and public sector. In response to this situation among private medical practices, the group has developed a proposal that would guarantee private doctors and specialists at least 70% of what they earned from medical aids in 2019. In exchange for this security, practices agree to be remunerated at 2019 rates for the next two years. There will also be caps on annual payments from medical schemes.

Key take-aways from the proposal:

The framework guarantees private practices a minimum income for 2020 to 2021.

Schemes would agree to pay private practices upfront a guaranteed portion equivalent to 70% of what they billed for in 2019, meaning that monthly claims by practices below this level will be topped up by medical aids. The framework proposes a “global cap” on claims, so there will be  a ceiling to how much medical aid schemes will pay out in total for each of the two years covered by the plan, beginning retroactively from April 2020. After practices reach these caps, they will not be paid for any additional services rendered.

The proposal will come into actual being in the form of service-level agreements between medical aids and private practices. These contracts will likely contain provisions to allow medical aids to investigate any suspicious declines in patient services at any practice that has reached its global cap, however unlikely that is, authors argue.

Any increases in tariffs for private practices’ services will be based on consumer price index increases — not medical inflation, which typically increases at a higher rate.  

The framework guarantees private practices a minimum income for 2020 to 2021.

Caps on payments and prices allow the medical aids to manage two expected financial risks: The rise in COVID-19-related payouts and a resurgence in demand for medical services after the COVID-19 outbreak subsides.

You can find and download a presentation on the proposal and a related memorandum here.

[Please note: Information on the new coronavirus is rapidly changing. Please refer to the department of small business development website for the latest information. Visit www.sacoronavirus.co.za for updates on South Africa’s coronavirus response.]