Health minister Aaron Motsoaledi welcomed a report showing that medical aid schemes were racially discriminating against practitioners.
The Institute of Race Relations (IRR) has accused Health Minister Aaron Motsoaledi of using a report into the racial bias of medical aid compliance standards to further his National Health Insurance (NHI) agenda.
The report, compiled by a panel chaired by Advocate Tembeka Ngcukaitobi, concluded that medical aid schemes were unfairly discriminating against black practitioners when investigating fraud, waste, and abuse (FWA) claims.
To reach this conclusion, the independent panel relied on an equation devised by a mathematician with a PhD from the University of Cape Town.
“The risk ratio is a tool we developed to work out the likelihood that a black practitioner would be subjected to an investigation, a finding and a penalty, versus a white practitioner,” explained Ngcukaitobi.
“What we found is that the FWA procedures, for the recovery of moneys allegedly owed, is unfair and violate the right to procedural fairness of individual practitioners,” said Ngcukaitobi.
Minister ‘weaponising’ the report
The report has divided the industry, with some welcoming it and others challenging the methodologies and findings.
Motsoaledi was quick to support the report, but Hermann Pretorious, head of Strategic Communications at the IRR, questioned the minister’s motives for doing so.
“His opposition to ‘two different systems’ of healthcare in South Africa is a naked attempt to justify a single system – the NHI,” he told The Citizen.
He argued that any implication that the government could implement superior oversight of medical schemes was “absurd”. He predicted the NHI would “decimate” freedom of consumer choice.
“The obvious weaponisation of this report and its findings is a blatant and cynical ploy by Minister Motsoaledi to pay little more than lip service to the disgraceful failures of public healthcare under his watch whilst vilifying the most operational and successful part of healthcare in the country,” concluded Pretorious.
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Part of SA’s make-up
Pretorious found little fault with the report’s methodology, suggesting the implied biases were a by-product of South Africa’s racially charged society.
“Given the intensely and coercively racialised nature of South African law and regulatory frameworks within which corporates operate, the practice of racial classification and its various offshoots become visible in practices of various complex entities – in both the public and private sector.”
Pretorius cautioned against assuming corporate compliance standards were infallible, noting how complex licensing had led to the closure of independent pharmacies and how regulators have frustrated attempts to create low-cost pharmaceuticals.
“Neither over-nor under-regulation helps the South African consumer and economy. What is needed is sensible regulation – particularly in the healthcare industry,” said Pretorius.
Report ‘flawed’
The Board of Healthcare Funders (BHF) rejected the report, highlighting that FBW cost medical aid schemes roughly R30 billion each year, losses that were passed on to consumers.
Managing Director Dr Katlego Mothudi said the report was “demonstrably and fundamentally flawed” and would aid fraud if the recommendations were implemented.
Mothudi stated the BHF would not allow the report to distort their work, as they had a “moral imperative” to end exploitation by practitioners, regardless of race.
“The investigation relied on unscientific methods to assign race, using surnames to categorise providers, despite well-documented inaccuracies and lack of scientific validity in this approach,” he stated.
Mothudi explained that patient volumes and exposure bias were not properly considered, nor was the fact that some providers serve a disproportionately large share of scheme members.
“One of the large schemes investigated, which is a member of the BHF, serves a member base that is 91% black, which logically results in a higher rate of member interactions with black providers,” stated the MD.
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Report validates what practitioners have ‘endured for years’
The South African Medical Association (SAMA) explained that they were an active participant in the panel’s work and called for “legislative, regulatory, and operational” reforms.
SAMA wish to see the Council for Medical Schemes (CMS) publish fixed timelines for the report’s implementation within the next 60 days and for the health department to amend the Medical Schemes Act.
“The report validates what many of our members have endured for years: racially skewed targeting, opaque algorithms, and Kafkaesque audit processes,” stated SAMA chair Dr Mvuyisi Mzukwa.
He concurred with Ngcukaitobi’s assertion that algorithms used by medical aids to detect fraud were flawed and that a transparent, independent system should be implemented.
“Our members have a right to fair treatment, regardless of their race, and patients deserve a health system built on equity and accountability,” said Mzukwa.
No racial profiling, says Discovery
Discovery Health was adamant that incidents of potential FWA had legitimate grounds for investigation and that there was no evidence of racial profiling.
The medical scheme giant cited a 2021 version of the same report, which found their systems to be legally sound, and stated that it was considering the possibility of a formal review of the final report.
“We are deeply concerned that the panel’s conclusions are based on flawed methodology, unscientific assumptions, and misinterpretation of complex data,” stated Discovery CEO Dr Ron Whelan.
“We maintain a zero-tolerance stance on any form of racial discrimination and rigorously investigate any such allegations,” Whelan added.
Like the BHP, he warned the report would undermine the fraud prevention efforts of medical aids, risk schemes’ sustainability and jeopardise member contributions.
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