<\/p>\n
You can also listen to this podcast on iono.fm here.<\/p>\n
DUDUZILE RAMELA: \u00a0Medical aid members are being told contribution increases for 2027 should be anchored at 3.8%, but the Board of Healthcare Funders (BHF) says simply setting a target won\u2019t make healthcare more affordable.<\/p>\n
It argues that rising hospital and specialist costs, along with increased utilisation, need to be tackled if contributions are going to come down.<\/p>\n
So what\u2019s really driving the medical aid affordability crunch and what needs to change?<\/p>\n
BHF managing director Dr Katlego Mothudi joins us for more and to possibly answer that question. Thank you very much, Doc, for your time.<\/p>\n
You\u2019ve consistently called for structural reforms to reduce private healthcare costs. A key intervention, you believe, is enabling collective tariff negotiations between medical schemes and willing healthcare providers within a regulated and transparent framework. What does that mean and what does it look like?<\/p>\n
KATLEGO MOTHUDI: I think the first challenge that we had with the articulation of the proposed increase was the unexplained additional component, which actually turns out to be more significant than the 3.8% that is mentioned.<\/p>\n
We believe, firstly, that the council should maybe spend a bit more time elucidating what is contained in there, what it means by having a relevant adjustment for utilisation.<\/p>\n
Secondly, what we are mentioning are some of the interventions that we think are necessary because just simply explaining what it contains would not help in terms of price reduction.<\/p>\n
We have previously articulated that to bring down healthcare costs we need to consider what is missing structurally, over and above the things that were not implemented when we are considering what social solidarity means, and we include things like mandatory membership and risk equalisation.<\/p>\n
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We also do not go to great lengths to say why healthcare is expensive. Part of the reason is that the industry does not have a tariff. Secondly, the different players do not have a platform to negotiate the tariffs.<\/p>\n
DUDUZILE RAMELA: We\u2019ve been here before. The need for a transparent tariff negotiation framework was identified by the Competition Commission\u2019s Health Market Inquiry in its final report back in 2019. Yet here we sit, seven years later, meaningful tariff reform remains outstanding. What should this tell us?<\/p>\n
KATLEGO MOTHUDI: I think maybe we do not understand what the country needs for reform because for a long time, everything was held back on the premise that we will be rolling out National Health Insurance (NHI), and there was this misperception that it is going to sort out everything.<\/p>\n
Read\/listen:<\/p>\n
Could forcing more South Africans into medical aid make it cheaper?
\nCan mandatory medical scheme membership fix affordability?<\/p>\n
I think that\u2019s where the issue was.<\/p>\n
A lot of the necessary reforms in the medical schemes, and I can quote numerous, for example, the review of the prescribed minimum benefits (PMB), the tariff issues, whether from a tariff file itself or that multilateral negotiations forum.<\/p>\n
Read\/listen:<\/p>\n
Medical aid cover is changing \u2013 are South Africans prepared for the gaps?
\nMedical aid costs: Can prescribed minimum benefit reform bring relief?<\/p>\n
All those have been left out or at least not attempted to be put in because there was this looming very large change that was envisaged.<\/p>\n
DUDUZILE RAMELA: Medical aid schemes could argue, well, global advisory WTW (Willis Towers Watson) 2026 Global Medical Trends survey projects medical costs to increase by 10.3% globally this year, following a projected 10% increase in 2025 for the Middle East and Africa region. So they project an increase of 11.3% and they cover 91 countries.<\/p>\n
So what should this tell us? Because it identifies factors including new medical technologies, pharmaceuticals, utilisation and fraud, waste and abuse among pressures affecting medical costs. So they could very well argue, well, we\u2019re in line [with], if not even better than global trends.<\/p>\n
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KATLEGO MOTHUDI: That is true. We should not look at South Africa in isolation, but it doesn\u2019t mean that we do not have specific requirements or interventions that we could look at or even implement, and I\u2019ve mentioned some of these things.<\/p>\n
One of the other pertinent, issues to look at is the risk pool for the private sector. I\u2019ve mentioned earlier the non-implementation of the other factors of social solidarity, but the other issues are around interventions that have been proposed, for example, the introduction of the low-cost benefit options.<\/p>\n
We estimate that there\u2019s probably about eight to 10 million people who could potentially enter the risk pool. If that should happen, it would actually also affect the cost of the healthcare services.<\/p>\n
The second issue that I\u2019ve touched briefly on is the revision of the prescribed minimum benefits. At the time when it was contemplated, I think early 2000, it was with a view of solving one challenge that was prevalent at the time, where it was not uncommon to be kicked out of hospital, because benefits ran out.<\/p>\n
Read\/listen: Youth opting out of medical aid signals affordability crisis<\/p>\n
So while PMBs were well-meaning, they have now risen from what was a 40% consumption of the budget then, to more than 60%. Now, I think regulation five of the Medical Schemes Act said they should be reviewed every two years.<\/p>\n
That has not happened for over 20 years.<\/p>\n
So while we would like to compare ourselves to, what is happening globally, there are industry specific or even country specific interventions that you could do to still soften the cost pressures.<\/p>\n
DUDUZILE RAMELA: Board of Healthcare Funders managing director, Dr Katlego Mothudi, thank you very much for your time.<\/p>\n
#medical #aid #costs #rising #calls #increases<\/p>\n","protected":false},"excerpt":{"rendered":"
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