14 May 2012

Social behaviour drives medical costs

Medical costs are, to a large extent, driven by social behaviour, according to Liberty Medical Scheme’s Executive Principal Officer, Andrew Edwards,


The renewed emphasis on Primary Healthcare (PHC) in South Africa as one of the solutions to reducing the huge burden of disease in the country, could, at the same time, make healthcare more accessible to a larger number of people as well as drive down costs across the value chain.

According to Liberty Medical Scheme’s Executive Principal Officer, Andrew Edwards, medical costs are, to a large extent, driven by social behaviour. “For example, it has become common practice for women to opt for a more expensive caesarean birth instead of natural birth. Likewise, people are increasingly side-stepping the general practitioner (GP) by going straight to a specialist for a consultation, all of which is driving up costs.”

“Liberty Medical Scheme’s statistics show that the costs of similar specialist procedures tend to escalate substantially from year to year. Last year, private hospitals accounted for nearly 50% of Liberty Medical Scheme’s expenses, and specialists for 21%, as opposed to only 1% of GPs. It therefore stands to reason that the GP needs to be reinstated as the gatekeeper and healthcare coordinator if we want to effectively manage costs. Members need to be made aware of the role and value of the GP,” says Edwards.

First a GP, then a specialist

As a cost-management measure, already on Liberty Medical Scheme’s lower cost options, members first need to consult a GP who, if necessary, will refer them to a specialist. In addition, Liberty Medical Scheme recently approved its new Efficiency Discount Options (EDOs) in which members who obtain their chronic medicine from the State, receive a discount on their premium.

Edwards says until about 12 years ago, there was a very strict distinction between the GP and specialist – a distinction which was respected by patients. However, the Internet has resulted in many individuals self-diagnosing their own conditions and deciding for themselves when specialist help is needed. In the process, the GP has lost their position as the coordinator and gatekeeper. “A system of proper co-ordination of healthcare by the GP will ensure the best possible outcome for patients, healthcare providers and medical insurers,” he says.

At the same time, the renewed focus on PHC will necessitate the training of more GPs.

GP shortage in SA

Due to the ongoing emigration of doctors, it has been reported that in 2010, South Africa had only 17 801 active GPs. In addition, over the last 20 years, the country’s eight medical schools have only produced approximately 1200 graduate doctors a year. Needless to say, this severely affects the doctor/patient ratio in the country – a situation which requires urgent redress. 

Costs further down the line, for example for hospitalisation, chemo or radio therapy and surgery for a cancer patient, could be curbed via early detection and preventative measures so everybody stands to benefit. “Liberty Medical Scheme’s value-added preventative benefits are built into the risk premium and paid for from the risk pool. “In addition to other various preventative benefits, it encourages women to go for regular mammograms, which, prevents high healthcare utilisation further down the line,” says Edwards.

“A preventative benefit is only a benefit if a member doesn’t have to pay for it, therefore, it should be included in the risk benefits. Going forward, Liberty Medical Scheme plans to encourage the inclusion of even more preventative benefits in the risk benefit pool as it makes economic sense for both the member and the scheme.

“By enhancing their benefits, medical schemes can go some way to furthering the principles of Primary Healthcareas defined by the World Health Organisation, namely universally accessible healthcare that’s socially acceptable, affordable and requires individuals to be more self-reliant with their healthcare needs,” says Edwards.

(Press release from Liberty Medical Scheme, May 2012) 








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