The article as I received it is long and technical, so I'm busily trying to summarise it for those - like myself - with lower attention spans. Basically, the government tried to tell private medical practitioners what they could charge. The case has been ongoing since 2007, with doctors' Associations arguing that doctors need to set their own fees to justify the high costs of providing care, medical training, and return on their substantial investments in their careers. The number of doctors leaving South Africa is a major cause for concern, also.
The "arrogant" attitude of senior DoH staff throughout was that "they are there to
govern and not to consult”, and they continued to ignore the detailed studies (7700 pages of evidence) presented to them by their opponents.
The background is as follows:
Department of Health (DoH) attempted to interfere in pricing for private medical services (including Psychiatry, Audiology, Speech Therapy, Optometry, Physiotherapy and Anaesthesiology). The DoH
"introduced a new Regulatory Framework and has been at loggerheads with the Private Sector ever since."according to the report, which comes directly from HealthMan, a privately owned healthcare consultancy.
The DoH ignored all submissions from the various healthcare Associations and produced a
"Reference Price List ( RPL) that is incomplete, did not take into account the costs of private practice and in many instances was irrational."In short, the government set fees to low, and the private sector resorted to legal action to seek redress. Taking on the government was not cheap, and the following summary is taken verbatim from the article:
Summary of JudgementThe DoH "came in for harsh criticism" and refused to comment on the judgment. The following is also quoted verbatim with my emphasis:
The RPL used by medical schemes to determine the rate at which they
will reimburse healthcare providers were declared null and void this
week. This ruling is applicable to the 2008 & 2009 RPL and is
retrospective. Acting Judge Piet Ebersohn found the process by which
the rates were determined to be unfair, unlawful, unreasonable and
irrational. The judge said the process had resulted in tariffs that
were "unreasonably low" - one of the reasons cited for the exodus of
doctors from this country.
The judgment has created a huge vacuum that has the DoH, the CMS,
medical schemes, medical scheme administrators and healthcare
providers pondering as to a way forward. Many medical schemes use the
RPL as the basis for their benefits, and the setting aside of the RPL
could affect their rules that relate to the payment of claims. The
time is now opportune for the Funding Industry to constructively
engage with healthcare professionals and not to fall back on their old
ways of making unilateral decisions without due consultation.
South African Private Practitioners Forum (SAPPF).And,
The SAPPF was one of the lead applicants in the legal challenge
against the DoH. Dr Chris Archer, the chief executive officer of the
SAPPF, said his organisation's key message now was one of
reconciliation with the Department of Health. Archer said a new
methodology for determining guideline tariffs, which would allow
practitioners to earn a reasonable salary and make a reasonable return
on the investments they had made into their practices, needed to be
developed to stop doctors leaving the country. He said practitioners
would be unable to implement the required much higher charges
immediately, because this would bankrupt the funding industry, but a
process that acknowledged the problems needed to be found.
Salient Features From the Judgement.
Unreasonable Low RPL Tariffs.
In his judgment, Ebersohn said "the fact that the 2009 RPL reflected
rates that were unreasonably low meant that private healthcare
providers would continue to struggle to cover their costs (let alone
make a reasonable return on investment). Ultimately, there was the
real risk that the effect of the RPL decision would play out on
patients, who might face the burden of a declining number of doctors
within the country and who might be confronted with general and
specialist practitioners who, in an attempt to make ends meet, would
be forced to focus on a high-volume turnover of patients at the
expense of the quality provision of medical services"
The process used by DoH to determine doctors' costs was flawed.
The RPL that forms the basis of many medical scheme benefits was not
only drawn up in terms of invalid regulations but the process failed
the tests of legality, fairness, reasonableness and rationality.
Much of the court challenge hinged on the practice cost studies that
healthcare providers submitted to the DoH to assist it to determine
the cost of private healthcare services. The department dismissed most
of these studies, claiming they did not meet the required sample sizes
or they used unacceptable costing or coding methodologies. The judge
made the following points in his ruling:
The DoH was, in terms of the National Health Act, supposed to consult
with the National Health Council before promulgating the RPL
regulations. The department had failed to provide any evidence of
these consultations. Neither did the DoH offer any evidence that it
had consulted with the Technical Advisory Committee prior to
publication of the RPL. The Technical Advisory Committee was also a
defendant in the Application, but did not oppose the SAPPF
application. The Judge found this lack of evidence to be far fetched
and clearly utenable.
The then Minister of Health, Manto Tshabalala-Msimang, delegated to
Thami Mseleku, her then director-general, the power to determine the
process of deciding the RPL. This was impermissible, as was many of
the other actions taken by senior staff members of the DoH.
Mseleku decided on the methodology that should be used to determine
the costs of healthcare services. He then admitted that this
methodology was ill-suited to determining costs for providers such as
hospitals and emergency services but failed to deal properly with
proposed alternative methodologies. The publication of a methodology
that he knew was ill-suited was "irrational, unreasonable, and