Fraud, waste and abuse litter the South African healthcare sector landscape, with 11% of the Covid spend alone – R14.8bn of R138bn – being probed by the Special Investigating Unit (SIU), and the Council for Medical Schemes (CMS) estimating that the sector loses R22bn-R28bn a year to these needless costs.
Not only do 15% of claims include some element of fraud, waste and abuse, but brokers also swallow a fortune, “sitting on a bench and doing nothing” yet costing the industry R2.5bn a year, according to MediCheck founder Mark Hyman speaking at the recent Board of Healthcare Funders conference in Cape Town
Andy Mothibi, head of the SIU, cited the Organisation for Economic Co-operation & Development (OECD) estimate that 45% of global citizens believe the health sector to be “corrupt or very corrupt”, reports BusinessLIVE.
The OECD says that globally, 1.6% of annual deaths in children under five – about 140 000 – can be attributed to fraud and corruption.
Mothibi, who chairs the Health Sector Anti-Corruption Forum, established at the Presidential Health Summit in 2018, and who is part of the national anti-corruption strategy, said his unit’s high-priority investigations were part of preparations for universal health care.
“For the NHI (National Health Insurance) to be successful it must be implemented simultaneously with an equal improvement programme,” he said.
Actuary Gregory Whittaker said potential litigation payouts in the public healthcare sector, as of March, totalled R109.7bn, with annual claim payments averaging R2bn.
The private sector quantum is unknown but annual rates for occurrence-based cover for obstetricians/gynaecologists has increased tenfold, he said, from R109 240 in 2009 to R1m in 2019, because of litigation.
He listed the top reasons for fraud, waste and abuse as:
• Over-servicing and duplication in medical services;
• Procurement and purchasing irregularities (R138bn spent on Covid, R14.8bn under investigation by the SIU);
• Registration and accreditation irregularities (one in 10 medical products in developing countries is substandard or falsified);
• Collusion (state attorney and claimants);
• Medico-legal fraudulent and over-settled claims;
• Overpricing of services and products; and
• Public sector healthcare workers working in the private sector without permission.
Mothibi said the Auditor-General estimated unauthorised, irregular, fruitless and wasteful expenditure for nine provincial Health Departments at R11.1bn to the end of March 2019, while the CMS’ 15% of (fraudulent, wasteful and abusive) claims came to R27.9bn in 2019.
He listed fictitious medical claims related to doctor negligence in public hospitals, procurement irregularities, counterfeit medicine and medical devices, unregistered practitioners, price fixing, issuing of medical waste disposal contracts to unqualified companies and fraudulent billing, among the fraud or waste.
And on the subject of brokers, Hyman said they take commissions, often “without lifting a finger” to help medical aid members, surveys showing that most members never hear from them.
Broker commissions in 2021 totalled R2.52bn.
“A broker with 500 clients earns R63 930 a month. It allows a broker who never sees his client to sit on a beach and enjoy a wonderful life with a passive income,” he said.
Hyman knows of one scheme that received more than 120 000 calls a day. “How much of that could be resolved if brokers were doing their jobs?”
BusinessLIVE article – Dirty tricks fuel soaring medical costs (Restricted access)
See more from MedicalBrief archives:
SIU calls for tougher sanctions for health industry fraud
SIU probes health-related fraud worth billions
SIU probe into fraudulent PPE contracts now exceeds R14bn