Crooked doctors, exorbitant overcharging, and procurement irregularities are pushing health costs sky-high, reports TimesLIVE, with as much as 15% of all healthcare claims being affected by fraud, waste and abuse, according to the Special Investigating Unit at the 25th Annual Board of Healthcare Funders conference this week.
The sector is haemorrhaging around R40bn a year through corrupt billing practices, fake healthcare providers and procurement irregularities, and delegates at the Cape Town congress were warned that fraudulent activity is not just inflating healthcare costs but eroding public trust.
Leonard Lekgetho, acting head of the Special Investigating Unit (SIU) and chairperson of the Health Sector Anti-Corruption Forum, said it was increasingly becoming a major challenge, particularly in private healthcare.
“Billions are lost annually, and ultimately, medical scheme members pay the price through higher contributions and reduced benefits,” he added.
Corruption risks identified by the forum included doctors doing remunerative work outside the public service while neglecting their duties in state hospitals, in some cases even taking their private patients into public hospitals for treatment, while other concerns were doctors deliberately referring patients for procedures in public hospitals to shield themselves from medical negligence claims.
Other corruption risks include procurement irregularities within health departments, counterfeit medicines and medical devices, bogus healthcare practitioners, anti-competitive practices like price-fixing, irregular medical waste disposal contracts and fraudulent medical scheme billing.
Lekgetho said common fraud issues include:
• claims for services not rendered;
• billing for brand-name medicines instead of cheaper generics;
• deliberate manipulation of billing codes;
• duplicate claims;
• excessive charging for healthcare services;
• over-servicing patients through unnecessary tests or medication;
• claims submitted on behalf of non-members;
• pharmacies claiming for medicine while dispensing non-medical items; and
• cash-related fraud.
The SIU is currently investigating several major matters, including the Life Esidimeni tragedy, the National Health Laboratory Service (NHLS), the Health Professions Council of South Africa (HPCSA), the Council for Medical Schemes, medico-legal claims, Tembisa Hospital and matters involving the Office of the State Attorney.
The forum has recommended establishing integrated fraud intelligence platforms, real-time information sharing across healthcare stakeholders, greater use of AI and predictive analytics to detect suspicious claims, dedicated anti-fraud task teams, stronger accountability measures, improved public awareness and enhanced whistleblower protection.
Collaborative action
The week-long conference ended with Dr Katlego Mothudi, managing director of the BHF, urging delegates to ensure that the conversations translated into measurable action.
The Competition Commission’s Mapato Ramokgopa said regulators and industry have the same mandate – to improve access to healthcare – using the platform to propose a multilateral negotiation forum to help resolve the long-standing deadlock around tariff determination by bringing providers, funders, regulators and civil society into a single forum.
Ramokgopa also encouraged a more proactive role from the sector in developing value-based care models, arguing that it holds the data and technical expertise to accelerate practical proposals.
On technology, Dr Musa Gumede, CEO and Registrar of the Council for Medical Schemes, said that while regulators support innovation, it must improve quality and access, and go hand-in-hand with accountability and consumer protection.
CEO of the South African Medical Association (SAMA) Dr Mzulungile Nodikida said resolving the impasse around tariff negotiations was central to the long-term sustainability of the sector, while Christoff Raath, Joint CEO of Insight Actuaries & Consultants, grounded the affordability debate in hard numbers.
Prescribed Minimum Benefit (PMB) costs already exceed R1 600 per life per month, meaning the most affordable medical scheme cover for a family of three now exceeds R4 000 per month before any non-health expenditure is considered.
He renewed the call for collaborative technical forums similar to those that previously existed.
Dr Johan Pretorius, co-founder, chairman and CEO of Universal Healthcare, said the current PMB framework has not kept pace with the realities facing the sector, that while PMB costs are highlighted every year, the framework itself has not been substantively reviewed since 2001.
He called for progress towards a BHF core service package, saying that if industry does not address the “missing eight million” – the economically active South Africans who remain outside medical schemes because cover is unaffordable – existing risk pools would experience increasing pressure.
TimesLIVE article – Fraud drains R30bn from South Africa’s healthcare sector (Restricted access)
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