“We welcome competition. It’s good for everyone ÔÇô but it won’t be plain sailing for the newcomers.”
The year was 2005 and Dennis Alexander, chief executive of Botswana Medical Aid Society (BOMAID), was holding forth on new entrants to the private health care sector. Prosperity Health Botswana, Peolo Health and then Itekanele had launched into the market. Coming on the heels of the introduction of the Botsogo scheme, Itekanele’s foray into the market was regarded warily by the country’s three veteran schemes, BOMAID, Botswana Public Officers’ Medical Aid Scheme (BPOMAS) and Pula Medical Aid Fund (PULA).
“We have watched helplessly as new schemes have come in and caused disruptions before quietly folding down leaving behind trails of unpaid bills,” Alexander said. And he knew too well what he was talking about. After all, it had taken BOMAID a good three decades to reach the 60,000-plus lives it then looked after, a number that represented half of the 120,000 people then on medical schemes. “But the perception that there is a huge market out there is wrong,” he said. “The potential market is grossly unfamiliar in matters pertaining to medical aid. So whoever intends to tap into this market will need round-the-clock marketing and a surplus measure of persuasive skills.”
With something of a glut in medical aid schemes, one of the biggest problems was that the rate of increase of medical aid contributions lagged behind inflation. Generally, yearly subscription increases for BOMAID had by then been around 8 to 10 per cent. Between 1993 and 2002, the rate of increase of fees charged by PULA and BPOMAS, who are administered by the Associated Fund Administration (AFA), averaged 3.46 per cent, against an average annual inflation rate of over 10 per cent during that period.
Seven years on, BOMAID, now with 77,000 members, confronts a new challenge: a row over medical tariffs with doctors associations. The row has come to a head with the Medical Practitioners’ Group (MPG), representing over 130 specialist doctors, being threatened with de-registration if they do not accept the tariffs BOMAID prefers to enforce.
Earlier, the Botswana Dental Association (BODEA) had lodged a complaint with the Botswana Competition Authority against BOMAID, Botsogo, PULA and BPOMAS. BODEA’s argument was that the tariffs agreed on stifled competition among dentists. “There is an insignificant variation in the dental tariffs among the four medical aid schemes,” BODEA wrote in the letter of complaint, adding that the “collusive” act of the four bodies limited competition between private practitioners in dental care.
As a rule, members of BODEA undergo an annual review during which dental tariffs are decided upon, said Duncan Thela, chief Operations officer of the Associated Fund Administrator (AFA), the administrators of BPOMAS and PULA. Baseline tariffs then are determined by the qualifications of specialists, the time spent on a particular operation, the consumables used and the prescribed medication. The AFA then further takes into consideration the regional standards looking at financial performance, what is available in coffers. They also make projections based on past premiums, claims and determine a way forward sometimes with recommendations from their actuaries.
For their part Botsogo Health Plan indicated that their priority was to create the best possible conditions for their clients who also happen to be the patients of the members of BODEA. Marketing Manager, Ernest Molome said that by virtue of having these tariffs they are also protecting themselves from fraudulent practices that may occur in a situation where there is a “Free Market.”┬á
He said practitioners do not have set prices for their procedures and charge according to patient and by so doing they are contradicting the “Fair Practice” which they claim to be advocating.
The Competition Act of Botswana 2009 states that “An enterprise shall not enter into agreement with another to the extent that such agreement involves directly or indirectly fixing a purchase or selling price or any other trading condition.” Thela of the AFA explains that the “insignificant variation in dental tariffs” are purely coincidental since they stopped negotiating tariffs with other medical aid service providers in the early 2000s.
For fear of victimisation, a member of BODEA stated anonymously that, “The tariffs are generally not agreed upon. The medical aids prescribe to the doctors what they should charge. The doctors as the sellers of the services should be the ones determining prices for procedures. The set tariffs are anti competitive. There’s no price competition between doctors. This has led to a stagnated dental industry. Competition in any industry always leads to increase in quality of service.”
BODEA and Botsogo Health Plan had agreed on an increment of 4.5 percent. BODEA however discussed this further and agreed on increasing “some of their service codes between 50-200 percent”. This was agreed to increase competition which will ultimately improve service delivery. In an effort to inform their members Botsogo Health plan issued a memorandum which stated that patients should discuss treatment plans and fees prior to any action and that they should be aware that any costs incurred higher than what the medical aid is prepared to pay will be settled by the patient.┬á
Last week, tensions rose again when BOMAID, stung by criticism of undercutting medical practitioners, leaked to the press detailed information that showed payout to surgeons and specialists. “This is irresponsible. This may result in serious consequences against BOMAID. We were just asking for improved payments,” MPG Deputy Chairman, Dr. Gagoitsiwe Saleshando, adding that leaking of the information was practically unethical. The controversy, which started as a request by medical practitioners to introduce a new payment system, called balance billing, has now tipped over into threats of legal action for unethical behaviour and breach of confidentiality.
Doctors had complained that the capitation system of payment is short changing them and asked to implement balance billing as a preferred payment method. Medical practitioners, dentists and eye specialists are of the view that balance billing is consistent with competition law. Failure to find headway in the impasse has resulted in utilization of both billing methods. “Members are allowed to go to all contracted service providers regardless of whether the provider uses balanced billing or capitation,” said BOMAID Business Development Manager Thulaganyo Molebatsi.
Now BOMAID has classified medical doctors and specialists into two groups, depending on which of the two methods of billing they opt for.
