Saturday, May 30, 2020

The effects of lack of competition in the Botswana private health care industry

Competition in any industry leads to improved value for customers, quality of products and services relative to price. It leads to relentless improvements in efficiency. Innovation propels advances in the state of the art, the market expands and the customer’s needs are met. Choice expands as firms work to distinguish their products or services from others. Excellent firms prosper while firms of low quality, poor service or high costs decline or go out of business unless they make fundamental improvements in the way they operate. Competition is important in virtually every field; retailing, airlines, financial services, computer services, health services etc.
The private health care industry in Botswana could benefit from this idea of competition.

Competition goes hand in hand with price. It is accepted in any market that regulation of price restricts innovation and quality of goods and services. It is my view that the practice by medical schemes in Botswana (BOMAID, PULA and BPOMAS) of regulating medical fees through stringent contracts signed by health providers is contrary to the spirit of competition in general.

Therefore, regardless of the quality of health services, the experience of the doctor and the standard of the operating environment, the price remains the same. There is therefore no incentive amongst doctors to invest in their businesses for higher quality service because the returns would be the same as those that have not invested. Batswana might be confronted with a general or specialist practitioner who, in an attempt to make ends meets, would be forced to focus on a high volume turnover at the expense of quality provision of health services. This high volume business model may lead to doctors under-diagnosing, under-prescribing and under-treating patients.

This unilateral setting of prices is contrary to the Competition Act of 2009 which seeks to promote competition in all markets and remove all obstacles that curtail the free play of competition in Botswana. For the Botswana private health care industry to be efficient and progressive, it cannot be seen to be immune to the Competition Act.

Whilst I believe that any professional worth his salt has the right to levy a fee for their services, I am equally alive to the fact that medical schemes have the right to protect their business models and profits. Doctors cannot prescribe or influence medical schemes’ benefits as I believe it is the members that are rightfully placed to do that. It is up to the doctor and their respective patients to negotiate prices. Where there is a difference between patient’s medical aid benefit and doctor’s fees, the shortfall should be shouldered by the patient. For example, if the doctor’s fee is P105 and the medical scheme can only pay P100 for that particular treatment, the patient shoulders the P5.
This concept of balance billing is a reasonable way forward if we are to drive our medical industry to a competitive and efficient model. Balance billing is being successfully utilized in other SADC countries. It must be noted that what medical schemes pay for each particular treatment / procedure, called the Scale of Benefits, is more or less the same across all medical schemes in SADC. Unlike in the rest of SADC, medical schemes in Botswana do not allow doctors to charge anything more or less than the scale of benefits. In South Africa, Namibia and Zimbabwe doctors are indeed allowed to charge anything more of less than the scale of benefits to allow competition in their markets.

Balance billing will not necessarily make health care unaffordable, as practitioner prices will have to be competitive and in line with what patients can afford based on their medical aid benefits. Any doctor charging way above market prices will accordingly be penalized by the market. Medical schemes can adjust their benefits to suit market prices from time to time. Any medical aid with scale of benefits way below the market price will accordingly be penalized by the market. A competitive environment will therefore exist amongst medical schemes which in the long run would benefit patients. It is envisaged that the medical scheme with the best benefits will be accordingly rewarded by the market.

The current system where prices are unilaterally determined by the medical aids does not necessarily translate into patients getting the best possible health care. Patients should be at liberty to search the market for the best possible service at the best possible price. They should be given the option of best possible care in line with international practice, without necessarily confining themselves to the schemes’ scale of benefits.

It is my belief that private doctors in Botswana would like to give Batswana the best possible health service using the latest medical equipment and technologies. Question is how many doctors are going to purchase and use the latest medical equipment when there is no incentive for doing that? None! Who loses out in the end?

The current high volume business model that is prevalent in the private health industry is not going to take us anywhere. The lack of competition has led to a reduced quality of service and products (treatment options).

Next time you go to see a private doctor ask yourself the following questions; are you being under-diagnosed, under-prescribed and under-treated. Are you being given the best treatment option that is in line with international standards or is the treatment option confined to your medical scheme’s scale of benefits?

Dr Basimane is a doctor in private practice. He writes in his own personal capacity.


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Sunday Standard May 24 – 30

Digital copy of Sunday Standard issue of May 24 - 30, 2020.