Future of SA private healthcare is looking ill, warns Icon Group

SA's private healthcare sector is under pressure to reform and adopt alternative billing models while the traditional fee-for-service model is coming under pressure, says Icon Group COO Dr Ernst Marais.

The shrinking economy – with the country's gross domestic product taking its biggest plunge since the 2008 global financial crisis, a 0.8% decline in household expenditure and a weakening rand – will hit local medical aids hard, according to Marais.

“Add to this ageing risk pools, higher incidence of expensive diseases such as cancer, and stagnant member bases, we will see more members downgrading to more affordable healthcare options, placing further strain on medical aids,” says Marais, who champions the value-based care (VBC) model as a tenable alternative to the current fee-for-service model used in the South African private healthcare system.

But ultimately it is the consumer who will be affected the most by rising healthcare costs and less access to quality care.

As consumers tighten their purse strings, they first scale back on gripe purchases such as insurance products. “This includes medical aid membership and the recent increasing trend of anti-selection by members. This is when members downgrade to a more affordable option or reduce the number of dependants they have on their medical aid,” says Marais.

This trend, compounded by tough market conditions, is likely to continue, placing medical aids under increasing pressure to reinvent themselves.

Says Marais: “The solution is VBC, which places the patient at the centre. For nearly a decade the Icon Group has advocated for the VBC model in local oncology. Our studies show that VBC reduces oncology costs by as much as 27% without compromising patient care and outcomes.”  

The VBC model drives efficiencies in terms of costs and efficacy, both in the treatment of and outcomes for patients. This leads to cost efficiencies for medical schemes without compromising the quality of patient care.

Recent research published by Icon shows that patients treated using evidence-based treatment protocols led to cost efficiencies while showing no evidence of inferior care. The Icon approach, which supports protocols and integrates evidence-based medicine, showed a significant reduction in costs compared with scenarios where no protocols were applied. Patients received appropriate and quality care at a much lower cost.

VBC places patients firmly at the centre of their treatment by aiming for the best clinical outcomes and patient experience (quality) at lower costs for both the patients and medical schemes.

“This means that often there is more money left for life-saving treatment and less wastage on administration,” says Marais.

VBC in oncology is not the only disruptor in the industry. One of the biggest game-changers introduced by Icon is real-time authorisation for in-protocol treatment.

“Real-time authorisation is without a doubt an industry disruptor. It significantly reduces both the administrative burden and costs in practices. Importantly, it also reduces the conflict between practitioners and medical aids. It also has a tangible impact for patients who prior to this intervention had to wait for weeks before treatment could start,” says Marais.

Representing more than 80% of oncologists in SA, Icon Group has the richest oncology database (more than 92,000 cases) in the country, adding about 20,000 new cases per year.

“We use this data to build efficiencies into the business process. Importantly, from a clinical point of view, it helps in the ongoing development of the treatment protocols based on measured performance and efficacy data,” says Marais.

“The future of private healthcare will be driven by new-generation models such as VBC, and early adopters have a competitive advantage by securing an alternative revenue stream with built-in efficiencies.

Icon Group is proof that the VBC model works “by putting the patient at the centre and reducing wastage and costs, while improving efficiency and efficacy for all”, says Marais.

For more information, visit the Icon Group website.

This article was paid for by the Icon Group.