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Broker rejects blame for hospital costs

Cape Town - Do not blame brokers for high private hospital costs, according to Fin24 user Andrew Sternslow of Andrew Sternslow Broking Services.

This is part of the ongoing debate of what causes the high cost of private hospital care in SA. Hospital tariffs are set through annual negotiations between medical schemes and hospitals. These negotiated tariffs remain fixed throughout the year.

Sternslow was reacting to the view of another Fin24 user Dr Jacques S (a medical doctor), who blamed high hospital costs on broker commissions.

READ: Plea for more generous medical fee negotiations

Dr Jacques S wrote: "Last year the total spend by medical aids to hospitals was equal to the total paid in commissions and admin fees to its brokers. This was also five times as much as what was spent on all the general practitioners in all disciplines."
 
"When last have you heard of the schemes trying to save costs by cutting broker commissions? Who drives the better car? Your GP or your broker?" asked Dr Jacques S.

According to Sternslow brokers earn a maximum of about R70 per family group per month.

"I do not know where [Dr Jacques S] got his info that brokers make a fortune with medical aid. It is just not true, and remember, this fee is prescribed by law," said Sternslow.

He said on a visit to Zimbabwe he found that most people either did not have medical cover and those that actually could afford cover had very limited (and cumbersome) offshore cover.

"I have been a broker in the field for the past 25 years. The reality is that doctors and hospitals are making so much money and have attitudes varying from "I don't care about the patient" (reality) or "if you don't like my fees, I will emigrate to Australia (for
example). Little do they realise that their income would be severely curtailed and         controlled by governments out there," said Sternslow.

He thinks that the government has a unique opportunity to have a roundtable conference with the medical profession and set fees at a reasonable level.

"The medical profession moving from this country to another country is, by and large, an empty threat. I can understand the cost of imported goods in the medical profession being ahead of local inflation, but that does not relate to the cost increases they are imposing on medical aids and the public of this country," said Sternslow.

"I have just been to see an orthopaedic surgeon recently. The initial consultation was R600 - just to look at an X-ray and for him to tell me that there's not much he can do for my knee. It took him five minutes."

This surgeon has over a one month waiting list to get an appointment.

"Think about that: R600 x 4 (one hour) x eight hours per day x 20 days per month = R384 400 per month income and this excludes operations. Not bad if you can get it I suppose," said Sternslow.

In another Fin24 article on the matter Genesis Medical Scheme said bigger is not always better, and cheap can be nasty, so do your homework and make sure you take the medical aid benefit option that will provide the best cover considering your healthcare needs along with what you can afford.

"An aspect that certain brokers conveniently choose  to omit is how they can 'legally' optimise their commission earnings – and that they champion membership to larger (and often more expensive) medical schemes because it suits their own interests," said Genesis.

"A broker may, for instance, say a more expensive scheme will be the better option for you as it will cover all your health funding needs, when actually their recommendation simply stems from the fact that they will be able to earn a higher commission."

A broker’s commission is based on the contribution that you pay to your medical aid. That means, the higher your contribution, the higher his or her commission, according to Genesis.

READ: Medical aid membership and your broker

- Fin24

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