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Why medical specialists charge so much

Oct 02 2014 10:11
Fin24

Cape Town - In the ongoing debate on what causes the high cost of private hospital and medical care, various issues have been pointed out by those involved as well as those affected.

On the one hand a medical scheme like Bonitas said hospital costs are the medical scheme’s single biggest ticket item and account for over 44% of the scheme’s total annual expenditure on claims.

READ: Debate on high private hospital costs hots up

At the same time the Competition Commission will be addressing the issue through its inquiry into the private healthcare market.

Now Fin24 user Pieter Chiolé, a specialist anaethetist, working at the private hospitals on the South Coast in KwaZulu-Natal, gives yet another perspective on the matter. He writes:

There is no question that private medical care is extremely expensive.

Yes, on the one hand, it is a business, that must show profit. And yes, as mentioned, the costs to run a hospital, in line with the laws made by the health department, an effective personnel department, and keeping it medico-legally safe, is simply enormous.

The kind of medicine, sterility and safety precautions, technology, and level of skilled staff used in ICU and theatre simply to keep a patient alive, demands immense budgets that simply cannot be skimped on without endangering lives.

A sad fact of life.

This is still excluding doctors and relates merely to hospital expenses.

One profession where people are grossly underpaid for their honourable work is the nursing profession.

These people (sisters and ICU staff), studied hard to get their qualification, has immensely stressful jobs and get paid close to a cleaner's salary.

In my experience, the pay-slip of a nurse is ample evidence that slave labour still exists and needs to be addressed urgently for the long-term benefit of us all.

READ: Private hospital staff: We are money-making slaves

Specialists' fees explained    

When it comes to the doctors' fees that many patients believe is unscrupulously high, and definitely unethical, I may shed some light on a specialist's billing as an anaethetist:

Firstly, doctors don't make themselves rich on the patients' account. Doctors' accounts make out a tiny portion of medical hospital expenses.

However, unfortunately, the patient increasingly has to pay this portion as the medical aids pay less of the doctor's fees every year.

The extra fees doctors charge above medical aid rates (contracted out fee) are for reasons, none of which are to be spectacularly rich, as the public is made to believe.

Medical aids never kept up with inflation.

They increase payments by 5.5% per year, while medical aid payments to be a member increase by 14% per year. What do they do with the other 8.5%?
 
When specialists - in this case anaethetists - bill within medical aid rates, they earn an hourly rate of about 25% that of lawyers and about 33% that of a private engineer.

This is after specialists have studied for thirteen years (at least) and only started to earn an income for the first time at the age of 35 years.

They also have the daily responsibility of keeping people alive during operations or in ICU and, on top of it all, needing to run a business.

This in itself is ludicrous.

Being in the private sector, it means the doctor's income doesn't go to his pocket, as one might think.

His earnings need to cover the whole of his business expenses (office premises, staff, equipment), medico-legal cover and retirement (as he has no pension fund), that needs huge investments.

Also bear in mind that a specialist's income stops abruptly when taking leave, while his business and living expenses continue during the time when no money comes in.

Leave must be provided for, due to long working hours and a profession with a high level stress.
 
Altogether, the rates medical aids stuck with to pay doctors, simply force doctors to charge above medical aid rates, which sadly, fall on patients' expenses.

Take my practice, for instance. We are the only anaesthetic practice that decided not to charge above medical aid rates to save costs for patients.

It seemed to be the best for the patient as consumer, but the story turned out quite the contrary.
 
The consequences are that we could attract no anaethetists, not even locums, to join us or simply help out as we grew. They clearly stated the inadequate income as a reason.

As a result we can no longer provide enough anaesthetic services in our region, which ironically works to the detriment of the very patients we tried to help.
 
The senior half of our practice's partners will not be able to retire at age 65.
 
My simple projection is that our practice will not grow in workforce and probably shrink as younger partners will move elsewhere to maintain a sustainable income in line with their hours and responsibility, and to provide for retirement.

This will cause, based on the simple rule of supply and demand, that private anaesthetic healthcare will decline in our area and simply collapse in our vicinity as doctors move elsewhere to find income worth their sweat.

ALSO READ: Opting for no medical aid, state hospitals

- Fin24

* Are you a specialist who wants to share your story? Let us know.

Disclaimer: All articles and letters published on MyFin24 have been independently written by members of the Fin24 community. The views of users published on Fin24 are therefore their own and do not necessarily represent those of Fin24.

medical aids  |  health  |  myfin24
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