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Sunday, June 1, 2008
Price check

“Medical scheme trustees would be negligent in their duties if they did not go to all hospital groups in search of the best value for their scheme members,” says Otto Wypkema, CEO of the National Hospital Network (which is a group of 74 independent private hospitals, day clinics and psychiatric clinics and ophthalmic clinics).

He says it is the fourth largest private hospital group that has “solid representation” in South Africa’s major cities, representing almost 18% of the private sector beds.
Historically the group has positioned itself as “an affordable provider of medical care”.
Wypkema says, “In the current price sensitive environment we at NHN have been surprised at how few trustees of medical schemes have requested briefings on our price structure.
With a clear reference to the recent proposals by the Department of Health to regulate prices in the private sector, he comments, “We are also surprised that not more of the medical schemes require their members to make better use of day clinics, which are appropriate and certainly more cost effective for certain procedures.
“A number of procedures are routinely performed at day clinics. Dental procedures include extractions, crown and bridge work, periodontal surgery and implants. Gynaecological procedures include sterilisation, D&C, biopsies and examination general anaesthetic. Ear, nose and throat procedures include tonsillectomies, adenoidectomies, sinus cleansing and the insertion of grommets. Orthopaedic procedures include the correction of digital abnormalities, examination and exploration of joints, shoulder and knee arthroscopy, tendon and muscle surgery and the manipulation of fractures,” he says.
“Our hospitals favour the fee for service pricing model, as it is transparent and places the doctor at the centre of the treatment process. Volume-based designated service provider contracts (where medical schemes contract exclusively with certain hospital groups) are not necessarily in the best interests of patients as they sometimes require them and their families to pay for transport costs, adding to out of pocket expenses,” he explains.
“Proposed government regulation of hospital procedures would not be in the interests of our hospital group as they would remove what we believe is our present competitive edge.”
The National Hospital Network was founded in 1996 as a representative body for independently owned private hospitals.  It currently has 74 members, consisting of 37 hospitals, 12 day clinics, 11 psychiatric hospitals, 11 ophthalmology clinics and 3 sub acute facilities. The group has members based in Johannesburg, Pretoria, Bloemfontein, Cape Town, Port Elizabeth and Durban.
 

Copyright © Insurance Times and Investments® Vol:21.5 1st June, 2008
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