Capitation model is the one to watch according to Bonitas

According to Bafana Nkosi Chief Principal Officer at Bonitas Medical Fund, one avenue of regulating this industry would be the wide adoption of the Capitation Model Health Care Service Provision.

This model as stipulated in the National Health Amendment Bill, sets a situation that sees healthcare providers receiving a fixed amount of money per patient in return for an agreed upon level of deliverable on their part.

Says Nkosi, this model is very similar to the Health Management Organisations (HMOs) deployed successfully in America. While this model is being used in varying levels across South Africa, full country-wide implementation would require that both service providers, medical aid schemes and their members be ready to adopt a completely new approach.

“Medical aid providers who might previously have viewed this model as a mean to lose money in that the amount they would earn per patient would be restricted to a fixed monthly fee,” he says. “A different way of seeing this might be for providers to view this more as an opportunity to retain patients on a long term basis, managing their care as opposed to just providing it.

“Providers would also be motivated to provide high levels of service to ensure repeat business, because the more patients who are pleased with their service, the more new patients will choose to address their health care requirements through them.”

The Capitation Model could be a win-win situation, says Nkosi, but the Capitation contracts signed between medical aid providers, who will fill the role of conduit in this field, and the health care service providers would have to be well-planned, thoroughly thought out and constantly monitored.

“This is especially when it comes to ensuring that health care providers are not under- nor over-servicing their customers,” says Nkosi. “Capitated providers are paid a fixed fee per month based on the number of members in their care, irrespective of the number of times the patient is seen.

“While this might discourage over-servicing, it could just as easily result in under-servicing and patients ending up in hospital thereby defeating the objectives of this approach.”

This is where service level agreements, and hopefully the drive to retain patients, would play a defined role, he adds, with providers realising that the more attractive their practice is to patients and their medical aid providers, the more medical aids they'll be able to sign with and the more capitation Rands they'll be able to bargain for.

Nkosi believes that this model could easily be kicked off should two or three bigger medical aid providers join forces and acquire a few hospitals. “Again, it will take a refreshed outlook on the part of medical aid providers to get this right,” he concludes.