Overpricing hits Zim health insurance

Source: Overpricing hits Zim health insurance | Sunday Mail (Business)

Tawanda Musarurwa  

When elephants fight, it is the grass that suffers.

This African proverb has been used so many times it has become a cliché, but it is apt when applied to the silent feud that is taking place between medical aid societies and health service providers.

Although there is a salient agreement between health service providers and medical aid societies for the settlement of claims over a maximum 60-day period, the former say settlements are taking as long as six months to be settled.

This has forced health service providers and pharmacies to hike their charges and drug prices.

Concerning drug prices, most pharmacies surveyed by The Sunday Mail have what may be termed a “medical aid drug price.”

An investigation by this paper discovered shocking drug price disparities between pharmacies but using the same medical aid.

One pharmacy stated a shortfall of $4 020 (approximately US$47) for a month’s supply of the drug Lorazepam, which retails at a cash price of between U$7 and US$15.

Another pharmacy gave a shortfall of $2 000 (approximately US$23) yet was selling the same drug at a cash price of US$7.

Quizzed on the price disparity, one pharmacist admitted that the “medical aid price” was far higher than the cash price, adding that the “medical aid prices” also varied depending on the medical aid in question.

Price disparities among pharmacies point to the fact that they are key in the pricing confusion, but also to the set limits of various medical aid societies.

In some cases, medical aid societies are covering around 20 percent of the price of a drug.

Said a private doctor who spoke to The Sunday Mail on condition of anonymity:

“Typically, it’s because when we submit claims, medical aid societies sit on them, like I know one of them, I submitted a claim in January, and it’s only getting paid this month (August).

“Most medical aid societies tend to process claims just four times a year,” said the doctor.

“Basically, they are letting inflation take care of the claims, but in the meantime, I have to pay for bills, etcetera while they hold on to claims.”

This has put paid to the very idea of medical insurance, but more so to the philosophy of healthcare insofar as healthcare is an indelible component of human social structures.

All things being equal, health insurance is the principal apparatus through which individuals cover healthcare costs.

Public health and policy specialist Enock Musungwini said a lack of effective regulation was creating opportunism in the sector.

“The (drug) overpricing is due to an over-subscribed sector with many health service players and pharmacies trying to maximise on few clients.

“It is also due to the lack of an agreed tariff between medical aids and the health professional groups,” he said.

“This will only be solved by a neutral body made up of perceived neutral members who are not all health professionals.”

Currently, medical aid societies are regulated by the Ministry of Health and Childcare as provided for in the Medical Services Act (Chapter 15:13, Medical Services (Medical Aid Societies) Regulations, 2000 and Statutory Instrument 330 (2000) as amended by SI-35 of 2004.

This is despite long-standing efforts by insurance regulator — the Insurance and Pensions Commission (IPEC) to assume regulation of medical aid societies.

“Health matters cannot be left to be regulated by market forces. Health is a right, it is not a commodity of choice,” said Mr Musungwini.

The impasse between the healthcare providers and the medical aid societies under the Association of Healthcare Funders of Zimbabwe (AHFoZ) banner particularly relates to the lack of an agreement on tariffs.

In recent months, medical aid societies have gradually increased their members’ contribution rates, arguing that the AHFoZ scientific tariff — indexed to the foreign currency auction rate (currently circa 85 to the US dollar) — are “not sustainable.”

The continually rising tariffs and the attendant shortfalls when one is seeking healthcare services have reduced public confidence in private-sector health insurance.