Medical fraud still the most pervasive type of fraud in SA


Medical aids lost at least R15-20bn of total private healthcare industry spend to fraud last year, with the Board of Healthcare Funders of Southern Africa reporting about 10-15% of all claims as fraudulent, abusive or wasteful.

Approximately 3-4% of the R160bn medical industry is fraud.

According to Paul Midlane, general manager of healthcare forensics at Medscheme, the cost of fraud is passed on to clients as medical aids put contributions up to withstand escalating private healthcare costs.

To combat the problem, Midlane believes it is necessary to change from a fee-for-service to fee-for-value model, in terms of which the healthcare provider is remunerated based on the outcome of treatment. There are currently few regulations guiding what private practitioners charge.

“Global fee arrangements are being investigated by medical schemes worldwide in an effort to contain costs. This is effectively a ‘bundle’ fees model, where the healthcare provider receives a set sum to coordinate and distribute among all parties involved,” he says. “The worry is that an issue of underservicing may arise, with providers pocketing the profits. As with the fee-for-service model, a member may not be able to spot corruption, however.”

To reduce medical fraud, state healthcare would need to reach global standards, in the process forcing competition in the private sector, which would bring costs down. “Advancing tech – like wearables that monitor heartbeat, temperature, glucose and more – will also inevitably help streamline industry efficiencies and lower costs,” says Midlane.

Medical aid members can play a role in reducing medical fraud by getting a second opinion before procedures, questioning anything that seems suspicious, investing in preventative care and exploring non-invasive options if appropriate. Members should also see a GP before a specialist to ensure they get the right referral.