Exposure to PSEMAS becomes increasingly risky for health care providers

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Edgar Brandt

Windhoek-Public servants in need of medical attention are stuck between a rock and a hard place as most health professionals in the country are still refusing to service them due to long payment delays by the Public Service Employees Medical Aid Scheme (PSEMAS).

According to the Namibia Private Practitioners Forum (NPPF), which is a section 21 company (not for profit) with over 300 members who are all health care providers, the PSEMAS contract with private health care providers stipulates that the scheme will pay for services and products within 30 business days after receipt of a claim.

However, a debtors age analysis amongst NPPF members shows that PSEMAS does not honour this obligation, with as much as 40 percent of claims being older than 60 days.

This means that the exposure to PSEMAS is becoming an increasing risk for health care providers. “Many health care providers cannot pay their own monthly expenses because of this cash flow problem created by government. Those providers that carry stock (such as medicines, dental products, optical frames, etc.) have to pay their suppliers long before PSEMAS pay their claims. No business can be sustainable in this environment,” lamented Eben de Klerk, a representative of NPPF.

Without official comment from the Ministry of Finance regarding the delay in PSEMAS payments, many private practitioners can only deduce that the current crisis is mainly due to the government’s financial dire straits. “External factors and several populist, but counter-productive government policies, are to blame for this economic situation. On the part of alleged mismanagement, the worst mistake PSEMAS made was its short-sightedness in managing its fraud risk. With a relatively small investment it could have safeguarded the fund against fraud by members, non-members and health care providers,” said De Klerk.

He suggested that a peer review system, which includes continuous training of health care providers, could have saved the fund substantial amounts and De Klerk noted that NPPF supports current investigations against alleged fraudulent doctors, but fears this is too little too late.

“A proper holistic risk management system should have been introduced a long time ago. For many years the fund relied on investigative outfits whose efforts came to nothing, as their approach was not legally sound. The NPPF in the past offered to assist the fund in this regard, but nothing came of it,” he said.

A few years ago, in 2011 to be specific, it was reported that N$90 million was paid per year to Methealth Namibia Administrators to administer the scheme. More recent figures for PSEMAS and medical aid fund administrators do not seem to be available and Methealth continues to be the administrator of PSEMAS.

Florian Amulungu, the chief executive officer: health, at Methealth, referred this reporter to the Ministry of Finance as the entity responsible for PSEMAS payments.

To exacerbate the situation, allegations of fraud have also been levelled against some health care professionals who some observers claim are taking advantage of loopholes and milking the system dry.

“There is no doubt that there are fraudulent health care providers, of local and foreign origin. It remains the duty of the fund to employ proper risk management systems, which it has failed to do in the past. If we have to continue the blame game, we must include all role players, such as the decision-makers within PSEMAS, the appointed administrators (and administration costs in medical aid funds in general are higher than all claims by GPs), managed health care providers, reinsurers and other liabilities such as the possible N$300 million that medical funds can be fined for unlawful tariff setting,” De Klerk explained, referring specifically to the High Court judgement of the Competition Commission against NAMAF and Medical Aid Funds.

He added that current contributions made by PSEMAS members are hopelessly too little to even speak of a sustainable fund, as monthly contributions to PSEMAS by members are approximately 5 percent to 10 percent of the contributions paid to private medical aid funds for average cover.

“Health care to government employees and their beneficiaries are paid from tax revenue; reduced tax revenue translates to PSEMAS’ reduced ability to pay for medical services. It is simple – for PSEMAS to become a sustainable fund the contributions must increase to the same levels paid to private medical aid funds, as the services provided are provided by the same health care providers. The only difference is that most private health care providers are willing to work for PSEMAS patients at a substantially reduced fee. Remember that all administrators, including Methealth, are profit-driven unregulated entities, sharing in the funds earmarked for medical services,” De Klerk explained.

He warned that the possible implications should PSEMAS close down could be catastrophic if no viable alternative is put in place.

“All PSEMAS beneficiaries will be dumped on the already overstretched public health care system. Ultimately there will be a substantially reduced availability of health care services in Namibia. PSEMAS provides health care services to approximately 295 000 Namibians. Many health care facilities treating PSEMAS patients remain open in remote areas to serve PSEMAS and private patients. Many health care providers will close down and many will offer their services in other countries as most countries welcome and cordially remunerate medical expertise,” said De Klerk.

He noted that NPPF has already consulted the Minister of Health, Dr Bernard Haufiku, and is currently seeking a meeting with the Minister of Finance, Calle Schlettwein, to design a possible alternative model to improve sustainable health care to PSEMAS patients.

“Health care providers want to continue providing health care services in a sustainable environment. We need to work with government to find a sustainable solution. We simply don’t see initiatives such as Universal Healthcare and the National Medical Aid Scheme providing solutions in the near future. These are populist pipe dreams currently removed from reality.”

“If Namibia does anything to threaten the sustainability and attractiveness of health care professions, supply of health care services will reduce over time, causing a natural increase in health care costs, to the point where only a privileged few rich people will have access to health care,” De Klerk said.

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