Category: Ethics and Law

Categories : Ethics and Law Medical IndustryTags :

The Impact of Fraud, Waste, and Abuse on Medical Scheme Members and Strategies for Industry Reform

On By ModernMedia
Photo by Jp Valery on Unsplash

South Africa’s medical schemes industry is taking a strong, zero-tolerance stance against fraud, waste, and abuse – practices that are undermining the healthcare system. Fraudulent claims, unnecessary procedures, and mismanagement of resources are costing billions of rand, inflating healthcare costs, and putting additional financial strain on members. Instead of supporting essential treatments and care, these resources are being misused and misallocated, writes Dr Katlego Mothudi, Managing Director at the Board of Healthcare Funders (BHF).

At the recent BHF Healthcare Collab Hub, industry leaders highlighted the need for immediate reforms to curb these harmful practices and safeguard the future of medical schemes. As healthcare costs continue to rise, tackling fraud (deliberate deception), waste (inefficient use of resources), and abuse (excessive or improper use of services) is essential for ensuring that medical schemes remain affordable and sustainable. Without swift action, members may face higher premiums, with fewer resources available for the critical care they depend on.

Fraud, waste, and abuse (FWA) in the healthcare sector is not just a regulatory issue or an administrative headache, but a direct assault on the wellbeing of medical scheme members. Every fraudulent claim, and every misuse of resources, drains the pool of funds that are meant to ensure that individuals have access to necessary healthcare services. For millions of members, the repercussions of unchecked FWA include increased premiums, reduced benefits, and the potential for schemes to become financially unsustainable. It is a burden borne by all members, regardless of whether they have directly engaged with healthcare services or not.

The healthcare industry, specifically medical schemes and their administrators, has a significant responsibility to address this problem head-on. Their duty extends beyond managing funds – they are custodians of a system designed to protect individuals’ access to essential healthcare services. 

If these schemes fail to adequately combat FWA, the entire medical scheme ecosystem becomes compromised, undermining trust in healthcare funding and leaving members exposed to higher costs and decreased quality of care.

The ripple effect of FWA

The scale of FWA in the medical schemes sector is staggering. According to industry reports, billions of rands are lost annually to fraudulent activities. Whether through inflated billing, unnecessary procedures, or outright false claims, these actions take funds directly from the pockets of members. Medical schemes are forced to increase premiums to cover these losses, meaning that honest, hardworking individuals are paying more for their healthcare – not because of rising medical costs, but because of the unethical behaviour of a few.

Moreover, the administrative costs associated with managing and investigating FWA claims are significant. These costs divert funds that could otherwise be used to enhance member benefits or improve healthcare services. 

The long-term impact is even more worrying. If left unchecked, FWA can destabilise the entire medical scheme system. Ultimately, it is the members who suffer the most, facing financial uncertainty and diminished healthcare support when they need it most.

What the industry can do: Curbing FWA

The healthcare industry has both the tools and the responsibility to take decisive action against FWA. Key stakeholders, including medical schemes, administrators, and regulatory bodies, must collaborate to develop comprehensive strategies that can curtail the losses associated with these unethical practices. Here are some key strategies:

1. Enhanced use of technology and data analytics

The industry is already moving towards the use of automated systems and data analytics to detect unusual patterns and potential fraud. However, the systems need continuous improvement to keep up with the evolving tactics of fraudsters. Schemes should invest in advanced algorithms and artificial intelligence (AI) tools that can analyse claims in real-time, flagging high-risk transactions before they are paid. Machine learning models, for instance, could identify patterns that suggest fraudulent behaviour, such as repeated claims for the same procedure or suspiciously high billing from certain providers.

This not only helps in early detection but also ensures that members who follow the rules aren’t unfairly penalised. It is essential, however, that these systems remain transparent to avoid unintended biases or discriminatory practices.

2. Collaboration across the healthcare ecosystem

The fight against FWA cannot be won by medical schemes alone. There needs to be greater collaboration between schemes, healthcare providers, and regulatory bodies. Sharing data across schemes and industries can help to identify serial offenders who hop between schemes, committing fraud on a wide scale.

Additionally, healthcare providers themselves play a critical role. They should be incentivised to report fraudulent activities or billing irregularities they observe within their network. Schemes can establish anonymous reporting systems and offer rewards for whistleblowers who help to uncover fraud. By creating a network of accountability, the industry can make it more difficult for fraudsters to operate with impunity.

3. Member education and engagement

Members are the first line of defence against fraud. If they are empowered with the right information, they can help to identify fraudulent or abusive practices. Medical schemes should launch educational campaigns that inform members about how to scrutinise their healthcare bills and understand their benefits better.

Simple actions such as checking that all billed procedures were performed or verifying service dates can catch many fraudulent claims early. Members who understand the importance of vigilance are less likely to be unwittingly complicit in fraud and can help schemes prevent abuse of the system.

4. Improved consequent management 

Strong consequent management is one sure way of deterring this fraudulent behaviour. The Health Professions Council should impose appropriate penalties on healthcare professionals found guilty. Schemes should not hesitate to take legal action against individuals or providers who commit fraud. 

Stronger penalties, including prison sentences and significant fines, can serve as a deterrent.

Moreover, schemes must ensure that once a provider or member has been found guilty of fraud, they are blacklisted across all schemes. Allowing repeat offenders to continue exploiting the system is a failure that impacts all members.

At the heart of any medical scheme is the promise to its members that they will be provided with financial protection when they need healthcare. Fraud, waste, and abuse erode this promise, making it harder for schemes to deliver on their commitments. To safeguard the integrity of the system and ensure that members receive the care they deserve, the healthcare industry must step up its efforts to curb these damaging practices.

By embracing technology, fostering collaboration, educating members, and enforcing strict penalties, the industry can make significant strides in reducing FWA. In doing so, they will not only protect their financial stability but also uphold the trust and confidence that members place in them. This, above all, is the most important goal.

Categories : Ethics and Law Neurodegenerative DiseasesTags :

Over 100 Key Alzheimer’s Papers Found To Have Suspicious Data

On By ModernMedia
Photo by National Cancer Institute on Unsplash

An investigation by Science has shown that over 100 key papers on Alzheimer’s research have used falsified data. The papers all have a common author – veteran neuropathologist Eliezer Masliah, a key researcher at the National Institute on Aging (NIA), typically as first or last author.

The investigation has found that scores of Masliah’s lab studies at the University of California San Diego (UCSD) and NIA are riddled with apparently falsified Western blots (images used to show the presence of proteins) and micrographs of brain tissue. Numerous images seem to have been inappropriately reused within and across papers, sometimes published years apart in different journals, under supposedly different experimental conditions.

At UCSD, Masliah had amassed decades of experience researching Alzheimer’s and Parkinson’s disease, amassing 800 papers. Some important topics in them, such as alpha-synuclein (a protein linked to both diseases), continue to have great influence. The US Congress had released a flood of funding for Alzheimer’s research, US$2.6 billion for last year’s budget, far outstripping that for the rest of the NIA, and Masliah was an ideal choice for its neuroscience division director. This was a position which was enormously influential for Alzheimer’s research in the US as well as internationally, allowing him to fund selected research over and above others with better scores form peer-review.

One of the drugs being developed based on his work is prasinezumab, which failed to show benefit over placebo in a trial of 316 Parkinson’s patients – but resulting in a host of adverse effects, though none serious. The drug was based on an idea by Masliah and another scientist (whose papers were also seemingly doctored) that a vaccine-like approach could cause the body to create antibodies against harmful precursors in both Parkinson’s and Alzheimer’s.

Questions began to be raised about his research two years ago. These were assessed by a team of forensic analysts and a neuroscientist, who concluded, “In our opinion, this pattern of anomalous data raises a credible concern for research misconduct and calls into question a remarkably large body of scientific work.” They acknowledge that accidental duplication is a possibility, and that images can acquire artefacts resembling improper manipulation during the publication process.

Columbia University neurobiologist Mu Yang used specialised software to detect similarities and alterations in images. She had previously worked with the team investigating manipulation in Alzheimer’s and stroke data. In her analysis, duplicated sections in certain Western blots that had been “seamlessly blended” quickly floated into view, she said. “It tells me someone put a lot of thought and effort into the image … and usually indicates something is very wrong.”

A team of 11 neuroscientists was less charitable when they viewed the images. Samuel Gandy, a prominent neurologist at the Mount Sinai Alzheimer’s Disease Research Center said that he was “floored” by what he saw, noting that even a “bus driver” could see that two images of a mitochondrion published two years apart were identical. “Hundreds of images,” he said in a video interview. “There had to have been ongoing manipulation for years.”

In response to this latest dossier, the NIH issued a statement stating that there was a finding of “research misconduct” for Masliah over reuse of figures in two papers, further stating that Masliah no longer serves as NIA’s neuroscience division director. The NIH stated that it had started its own investigation in 2023.

Source: Science

Categories : Ethics and LawTags :

SIU Takes Aim at Ballooning Dodgy Medical Litigation that is Costing the Government Billions

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Photo by Scott Graham on Unsplash

By Sandiso Phaliso for GroundUp

Payments of medical related legal claims (medico-legal) against the Department of Health ballooned to R2.7-billion in 2023. In 2013, it was R265-million. This is according to the Special Investigating Unit (SIU) when it briefed the Standing Committee on Public Accounts (SCOPA) last week.

SIU head advocate Andy Mothibi told SCOPA it found evidence of collusion between attorneys, touts, nurses and doctors, in both public and private healthcare. Some law firms also withdrew claims when the SIU started investigating them. This had stopped about R3-billion in fraudulent claims, he said.

Claims under investigation included those targeting families with children born with cerebral palsy, false claims of medical malpractice in state hospitals, and collusion between state healthcare workers and rogue lawyers to unlawfully secure private medical records to initiate claims against the government.

They uncovered cases of agents of rogue law firms impersonating officials of the South African Social Security Agency to secure powers of attorney on behalf of victims by claiming to be securing them social grants. He said they found two attorneys pursuing identical claims for the same individual in two different courts, and for vastly different amounts, in one case for R7.5-million and R25-million for the same patient and same condition

Mothibi said the health sector experienced an explosion of medical practice litigation cases in 2015, directed against health institutions and individual medical practitioners in both public and private practice.

Mothibi said in one case a claimant demanded R70-million for a supposedly botched circumcision at a Limpopo hospital when no circumcision had been performed.

Read the SIU presentation to Parliament

In 2017, the SIU started targeting provinces with the highest share of claims. At that stage, the Eastern Cape’s contingent liability for medico-legal claims was R15.9-billion; in Gauteng, it was R21.2-billion.

In the Eastern Cape, most medico-legal claims emanated from one Johannesburg-based law firm, Nonxuba Attorneys Incorporated. In five years, from 2012 to 2017, the firm submitted 44 claims totaling R497-million against the provincial health department. Nine claims for children born with cerebral palsy were identical each demanding R15-million.

“This was suspicious and indicated a lot of cut-and-paste on the part of this legal firm,” said Mothibi.

The company has, according to Mothibi’s presentation, been charged.

We have been unable to get hold of Nonxuba Attorneys and Business Day has previously reported that the company’s owner, Zuko Nonxuba, has been suspended from legal practice.

Also, in the Mthatha High Court claims increased from 46 to 529 between 2010 and 2016. There was collusion, said Mothibi, between some officials in the Office of the State Attorney, whereby out-of-court settlements for hefty sums were entered into without the mandate or even the knowledge of the department.

MP Veronica Mente-Nkuna (EFF) wanted to know the names of the legal firms implicated besides Nonxuba Attorneys and what the legal bodies have done about their operating licences.

She asked why the Department of Health had not conducted its investigations before the claims were paid. Who was responsible for the loss of money through these fraudulent claims, she asked.

Republished from GroundUp under a Creative Commons Attribution-NoDerivatives 4.0 International License.

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Categories : Ethics and Law Medical IndustryTags :

Fight Not Yet over as Case Against Vertex is Dropped After Cystic Fibrosis Medicine Price Cut

On By ModernMedia
Cheri Nel launched a court case against Vertex to force them to allow their generic cystic fibrosis drug to be imported into South Africa. Credit: Spotlight

By Catherine Tomlinson

Last year a South African woman took a multibillion-dollar United States pharmaceutical company to court with the aim of securing access to life-changing cystic fibrosis medicines. That case has now been dropped following a reduction in the price charged for the medicines in South Africa.

Cheri Nel, a Johannesburg-based investment banker, has dropped a potentially landmark court case against Vertex Pharmaceuticals. Nel was asking the Gauteng Division of the High Court in Pretoria to grant a compulsory licence to allow generic versions of a cystic fibrosis medicine called Trikafta to be imported into South Africa. No such compulsory licences on medicines have ever been granted in South Africa.

Trikafta, which was registered in the United States in 2019, has been hailed as a “miracle” treatment for cystic fibrosis, which causes severe damage to the lungs, digestive system and other organs in the body. The medicine is effective in treating around 90 percent of people living with the condition. It significantly improves the quality of life of people living with cystic fibrosis, eliminating many of its debilitating symptoms, while also slowing the disease’s progression and extending survival.

In February 2023, when Nel launched her lawsuit against the Boston-headquartered pharmaceutical company, the only way people in South Africa could access Trikafta was by travelling to Argentina to buy it from an Argentinian company selling a generic version of the medicine.

This is because Vertex, the company that holds the patents on Trikafta in South Africa, refused to register the medicine with the South African Health Products Regulatory Authority (SAHPRA) or identify a local distributor that could import unregistered Trikafta via Section 21 authorisations – a mechanism allowing importation of unregistered medicines.

The United States list price for Trikafta is currently over $300 000 (around R5.5 million at the current rand/dollar exchange rate) per person per year, which South Africans feared they would also have to pay if or when Vertex finally started supplying its medicine in the country. Researchers in the United Kingdom have estimated that Trikafta can be produced for under $6000 (around R110 000 at the current rand/dollar exchange rate) per person per year.

When Nel filed the case, generic Trikafta from Argentina – called Trixacar – was much cheaper than Vertex’s product (but still prohibitively expensive for many) at around $60 000, or almost R1 million per person per year. But the Argentinian company selling generic Trixacar faced potential patent infringement challenges if it shipped Trixacar to South Africa. Thus, the only way to get the medicine into South Africa at the time was to travel to Argentina to collect it. People living with cystic fibrosis in South Africa learnt how to do this through an informal network or Buyers Club of people around the world that were reliant on the Argentinian product.

Launching a legal case

Nel argued that Vertex was abusing its patents in South Africa by refusing to make Trikafta available in the country on reasonable terms, while also blocking other manufacturers from supplying the medicine in the country. If successful, Nel’s case would have allowed generic Trikafta to be shipped directly to South Africa, removing the need for travel to Argentina to access the medicine.

According to Nel, Vertex argued in the company’s answering documents to her legal filing that, as she was the only named applicant in the case, a compulsory licence for importation could only be considered for her.

Nel then worked with the South African Cystic Fibrosis Association (SACFA) to get other people living with cystic fibrosis admitted as co-applicants in the case. This process of seeking more people to join her case, she said, was time-consuming, difficult, and expensive, but more than 100 people were working towards being admitted as co-applicants before the case was dropped.

Under pressure, Vertex starts providing Trikafta in South Africa

As the case gained momentum and made headlines around the world, Vertex finally opened the door to allow some people living in South Africa to access their product.

In May 2024, Vertex identified Equity Pharmaceuticals as the local company through which Trikafta could be imported into South Africa via Section 21 authorisations. These authorisations are granted by SAHPRA to enable importation of an unregistered medicine and are meant to be used in exceptional circumstances to remedy the need for an unregistered medicine, such as when there is a shortage of the registered product.

While Vertex has not confirmed to Spotlight or stated publicly the price of Trikafta for people living in South Africa, Nel and Doctors Without Borders’ Candice Sehoma told us that the company is charging around R400 000 ($22 000) for a year’s supply of the medicine.

While still unaffordable for many and much higher than the estimated cost of manufacturing, the R400 000 price is drastically lower than the R5.5 million price charged in the United States and originally feared for South Africa.

It seems improbable that Vertex would have offered the much reduced price to people living in South Africa had Nel not launched the court case

Some medical schemes now paying for Trikafta

As emerged in April this year, Vertex reached an agreement with some medical schemes in South Africa to provide the medicine for people on top-end plans.

“Four private healthcare providers are currently funding Trikafta for eligible patients and we are open for conversations with more insurance companies,” Vertex’s spokesperson Daria Munsel confirmed to Spotlight.

The exact nature of the conversations and/or agreements between Vertex and medical schemes in South Africa however remains somewhat unclear.

Discovery Health‘s CEO, Dr Ron Whelan, told Spotlight it has engaged Vertex about the “benefits available” and “affordable access” of the class of medications that Trikafta falls in but there is “no specific commercial agreement in place” in South Africa.

He noted that Discovery Health Medical Scheme members on the comprehensive and executive plans have a suite of benefits available for the treatment of cystic fibrosis with medicines like Trikafta “of up to R400 000 per annum” for eligible people.

According to Vertex, uptake of its product has been swift and is already starting to make a difference in the lives of people living with cystic fibrosis in South Africa. “Over 100 South Africans with CF [cystic fibrosis] have been prescribed our triple combination treatment in just the first two months of the medicine being available,” said Munsel.

The cystic fibrosis registry, an initiative which seeks to identify and collect data on the outcomes of people living with cystic fibrosis in South Africa, identified 525 people living with cystic fibrosis in the country as of December 2020. Experts believe there are many more undiagnosed cases.

Why did Nel drop the case?

Not only is Vertex’s price for people in South Africa now lower than the 2023 price of Argentinian generics, but the cost of a year’s supply of generic Trikafta from Argentina have increased from around $60 000 to around $100 000 due to hyperinflation in that country.

With Vertex now offering a price lower than the cost of Argentinian generics, Nel decided that her legal case was no longer the best avenue to enhance access to the medicine. The aim of the case “was to get access to the medication… to put pills in patients’ mouths”, she told Spotlight.

Nel said it is now probably better to redirect efforts to getting government at national or provincial levels to buy the medicine for patients in the public sector.

“There is a lot of work still to be done… my efforts are still there, it’s just being redirected,” she said.

“The fact that Trikafta will now be available in South Africa at a much lower price compared to generic versions globally, certainly undercuts the legal case for a compulsory license,” said Tendai Mafuma of SECTION27, a public interest law centre. The Treatment Action Campaign and Doctors Without Borders, represented by SECTION27, were admitted as friends of the court in the case.

Why won’t Vertex register its product in SA?

While much has changed because of Nel’s legal action, Vertex has held fast on its refusal to register Trikafta with SAHPRA.

When asked about Vertex’s plans to register Trikafta in South Africa, Munsel said: “We strongly believe that this [Section 21 Authorisation] is the fastest and most efficient route to sustainable access in South Africa, which does not require a regulatory filing.”

While registering medicines can be onerous and time consuming, it is a routine practice required for pharmaceutical companies to operate around the world. Full registration also typically requires that safety, effectiveness and quality is more closely scrutinised than is the case with Section 21 authorisations.

Nel believes that Vertex has chosen not to register Trikafta in South Africa because of the price transparency requirements embedded in South African law. If other countries know what price South Africa is paying then they may also demand a lower price, she said.

The law requires that there is a transparent pricing system for medicines sold in the private sector, but these requirements do not extend to unregistered medicines imported through Section 21 authorisations, explained Mafuma.

Note: SECTION27 was involved in the court case that is the subject of this article. Spotlight is published by SECTION27, but is editorially independent – and independence that the editors guard jealously. Spotlight is a member of the South African Press Council.

Republished from Spotlight under a Creative Commons licence.

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Categories : COVID Ethics and LawTags :

COVID PPE Supplier Must Face the Music, Court Rules

On By ModernMedia

Pro Secure fails in bid to stop Special Investigating Unit going after it to recover millions of rands

Photo by J Castellon on Unsplash

A company accused of unlawfully benefiting from a multi-million rand contract to supply personal protective equipment (PPE) during the Covid pandemic, has failed in a bid to quash a summons issued against it by the Special Investigating Unit to recover the money.

Pro Secure raised several objections to the formulation of the case against it in the papers. But Special Tribunal Judge Kate Pillay has dismissed the company’s objections and ordered the company to pay the costs.

The SIU investigation uncovered irregularities in the Limpopo Department of Health’s appointment of service providers including Pro Secure, Clinipro and Ndia Business Trading, which resulted in about R182-million irregular and wasteful expenditure. The SIU initiated action against Pro Secure, alleging the company had made “secret profits”, and also instituted civil proceedings against the former head of health in the province, Dr Thokozani Florence Mhlongo.

In October 2022, the SIU secured an order from the Special Tribunal, effectively freezing Mhlongo’s pension fund until the outcome of the civil action against her. Mhlongo resigned in June that year while facing disciplinary charges.

In its application to the Tribunal, Pro Secure challenged the SIU’s legal standing, the fact that the Limpopo health department was not a party to the SIU action. Pro Secure also claimed that there was no allegation that its bid for the contract was not lawful.

Judge Pillay found there was no substance to any of the company’s arguments.

She said the particulars of claim in the civil action set out how Pro Secure had received a payment “significantly exceeding their initial bid”.

She said that according to the SIU, the request for quotation sent by the department was for 5000 automated hand sanitisers. Pro Secure had submitted a quote for 5000 white electronic hand disinfectant dispensers and for 5000 liquid sanitisers, the total amount being just over R7-million. Ultimately, the company had delivered 30 000 dispenser holders at R420 per unit and 900 000 litres of hand sanitiser at R170 a litre and had been paid almost R162-million.

In a statement, SIU spokesperson Kaizer Kganyago said: “This ruling supports the SIU’s stance on the irregular procurement of PPE by the Limpopo Department of Health during the pandemic.”

Republished from GroundUp under a Creative Commons Attribution-NoDerivatives 4.0 International License.

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Categories : Ethics and LawTags :

iTOO Enters Strategic Partnership with Medical Professional Indemnity Specialist EthiQal

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Photo by Sora Shimazaki

iTOO Special Risks, a specialty risk underwriter and EthiQal, a medical professional indemnity provider for specialist doctors, have announced an exciting strategic partnership. This collaboration, backed by Hollard, one of South Africa’s largest non-life insurers, aims to bolster EthiQal’s mission to protect healthcare professionals with robust, reliable coverage and medico-legal support.

Together, the partnership reinforces the comprehensive suite of medical malpractice insurance cover available across the spectrum; iTOO’s focus on allied professionals, General Practitioners, institutions and clinical trials continues and EthiQal remains focussed on specialist practitioners.

Together this partnership unlocks valuable opportunities to achieve the shared vision of strengthening the protection of the medical profession, without which the delivery of high quality healthcare is not achievable.

EthiQal Reinforced

EthiQal’s dedication to safeguarding specialist practitioners aligns perfectly with iTOO’s extensive network and expertise in specialty insurance. This partnership,  ‘EthiQal Reinforced,’ aims to leverage the strengths of both entities to enhance their offerings and deliver world-class products and services to their clients.

“We are saying  this partnership is ‘EthiQal Reinforced’ because while EthiQal is already a strong entity, together with iTOO, it becomes even bigger and stronger,” says Justin Naylor, CEO at iTOO. “iTOO’s extensive network and resources bring additional and complementary skills and capabilities to support EthiQal and its customers.”

Naylor further elaborates, “We have a 20-year track record and well-established risk underwriting capability with a market-leading diverse product range, backed by a complete cradle-to-grave infrastructure. This partnership combines the expertise and track records of both iTOO and EthiQal, reinforcing their excellent offerings.”

EthiQal’s Vision and Strengths

Alex Brownlee, CEO of EthiQal, highlights the alignment of principles and vision that initially brought the two parties together. “iTOO brings a legacy of deep insurance expertise, an extensive network, and additional skills that complement our own. This partnership provides enhanced financial backing, stability, and reliability,” says Brownlee.

Brownlee emphasises the focused and niche market that EthiQal serves, which requires leading risk management support. “Medical malpractice, particularly in fields like obstetrics, spinal surgery, neonates and neurosurgery, involves high risks and long-duration claims. This has driven us to develop deep expertise and understanding of the medico-legal landscape,” he notes.

EthiQal’s team includes a dedicated clinical team, an in-house legal team available for urgent advice and legal support, and personalised quality service. Brownlee assures that the partnership will not change the way EthiQal does business, nor change its products or services, but will reinforce and support the dedicated and steadfast EthiQal team in their commitment to support doctors.

Financial Resilience and Support

EthiQal has strong financial capacity, with a Solvency Capital Requirement above 120%, well beyond the regulatory 1-in-200-year event solvency requirement. The firm enjoys continued financial backing from Dr. Christo Wiese’s Titan Group and reinsurance cover from Lloyd’s of London. Along with iTOO and Hollard, this combination offers improved financial support, stability, and reliability “for our clients’ benefit”, Brownlee stresses.

“EthiQal offers incredible value for medical specialists, and Titan will continue to invest significant resources to build EthiQal’s capacity to measure, mitigate and absorb medical malpractice risk. Alex Brownlee and the team’s drive and capability is what attracted us to the business and what will ensure EthiQal continues to offer value to its policyholders and broker partners”, says Titan’s investment executive Zac Pitsillis.

Engagement and Education

Brownlee also confirmed that EthiQal will remain actively involved in the medical community through conferences, presentations, and educational grants. “Over the last 2 years in particular we have been extremely active in sharing our knowledge and insights, aiming to support doctors and their medical societies.”

Commitment to Quality and Service

“This partnership with iTOO, backed by Hollard, reinforces the quality and value of EthiQal’s products and people, demonstrating confidence in EthiQal’s future and the team that makes it happen,” Brownlee concludes. “The alignment in our values, vision and approach to clients is a critical reason why this partnership is ideal.”

Categories : Ethics and Law Medical IndustryTags :

High Court Ruling Strikes Down Key Part of NHI Act

On By ModernMedia
Photo by Tingey Injury Law Firm on Unsplash

A key part of the National Health Insurance Act is the requirement of private healthcare facilities to obtain a Certificate of Need (CON) in order to practise. Now it, this component has been struck down by a Pretoria High Court judge. Judge Anthony Millar struck down the Act’s key section, saying that it was “akin to an attempt to indenture the private medical service in the service of the state”.

The case had been brought by the Solidarity Trade Union, the Alliance of South African Practitioner Associations, the South African Private Practitioner Forum, the Hospitals Association of South Africa (HASA) and a number of healthcare providers and owners of healthcare establishments.

Sections 36 to 40 of the NHI Act would introduce a Certificate of Need (CON) scheme, essentially tying down doctors to a specified geographical location, which would be the only location where they could render their services.

It is declared that sections 36 to 40 of the National Health Insurance Act 61 of 2003 are invalid in their entirety and are consequently severed from the Act.

Judge Anthony Millar’s ruling

Any new healthcare facility would have to apply for a CON, which would be valid for 20 years. Existing facilities would have two years’ grace period to apply. This would applicable to hospitals, clinics, pharmacies and even to private rooms set up within the home of the practitioner. Operating without one would be a criminal offence – punishable with a fine, five years in prison or both.

It had been argued that because the regulations for CON had not been promulgated, the applicants’ argument was “hypothetical” and not “crystallized”. In Tuesday’s ruling, Judge Millar cited previous rulings and the constitutionality of the matter was still worth testing.

The CON scheme was extensive, Judge Millar noted, and would impact not only healthcare practitioners who worked in healthcare facilities and their employees, but also “juristic persons“, ie corporations or other organisations that can be legally liable.

Read the judgment here

‘A blunt instrument’

In terms of its constitutionality, the applicants’ argument was that, “at least six constitutional rights are infringed. They say it tramples on their rights including where they want to reside, send their children to school and the communities they belong to.”

Judge Millar noted, would mean that setting up a hospital was a hefty investment of R500 million or so, and there was no provision any support. Taken together with the 20-year CON validity, would serve to discourage private investment and became a “blunt instrument” with which the Director-General of Health could control private healthcare in the country.

Even though this provision was ostensibly to serve many, this could not come at the cost of individual freedoms, among them Section 22 of the Constitution which provided for the freedom to choose an occupation within the rule of law.

“The scheme is silent on the extant rights of both the owners of private health establishments, private healthcare service providers and private healthcare workers. Such extant right include their integration and professional reputations in the communities which they presently serve together with the significant financial investments and commitments made by them to be able to render the services that they do.”

Since health establishments are purpose-built and hard to convert for other use, this constitutes a de facto deprivation, he wrote.

“It does not behove government in pursuing transformation, to trample upon the rights of some ostensibly for the benefit of the many.”

‘Effective indenture’ of private healthcare

While the legal teams for President Cyril Ramaphosa, the minister of health, Dr Aaron Motsoaledi, and the director-general of health, Dr Sandile Buthelezi, argued that the public healthcare sector was overburdened, Judge Millar replied that this amounted to the effective indenture of the private healthcare system.

Among other problems, contesting CON issuance was without recourse and by turning down a certificate the DG could essentially deprive the affected parties of income, as doing so would see them prosecuted under Section 40.

The ruling was welcomed by healthcare professional associations.

As reported in the Daily Maverick, Solidarity chief executive Dr Dirk Hermann said, “This judgment is a major blow to the total NHI [National Health Insurance] idea, as the principle of central management is a core pillar of the NHI Act itself. A more extensive consequence of this ruling with regard to the certificate of need is that parts of the NHI Act are now probably also illegal in principle.

“The NHI in its current format cannot be implemented as the essence of the NHI is central planning – and this has now been found unconstitutional.” 

In a statement, HASA said that it regretted that the matter had to come to court. “We would have preferred achieving the objective of a stronger health system through a negotiated and collaborative effort to increase the number of medical students and nurses in medical training facilities to address the healthcare system’s needs,” the association stated.

Categories : Ethics and LawTags :

Probe Clears Most Gauteng Care Organisations

On By ModernMedia

Handful of organisations remain under investigation

Photo by Scott Graham on Unsplash

By Daniel Steyn, Joseph Bracken and Raymond Joseph

Most of the non-profit organisations that were flagged in a forensic audit by the Gauteng Department of Social Development have been cleared of all findings and have started to receive subsidies from the department again.

The forensic audit, announced by Gauteng Premier Panyaza Lesufi during his 2023 State of the Province Address, was a key intervention by former social development MEC Mbali Hlophe and aimed to uncover fraud and corruption in the non-profit sector. The department pays about R1.9-billion in subsidies to more than 700 non-profit organisations every year.

In a list circulated to affected organisations on Wednesday by the department, which GroundUp has seen, 34 of the more than 50 organisations that had audit findings against them, have been cleared after they rejected the findings. The organisations, which include drug rehabs and women’s shelters, have had to endure three months without any funding since the start of the new financial year on 1 April.

Read the list

According to the list, six organisations are yet to receive the final outcome of their submissions. These include the training academies Daracorp and Beauty Hub, which collectively received R114-million in funding in 2022 and 2023. There are still unanswered questions about why these two organisations received so much in subsidies while budgets were cut for other organisations that care for people with HIV and older persons.

Social work organisation Kitso Lesedi Community Development, which has rejected the findings against them, is also still awaiting the final outcome of their submission.

The department has decided to “uphold” the decision not to fund two organisations, according to the list. These are Life Healthcare’s non-profit drug rehab in Randfontein and Tembisa Society for the Care and Welfare of the Aged. GroundUp understands that Tembisa is taking steps to appeal the decision.

Also, eight organisations are part of a Hawks investigation, according to the list. These include several foodbanks and Godisang Development, which has historically played a key role in the department’s Welfare to Work programme.

The department has not responded to GroundUp’s questions on the Hawks’ investigation, and the Hawks told us that it will be difficult to answer questions without a case number.

According to the department, 14 officials have been suspended since the forensic audit was launched, but their identities, the allegations against them, and the status of their disciplinary processes remain unknown.

Total Organisations on List51
Organisations cleared34
Hawks Investigation8
Organisations yet to receive outcome6
Organisations that did not make submissions
(But one of these organisations, Carroll Shaw,
claims it made a submission)		2
Organisations that remain unfunded due to
investigation (decision upheld after submissions)		2

The forensic audit caused catastrophic delays in this year’s funding adjudication process, forcing hundreds of organisations to survive the first two months of the 2024/25 financial year without any funding. Some organisations retrenched staff, scaled down services or even shut down.

The department decided to centralise the process of allocating funds and appointed external adjudication panels. The department claimed this was because of findings by the Auditor-General, but the Auditor-General told GroundUp no such findings or recommendations were made.

The centralisation delayed the allocation of funds and the whole process ultimately collapsed, with the department deciding to simply extend contracts with organisations already signed in 2023.

The department did not respond to GroundUp’s questions.

Organisations vindicated

Organisations that have been cleared and have received findings told GroundUp that they feel vindicated and relieved.

Derick Matthews, CEO of Freedom Recovery Centre, which provides in-patient drug rehabilitation, told GroundUp that they have started admitting patients again and ordering supplies.

“Crazy days, but super excited,” Matthews said.

Mpule Lenyehelo, director of A Re Ageng, which runs women’s shelters and gender-based violence care centers, says it will take time to repair the relationship with the department.

“I am very angry and disappointed with the department,” Lenyehlo said. “Their allegations were unfounded and could not be substantiated as we have always received positive feedback from their monitoring and evaluation team. What the department seems to conveniently forget is that the organisation is providing essential services to the most vulnerable people in the community as well as 114 staff members in terms of job creation.”

One organisation caught in the cross fire was MES. The organisation never appeared on the list of organisations under investigation but nevertheless received a letter saying that there was a finding against them and that they would not be receiving funding. The finding was that they had not spent their full subsidies.

Leona Pienaar, CEO of MES, said she was confused because there was no money left over. She wrote to the department asking for clarity but received no reply. She then wrote to FSG Africa, the forensic auditing firm that was appointed to conduct the probe. FSG Africa told Pienaar that they made no findings against MES. After meeting with the department, MES finally had their funding for 2024/25 reinstated.

Lisa Vetten, chair of the Gauteng Care Crisis Committee, which has led litigation against the department and organised pro-bono legal assistance for affected organisations, says that she appreciates recent efforts by the new MEC Faith Mazibuko and some officials in the department to resolve the issues faced by the nonprofit sector.

“Corruption deprives people of services and has no place in the social care sector. But serious questions should be asked about the value of this audit, which not only came at great cost to organisations and their beneficiaries, but also, up to this point, hasn’t yielded much of substance,” said Vetten.

Categories : Ethics and Law HospitalsTags :

Court Finds Netcare Failed to Protect Employee Against an Abusive Surgeon

On By ModernMedia

Operating theatre manager wins her case

Photo by Bill Oxford on Unsplash

By Tania Broughton

The former manager of an operating theatre at Universitas Hospital has successfully sued Netcare for failing to protect her and take action against an abusive surgeon because, she claimed, it was well known that he was a “money spinner” for the company.

Tilana Alida Louw also sued Dr Stephen Paul Grobler but, following his sudden death in June 2022, entered into a confidential settlement agreement with the executor of his estate.

She then pursued her case against Netcare Universitas Hospital.

In a ruling this month, Bloemfontein High Court Judge Ilsa van Rhyn directed Netcare to pay her R300 000 for damages, past and future medical expenses, and to pay part of her costs on a punitive scale.

Louw was appointed as surgical theatre manager at the hospital in 2005. Her role was to oversee and manage operating theatres and theatre staff and monitor patient care.

At that time, she was warned by the then hospital manager, and others, that Grobler had an “aggressive type personality”.

She said she soon experienced first hand his temper tantrums.

In her claim, she said he had verbally abused her continually, hurling profanities, insults, using blasphemous language and obscenities at her in the presence of other operating theatre staff and even members of the public.

She said Netcare had failed to come to her assistance, in spite of her numerous requests and complaints.

Netcare had also failed to act against Grobler, even though it was common knowledge that he behaved this way.

Louw alleged that Netcare had failed in its legal duty to create a work environment free from verbal abuse and intimidation and to take reasonable care of her safety and protect her from psychological harm.

As a result she was humiliated, degraded and suffered shock, anguish, fear and anxiety. She experienced post-traumatic stress syndrome.

She wanted to be compensated for this. And she wanted Netcare to publish a written apology in a local newspaper.

Netcare defended the action. It denied that it had breached its duty to Louw and said it had taken action against Grobler.

After Louw and her witness, labour law expert Professor Halton Cheadle, testified, Netcare offered to pay her for damages and to apologise.

Louw accepted the financial offer, but she was not happy with the wording of the apology and the scale of costs tendered.

And so the trial continued.

Read the judgment

Judge van Rhyn said Louw had testified that her complaints and those of others had been largely ignored by management.

“She explained that several of the scrub nurses refused to work with Dr Grobler and she would step in and assist him during surgeries. Her sense of duty and pity for the patients, many of them being cancer patients who were in dire need of urgent and timeous surgeries, caused her to bear the brunt and endure the constant abuse.”

Louw had said she and other personnel were “not allowed” to lay complaints against Grobler because he was a “so-called money-spinner for Netcare”.

Cheadle, in his evidence, said given the number of grievances lodged against Grobler and given Netcare’s professed zero-tolerance approach to harassment, a reasonable employer would have warned Grobler about his behaviour after the first complaint and would have terminated his contract at the very least, after the third complaint.

Judge van Rhyn said Netcare’s offer of damages during the trial had been made after Louw had endured years of abuse at the hands of Grobler and eight years of litigation.

“I also agree with argument on behalf of the Plaintiff (Louw) that Netcare evidently allowed its employees to be abused by Dr Grobler for its own financial interests. Netcare was acquainted with Dr Grobler’s disgusting behaviour even prior to her (Louw’s) appointment as the unit manager,” she said.

This conduct was deserving of a punitive costs order, the judge said.

Louw had rejected the proposed apology because it contained the words “we apologise sincerely that you felt that Netcare did not sufficiently support you”.

The judge said she agreed with Louw’s perception that this did not, in its plain and ordinary meaning, convey a sincere regret and remorseful apology.

She said she had been informed during argument that Netcare had published the apology in the local newspaper.

However, she said, she would not make any order regarding the apology, because it would not be lawful in a case which was not based on defamation.

Republished from GroundUp under a Creative Commons Attribution-NoDerivatives 4.0 International License.

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Categories : Ethics and LawTags :

Discovery Health says Road Accident Fund in Breach of Court Order

On By ModernMedia
Photo by Bill Oxford on Unsplash

By Tania Broughton

Discovery Health had an “overwhelming case” against the Road Accident Fund (RAF) and its CEO Collins Letsoalo showing it was clearly in breach of a 2022 court ruling that the fund was not allowed to withhold payments for past medical expenses from road accident victims who had been paid out by their medical schemes.

This was the submission of Advocate Wim Trengove, on behalf of Discovery, at a special court hearing seeking to hold the fund and Letsoalo to account.

While initially Discovery, in its application before Gauteng Judge President Dunstan Mlambo and judges Ingrid Opperman and Noluntu Bam on Thursday, were seeking orders of contempt of court, Trengrove said it was now only seeking an order of “breach” and to compel compliance.

He said this would give Letsoalo a further opportunity to “have his say” as to why he should not be found in contempt and possibly jailed for it.

In 2022, Judge Mandla Mbongwe ruled in the Pretoria High Court that a new directive – effectively refusing to pay for past medical expenses of those claimants already paid out by medical aids – was unlawful.

The RAF was unsuccessful in its appeals to both the Supreme Court of Appeal and the Constitutional Court.

Read the original Pretoria High Court judgment here

Trengove argued that the RAF had continued to implement the directive, regardless of the court ruling.

“We have a list of about 20 cases, all of which are in line with the Mbongwe judgment,” he said.

After the apex court refused to grant the RAF leave to appeal the Mbongwe judgment, two further “directives” came to light in which the fund seemingly sought to side-step the legal implications of the Mbongwe judgment.

Trengove said “directive two” was also raised once in litigation and was rejected. Under this directive, the fund had argued that it should not have to compensate medically insured victims if they had been paid out in accordance with prescribed minimum benefits.

“Then it produced ‘directive three’ which is equally spurious,” he said.

This was based on a section of the RAF Act, which prohibited compensation to anyone who had agreed to share compensation with another person. The fund argued that the agreement between a medical scheme and its members fell foul of this.

“But that agreement is merely an agreement to avoid double-compensation. That the medical aid pays upfront and if the member recovers (from the fund), then that member will reimburse the medical aid,” Trengove said.

He said regardless, the new directive did not absolve the fund from complying with the Mbongwe ruling.

That ruling, he said, confirmed that a claim against the fund is a claim in delict: the fund steps into the shoes of the wrongdoer, and “the perpetrator is not entitled to benefit from the insurance proceeds of the victim”.

“Our courts have held that medical schemes, for the purposes of claims, are akin to insurance, and claims cannot be taken into account when determining the quantum of liability,” Trengove said.

RAF denial

But advocate Cedric Puckrin, who appeared with advocate Gerhard Cilliers for the fund, said Trengove had argued his case “with rose-coloured glasses”.

Cilliers said the fund was entitled to implement the first directive during the period when the appeal process had been underway.

He said Discovery was arguing a new case, not an enforcement of the Mbongwe ruling, and had based it on ten examples where the fund had responded to letters of demand by claimants, indicating that it would dispute liability for any claim for past medical expenses.

Cilliers suggested that Discovery had no standing in court, and that it was up to individual claimants to take their matters to court.

He also said the ten examples did not show that the fund was in breach.

“It is not Discovery’s case that RAF is enforcing the 2022 directive. It wants you to go further and ask you to find that the subsequent directives are the same. And we submit that is not the proper process to follow. It is an abuse of the process.”

Advocate Puckrin argued that while the third directive might be “entirely wrong”, it was a different directive which could only be set aside by a separate application to the court.

He said it could not be considered a “breach” of the Mbongwe judgment.

But Judge Opperman suggested that it was just a “new piece of paper” dealing with the same issue.

“But it’s based on a new principle,” Puckrin said. “It’s far more limited.”

In reply, Trengove said the Mbongwe judgment has set out a statement of “general principle” that the fund could not free itself from paying full compensation to medical aid members.

He said Letsoalo and other fund officials had made a series of public statements which reflected their “unlawful disdain” for the ruling.

“A delinquent public body cannot insulate itself against compliance with a court order by adopting a directive in effect not to comply with it. It is contrary to the rule of law.”

Judgment was reserved.

Republished from GroundUp  under a Creative Commons Attribution-NoDerivatives 4.0 International License.

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