How COVID can cost you P300,000
Mbongeni Mguni | Friday June 11, 2021 14:15
A memo, apparently leaked, from one of the country’s top private hospitals recently detailed the cost of COVID-19 hospitalisation. In the memo, the hospital was instructing its staff that self-financing patients were required to pay deposits of P300,000 for COVID-19 hospitalisation. Patients on medical aid services were required to pay between P260,000 and nothing, with the amounts based on what cover they would receive from their medical aid providers.
Experts say while hospitalisation in government facilities, including the referral centre at Sir Ketumile Masire Teaching Hospital, appear ‘free’, the real cost to government is reflected by amounts such as the P300,000 that private facilities are demanding.
With COVID-19 cases returning to the 300-per day range and mortalities remaining stubbornly high, the leaked memo has sparked a national conversation around health costs and the pandemic.
Is someone cashing in on the crisis or are the costs appropriate? What is the role of medical aid if a patient is required to pay up to P260,000 while also faithfully paying their subscriptions?
Moraki Mokgosana, chief executive officer at BOMAID, says the daily costs of being hospitalised with COVID-19 can go up to P13,500 and this excludes other treatments that a patient may be required to undergo.
BOMAID is the only medical aid providing full coverage for COVID-19, from testing to full treatment, including evacuation from home, in-home care during isolation and psycho-social support during recovery.
In the leaked memo, BOMAID was noted as providing full coverage meaning patients would not be required to pay from their pockets for hospitalisation, compared to others coughing up deposits of up to P300,000. For private hospitals, medical aid societies like BOMAID provide hospitals with the ‘bulk market’ of good paying patients, as opposed to self-financing patients who may run out of funds and have to be pursued legally.
“Hospitalisation costs per day vary depending on the level of care needed by the patient,” Mokgosana explains.
“Currently, the minimum daily cost of care starts at P1,000 with hospitalisation costs ranging between P3,500 and P13,000 per day.
“There are, of course, other costs like professional fees, the costs of diagnostics (like blood tests, x-rays and scans), pharmacy costs and consumables.
“Because of the nature of the disease and its impact on other organs, we defer to the judgement of the treating professionals to make the necessary clinical calls to preserve life.
“In many instances, there is also a need for collaboration between specialists to achieve the best clinical outcome.”
Mokgosana says while some patients may spend only a day in hospital, others can go for months. The costs that the hospital incurs in discharging its services can escalate quickly and in fact, the nature of COVID-19 treatment is another factor in the high costs.
“Because of the safety measures and the risks of infection at the facilities, the cost of doing business has escalated and this, in turn, has put pressure on funders,” the CEO explains.
“While this invariably gravitates to a financial discussion, we must not lose sight of the toll that these pandemics take on our partners in the healthcare profession.
“There are many who have given up their lives in the line of duty and we must always spare a thought for them and their families.”
Other experts say the novelty of COVID-19 and the need for specialised treatment methods and expertise is part of the reason behind the high costs. In addition, the fact that Botswana has a shallow pool of experts in this specialised area of treatment means higher costs for any institution or patient engaging the services.
But then, how come some medical aid providers are able to fully cover their members, while others are not?
With COVID-19 spreading, many medical aid society members are looking to their providers to take the load and help them out, especially since other incentives such as those for not claiming in a year, are absent in the local market.
“As the oldest medical aid, we were around during the times when Botswana was ravaged by the AIDS pandemic and we constantly remind ourselves of this inherent risk and do scenario planning for these kind of situations,” Mokgosana says. “With this in mind, we keep a close eye on our solvency position and ensure that we have adequate reserves.
“The importance of ensuring that we have a strong balance sheet is to enable us to react swiftly and not burden our members with requests for premium increases and that we avoid holding back when the beneficiaries need our support most. “In essence, we need to ensure that we have the discipline to save for a rainy day and, in COVID-19, the rainy day is here.”
The CEO explains that BOMAID has been able to secure arrangements with partners such as hospitals through transparent negotiations to understand “their concerns”. However, Mokgosana also reveals that because of BOMAID’s size and the amount of business it does with its partners, it is able to leverage on its bargaining power.
“We also try to turn around payments to our partners as quickly as we can and avoid being demanding while straining their cash flows.
“In so doing, we always seek win-win and that helps to maintain a healthy relationship and to get alignment.
“I think it’s safe to say BOMAID, generally, has the richest inpatient and outpatient benefits,” he says.
Mokgosana adds: “While we may not always get the best cost, we are also fortunate to have a very strong balance sheet.
“Our COVID-19 treatment is primarily financed out of our balance sheet.
“Because we do not pay dividend to our members who are the owners of the fund, this is our way of giving them a return on their investment in us over the 50 years that we have been in existence.”
Hospitals are reluctant to discuss their costs for COVID-19 or how they arrive upon them. However, analysts say the figures in the leaked memo reflect the need to cover risks by hospitals.
Normal hospitalisation involves a patient being admitted to hospital, receiving treatment and getting their bill at the end of the treatment. However, with COVID-19 and the high costs involved which most medical aids are not covering, hospitals have been forced to come up with their own arrangements. The large and rising number of patients also means whatever more lenient arrangement hospitals had before, is unsustainable as they incur costs they are struggling to recover.
“When a patient arrives with COVID-19 and without full cover by a medical aid, the hospital has to arrange that deposit assuming the worst-case scenario of the patient spending a long period under treatment,” one analyst says.
“While the patient is hospitalised that deposit will be taking care of them and the range of treatments they require.
“If they are discharged before, whether to go home or to a government facility, the cost up to then is taken from that deposit. “If the deposit runs out, the hospital may ask the patient to top up. It’s about hedging risk.”
BOMAID, meanwhile, has fully covered more than 200 hospital admissions for its members, as well as paying the cost for 5,100 tests. “We also have a home care benefit we have extended to our beneficiaries who are isolating at home with mild to moderate symptoms,” says Mokgosana. “For these, we provide for two doctor visits during the period of isolation and increase as necessary. “We have had over 170 home visits.
“Through Emergency Medical Services, we evacuate members who test positive and have moderate to severe symptoms to hospitals and provide transfer services between hospitals where necessary. “We have evacuated over 220 cases to hospitals to date.”
The medical aid provider has engaged the services of counsellors and psychologists to help members who may need psycho-social support after testing positive for COVID-19. The CEO says the service comes at no additional cost and so far support has been provided to over 40 members.
With cases and deaths on the rise again, the chances of catching the virus will rise. Not everyone will have medical aid cover and not everyone will have the funds to pay for private care. Government facilities will get more congested and healthcare staff will become even more stretched in the public sector.
It would be fitting to say prevention is better than ‘cure’ in this pandemic, but the fact is that because COVID-19 has no cure, while the costs of infection are so high, prevention is best, full stop.