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Investigative report finds some evidence of medical schemes’ racial bias

(Photo: Unsplash / Bill Oxford)
By Ruan Jooste
19 Jan 2021 10

The findings of an investigation into allegations that practitioners of colour were being discriminated against by some South African medical schemes and administrators were released on Tuesday.

After an unsuccessful interdict application by the Government Employees’ Medical Scheme (Gems) and the Board of Healthcare Funders (BHF) on Tuesday to block the release of a report into the alleged racial bias of medical schemes, the report was released for public comment a few hours later. The schemes involved now have six weeks to have their say.

The section 59 investigation report, which was commissioned by the Council for Medical Schemes (CMS), was released at a virtual press conference after the Pretoria High Court dismissed the application by Gems and the BHF to block its release. The court ruled that the application lacked urgency.

The chairperson of the independent review panel, Tembeka Ngcukaitobi, SC, presented the findings of the investigation into allegations by the National Health Care Professionals Association (NHCPA) and advocacy group Solutionist Thinkers that practitioners of colour were being discriminated against by some South African medical schemes and administrators.

Ngcukaitobi stated that the panel was mandated to investigate two main issues: whether there is racial discrimination by schemes against black healthcare providers and whether black providers were being treated procedurally unfairly.

“The evidence presented by complainants and the schemes was important for the panel’s inquiry regarding how the schemes and administrators’ risk management systems, more particularly their fraud, waste and abuse  (FWA) systems, worked in practice,” he added.

The panel appointed an independent specialist in statistics and data analytics as well as legal experts to assess the outcomes of the FWA investigation processes by the three main administrators – Discovery, Medscheme and Gems – and to provide assistance with the legal framework to test unfair discrimination and the principles of implicit racial bias.

The panel found that between 2012 and 2019, for the reasons provided in this interim report, a substantial difference in FWA outcomes between black and white practitioners was evident. It did, however, not find any evidence of explicit or intentional racial bias in the algorithms and methods that the administrators and schemes use to identify FWA. 

“There is no explicit use of race in the analytics process,” the report states. “This does not mean that the process is ‘race-blind’. It may be the case that certain factors used, or areas prioritised are asymmetrically distributed by race and that this may produce racially biased outcomes.

“There is a substantial difference in FWA outcomes between black and non-black practitioners over the period from January 2012 to June 2019. Over this period, black practitioners were 1.4 times more likely to be classified as having committed FWA than those identified as not black. The probability that this distribution occurred by chance (ie, that there is no correlation between racial status and FWA outcomes) is for all practical purposes zero.”

There are clear differences in the scale of racial discrimination between the three medical schemes, with Discovery 35% more likely to identify black providers as having committed FWA, while Gems was 80% more likely to identify black providers as guilty of FWA. Discovery and Gems are the two largest medical schemes in South Africa.

Although each of the three schemes and administrators presented expert evidence to contest the findings during the inquiry, the panel found that the disproportionate impact on black providers, which amounts to unfair racial discrimination, remains.

The panel also found that some of the current procedures followed by schemes to enforce their rights in terms of section 59 of the Medical Schemes Act are unfair, but this was unrelated to race and applies to all demographics, Ngcukaitobi says.

The findings are serious and far-reaching, he says, and the panel stressed that it had not found evidence of deliberate unfair treatment. 

The panel expects constructive engagement with all stakeholders with the findings and recommendations in the report, rather than a conclusive response, the report states. 

“Our findings will hopefully provide a basis for the necessary reconstructive work which must be undertaken by the role-players in the medical schemes industry.”

Katlego Mothudi from the BHF told eNCA that, “The parties should have been given a chance to see the report before its release.”

However, Ngcukaitobi has made it very clear that the findings stipulated in the report were still in interim form, and their publication was only to obtain further comment from related parties. The closing date for comments is Friday 5 March. DM/BM


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All Comments 10

  • “The findings are serious and far-reaching, he says, and the panel stressed that it had not found evidence of deliberate unfair treatment.” Doesn’t make sense.

    • It means that racial bias exists, which is a serious social issue. It is also far reaching – more than 80% of FWA at Gems for example, but it was not found to be an intentional practice, more of a structural issue. But a injustice by way of bad private practice, still has a social impact and should be remedied.

  • Could it be simply that more FWA (fraud, waste and abuse) is actually committed by Black practitioners ?
    Could it be that there are more Black practitioners involved with GEMS (Govt employees) than Discovery ?
    Statistics are normally ‘colour-blind’ which is implied in this report.

  • A little more detail pls on the numbers. How many doctors of what race were accused of what? The ratio of demographics of actual cases of fraud versus cases of mere investigation would also be important to make comparisons. At this point this is no report, just an accusation, and one with little data to support it.

  • Your headline “Investigative report finds some evidence of medical schemes’ racial bias” is misleading. “It may be the case that certain factors used, or areas prioritised, are asymmetrically distributed by race and that this may produce racially biased outcomes” – ‘may be’ but no evidence thereof. Certainly not to say that such factors may not come to light. With the racially charged history in this country I certainly wouldn’t discount the possibility and work should continue to ensure equality. However, right now what I’m reading is that the report found more fraud was identified by medical schemes in the race comprising the majority of our population (which would be statistically expected) and therefore, although no actual biased process was identified, this must mean that racially biased processes exist. That sounds like an assumption and not a finding. I would expect journalists to treat any report commissioned by a government entity that has a clear alternative motive and where the researchers do not want the subjects of the study to review the findings prior to public release as suspect. Peer review and right of response are the basic requirements of legitimate research and I look forward to reading the medical scheme responses.

  • This report sounds very much like there like CMS, NHCPA and “Solutionist Thinkers” wanted to make a point, and twisted the stats to support their argument. My initial take is that an “independent review panel” is seldom unbiased or independent. Quite frankly these constant racial bias witchhunts are getting exhausting.

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