Authored by Patrick Bracher.
The applicant, who applied for review of the decision of the Council for Medical Schemes, had developed a product providing for primary healthcare services to be rendered against a monthly payment. The product included services relating to medical emergencies and mental health counselling which cannot be described as preventative, but the core focus was preventative medicine. The court held that the product fell within the definition of “business of a medical scheme” in the Medical Schemes Act 1998 and contravened that act.
The defined basket of services included unlimited consultations with a GP, access to medical records, a comprehensive bi-annual primary health examination with a GP, ECG’s, blood analysis, chronic disease management and other services. The applicant sought to distinguish its model from medical scheme cover by contending that it did not pool risk as a medical scheme does. Secondly, it stated that its core focus is preventative medicine while a medical scheme’s core focus is curative medicine. Unlimited visits to a medica practitioner were said to distinguish it from medical schemes. It was argued that medical schemes are not profit driven whilst by contrast the applicant was driven by the goal of deriving profits. The applicant also contended that a medical schemes has no relationship with the medical professionals who provided the services whereas the applicant did. The applicant relied on there being no third party payments, billing or co-payment associated with the services, no mandatory medical expenses, and similar costs for both rich and poor.
According to the judgment, the product filled the definition in the MSA of “business of a medical schemes” which includes providing for the obtaining of any relevant health service and granting assistance in defraying such expenditure or actually rendering the relevant health service in return for a premium or contribution. The applicant was receiving a “premium or contribution” in return for providing the service.
The court did say that the matter demonstrates the difficulty in creating and lawfully offering new products in the healthcare sector. The sector is highly regulated, and there are circumstances where meritorious new offerings may falter due to the constraints imposed by statutes such as the MSA. However in the absence of a challenge to the relevant provisions of the MSA, the law needs to be complied with.
The applicant had applied for an exemption from the provisions of the Medical Schemes Act which was refused by the Council for Medical Schemes and its Appeal Board. The court pointed out that the application was based on a circular argument. The applicant’s starting point was that it did not require an exemption because it is not a medical scheme but that, if this position is wrong, it sought an exemption under section 8(h) of the MSA. The court found no exceptional circumstances justifying an exemption and the application for review failed.