Doctors refusing to treat injured employees due to calamitous Compensation Fund

18 May 2015

Note to editors: This statement was delivered to members of the media at a press briefing hosted by DA Shadow Minister of Labour, Ian Ollis MP, DA Shadow Minister of Health, Dr Wilmot James MP, and DA Shadow Deputy Minister of Labour, Michael Bagraim MP, this morning. A press pack with supporting documentation can be accessed here.

Today we announce the findings of a DA-mandated research investigation into the current state of the Workmen’s Compensation Fund and its effect on access to healthcare for injured South Africans in need of medical care.

The results of the research make one thing clear – the Compensation Fund has failed injured employees and medical practitioners across the country. The Fund is in utter disarray and on the brink of administrative collapse.

Our research has shown that across the country doctors and medical practitioners are turning patients away due to the Fund’s failure to settle their claims. The Compensation Fund has become the primary reason why thousands of South Africans are denied healthcare and medical attention.

The research comprises of a host of surveys conducted by prominent employer organisations, medical associations and private homecare companies. These include the South African Medical Association (SAMA), National Employers Association of South Africa (NEASA), Independent Practitioners Association Foundation (IPAF) and Qualicare.

In total, over 1200 individuals were surveyed, comprising of doctors, hospital staff, and employees. Here are some of the findings:

The first significant finding is that many doctors and medical practitioners are not being paid for treatment and care given to injured workers. Some of these medical practitioners have been waiting for close to a decade to receive the amounts due to them.

According to SAMA’s survey, which was conducted amongst medical practitioners in Gauteng, 65% of those surveyed stated they were adversely affected by non-payment of Compensation Fund bills, with the average amount outstanding at R 894 818.58 per doctor.

These figures are astronomical, and could easily result in small medical practices having to shut their doors – resulting in jobs losses and less opportunity for medical care for the public.

CompSol, an intermediary that handles between 40% and 60% of all medical claims against the Fund, indicated that as of April 2015, unpaid debt owed to their members by the Fund was at R 555 982 029. Moreover, 91 000 claims have not been accepted, meaning that not one of those 91 000 injured workers are able to claim compensation for any medical treatment they have received. Most injured workers cannot afford the treatment they require, leaving them in a dire situation.

The result of this non-payment by the Compensation Fund is that doctors and medical practitioners are simply turning Compensation Fund patients away in order to avoid the administrative mess and the risk of not receiving money owed to them.

NEASA’s survey revealed that of the 640 employees surveyed, 254 (39.69%) have at least on one occasion been turned away by a doctor due to their case being Compensation Fund related. Moreover, and of particular concern, is that this is not limited to private healthcare. A total of 14.5% of injured employees surveyed by NEASA stated they had been turned away by government hospitals as well. That is simply unacceptable.

According to Qualicare’s survey, approximately 65% (200 out of 300) doctors indicated they will not attend to Compensation Fund patients. Many of these doctors have resorted to charging patients or employers directly at the time of service, and recommended they claim from the Fund themselves.

Some doctors have gone to great lengths to avoid dealing with the Fund, which includes sending out letters precluding Compensation Fund patients from receiving medical care from their practice, as this simply translates into a financial gamble for them.

What makes this matter of even greater concern is that every South African employee pays for the cover the Fund is mandated to provide. Every month a deduction is taken off every employee’s salary and directed into the Fund’s purse. Yet injured workers do not receive the cover they are made to pay for.

This is tantamount to fraud on the backs of the public, and the government cannot be trusted with playing this role any longer.

While the majority of those who are denied compensation for injuries cannot afford to challenge the matter legally, associations and organisations have done so on their behalf. Last year CompSol, on behalf of its members, applied for an execution order against the Department of Labour and the Compensation Commissioner for outstanding payments, and on 25 March 2015 default judgment was awarded to the value of R16.3 million. Predictably, this has still not been paid by the Fund.

While the results of the DA-Mandated surveys are a small sample, covering just over 1200 people, one can only imagine the impact this chaos is having on the millions of injured employees seeking medical care throughout the country.

The Compensation Fund is broken and in need of immediate government attention. In the past there have been numerous attempts to revitalise the Fund. These include a R1.2 billion contract with Siemens for a new electronic system to simplify claims, and more recently the utilisation of an electronic claims management system, supplied by Umehluko, which was intended to put an end to manual processing of claims.

However, all of these attempts to turn the Fund’s fortunes around have failed miserably. Media reports last week corroborate our findings, suggesting that the situation is worsening as the Compensation Fund is in financial ruin, with claims management companies suspending prefunding services because of the fund’s failure to make existing payments.

The Compensation Fund has become one the greatest barriers to medical care for injured South African workers. The institution has always been a slow lumbering giant, and is getting worse with each passing day.

The DA recognises that this matter cannot be ignored any longer. While we recognise the need for government mandates, we see the massive value in public-private partnerships and the much more efficient private medical aid and pension schemes available in the country.

The Compensation Fund essentially consists of a medical aid and a pension scheme. We therefore call for the privatisation of the medical aid division of the Compensation Fund as an immediate remedy. This will bring about the efficiency the Fund so desperately requires.

We will be presenting our submission, along with the supporting research, to the Minister of Labour in the next few days, and pushing for a timeline for a private administrator to be appointed to manage this fund. Parmed, the medical aid for MP's and MPL's, is managed quite successfully by a private administrator in exactly this way.

A society is judged by the way it treats its weakest members. Employees, who are injured while at work and cannot afford the required medical care fall squarely within this definition.

For an ANC government that is so vocally pro-workers’ rights, the disarray that is occurring at the Compensation Fund is both shameful and embarrassing.

The DA will continue to ensure that all South Africans, including injured workers, have access to the medical care for which they pay for every month.

Statement issue by Ian Ollis MP, DA Shadow Minister of Labour, May 18 2015