Patients paying for medical kickbacks

May 03 2000

Patients are spending millions on unnecessary medical tests each year - partly because several hundred doctors are being paid to order tests from pathology laboratories.

The Star has obtained documentation which shows that two of South Africa's biggest pathology groups - Ampath and Lancet (Pathcare) - are paying millions to certain doctors in kickbacks each year.

The names of the doctors involved are listed in the documents, which include copies of agreements and forms showing the amounts paid out. These vary from monthly payments ranging from R500 to R40 000 to six-monthly payouts as large as R120 000.

Altogether, they show that, last year, commissions paid to 84 doctors by Lancet averaged R247 000 a month, while 103 doctors referring pathology tests to Ampath received a total of R3,9-million for the year.

The Board of Healthcare Funders estimates that Lancet and Ampath control about 75 percent of South Africa's annual R1,8-billion private pathology market. They are competitors.

The damning documentation is backed up by an industry insider, who has asked not to be named, who showed The Star minutes of a meeting where the concept was discussed.

Kickbacks, according to the insider, centre on two unethical or fraudulent activities:

Some doctors are given financial incentives to maintain or increase the number of referrals.

Laboratories carry out more tests than requested by the doctor or than are medically necessary.

Further proof comes from independent practitioners' associations, which are groupings of private doctors who work together in a loose federation for financial gain.

One of the largest of these, GPNet, indicated in its annual financial statement last year that its revenue included "income from co-marketing and pathology agreements".

According to the statement, GPNet earned R9,4-million from "co-marketing income and formulary income" - terms used to describe kickbacks in medical circles.

An agreement with GPNet is also mentioned in an Ampath pricing list, which shows that Ampath also has agreements with other doctors' groups.

According to this document, Ampath had agreed to pay:

Medicross doctors' grouping 12 percent of turnover, less expenses and consumables.

Clinicross doctors' grouping R15,87 per patient, excluding vat.

NIMPA doctors' grouping 10 percent of turnover.

The turnover refers to income gained from tests.

The practice of paying doctors a commission - or kickback - is considered unethical in medical circles because it gives the doctor an incentive to request pathology tests which are not medically necessary to earn extra money. It is also in contravention of the ethical rules of the Health Professionals Council of South Africa.

But it is so widespread that the Forum of Statutory Health Councils is setting up guidelines forbidding doctors from accepting payment in return for referring pathology tests.

A draft document, drawn up in November last year, states: "Over-servicing by ordering or providing more tests, procedures or care than is strictly necessary is a common problem in modern medicine.

"It is therefore morally hazardous for a healthcare professional to refer patients to a facility or for a procedure in which that professional has a financial interest."

This is backed up by Board of Healthcare Funders head Dr Aslam Dasoo, who said medical aid schemes believed at least 25 percent of all medical aid claims "should not be claimed for".

While the vast majority of doctors were honest, the board received complaints about fraud on a daily basis. Pathology was a "classic example" of how the medical aid tariff system was abused, Dasoo said.

Marie van Drimmelen, a pathologist formerly employed by medical aid society Hosmed as an adviser, said that in spite of strong suspicions, it was very difficult to prove that doctors were over-servicing to obtain kickbacks.

She said that while United States legislation considered kickbacks to be fraud, in South Africa, kickbacks were "considered unethical practice but you can't prosecute someone for paying a kickback".

Acknowledgement to