Rivals spar over online credit checks

[Johannesburg, 28 October 2003]

INCREASING competition in the arcane world of medical aid claims conveyance has sparked an argument about whether Discovery Health members should be charged a transaction fee when doctors inquire online whether they are covered by their medical aid.

At present, the more established player in the market, Digital Healthcare Switch (DHS), charges doctors, but not patients, for an online credit check.

But when similar inquiries are made about Discovery members through DHS\'s rival Healthbridge, it appears that both doctors and patients are charged a fee, which is deducted from the member\'s medical aid savings account.

Electronic claims conveyance offers doctors, dentists, pharmacists and other medical practitioners the benefit of quicker claims processing and payment from medical aid providers.

The system also provides practitioners with the ability to check whether patients or clients have the authorisation from their medical aid schemes for specific forms of treatment or medication, rather like authorisation checks are made on credit card purchases.

Discovery is a significant shareholder in Healthbridge, with Medscheme and information technology group Dimension Data.

DHS CEO Hennie du Plessis says that the practice of charging the patient is unusual. "It is normal to charge the practitioner, or service provider for the service, as they stand to benefit from rapid and guaranteed payment.

" This reduces the practitioner\'s debtor\'s book and the concurrent costs of administering this.

" Effectively, charging the practitioner is similar to the manner in which credit card companies charge merchants. We do not charge the patients a transaction fee in any way whatsoever."

DHS\'s claim destinations include some of the largest medical aid societies in the country, including Medihelp, Old Mutual, and Metropolitan Health Group.

Du Plessis is critical of the relationship between Healthbridge, Discovery and Medscheme as he believes the relationship is not at arm\'s length. "The whole nature of e-claims is that it should create efficiencies, and providers and patients alike should derive benefits from this," he says.

The competition for electronic claims conveyance business between DHS and Healthbridge is fierce. Discovery and Medscheme have adopted a policy of refusing to accept real-time claims that originate from DHS systems.

It appears that Healthbridge is using the market power of its parent company, Discovery Health, to build critical mass.

The chief information officer for Discovery Health, Trent Rossini, says patients are charged a fee for what is described in the industry as "real time responses". But he says it is not true that clients get no benefit from the system, as it helps to establish a solid client-doctor relationship.

If a doctor is certain that he or she will get paid, it obviates the need that doctors might otherwise have had to chase down bad debts, which tends to upset the client-doctor relationship, Rossini says.

Furthermore, Discovery and its partners have spent about R20m establishing the system, thus it will take considerable time before any profit is seen, he says.
Few clients object to the very small fee of about R2 that Discovery is charging for the service, he says.

Rossini argues that DHS has a grip on other parts of the market, particularly the practice management software that many doctors use, and it was using this system to boost its switch.

DHS is not prepared to share the use of this system with its competitors, he says.

" At the moment, all sides are trying to defend their positions," Rossini says. "Ultimately we are of the opinion that the competition in the market is good in that it forces competition and drives down pricing."

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