How would you feel about the option to see a doctor and only pay according to the outcome of the visit or how satisfied you feel?
I am sure many of us might vote a huge ‘YES’ right now.
But there is so much more to this concept.
This is essentially the business model that Call9 adopted. A tech startup that connected people in nursing homes to doctors via an iPad and an app. Residents from nursing homes were the group that visited the emergency room (casualty) the most and this initiative was aimed at preventing unnecessary medical costs to them.
After the consultation, instead of charging a flat fee, the doctor would receive payment that reflected the patient’s satisfaction. This ‘satisfaction’ was driven by the perceived value the patient felt he or she got from the consultation. This is called a value-based care model.
According to a Forbes article, this is a simple explanation of value-based care:
“The underlying principle of “value-based care” is simple enough—managing to a lower cost of care for a population of patients, while aiming to improve outcomes.”
But after only three years and $34 million USD later, Call9 had to unfortunately shut its doors due to a lack of funding. 100 people lost their jobs in the process.
The bigger reason, however, was the failure of their business model. People were not ready to shift from a fixed-fee model to a value-based model.
And this got me wondering about our local context in South Africa as there has been a huge upsurge of support in the US for these models in recent years with medical groups and insurance companies adopting this model. Not so much the ‘pay if you feel you received value” but rather the idea to lessen the need for medical intervention in the first place.
A lovely example was one group investing in a patient’s health by procuring a refrigerator to store his insulin as he was diabetic. This simple idea had a huge impact on his health as he could manage his diabetes sufficiently at home, preventing adverse outcomes i.e diabetic ketoacidosis (DKA) which is dangerously high levels of glucose in the body.
When you look at the concept from this perspective, I can see how such a model makes sense. This would be the ultimate goal – encouraging people to live healthier lives and keeping the hospitals for the ill.
The biggest concern here is the risk that such a system carries with it. In South Africa, it can be equally as risky to be a patient as it is treating one.
Due to a long history of inequality in our country and the still-lingering aftermath of apartheid, especially in the health sector, the difference between public and private healthcare is like night and day.
In simple terms, those who can afford it, usually opt for private healthcare. Those who cannot have no option but to choose public healthcare. With the majority of South African citizens unable to afford private healthcare – a mere 15.8% of the total population belongs to medical aid schemes – it is up to our public sector to service the rest of the patients.
Itn my opinion, it would absolutely be in the best interest of this country to strive for a value-based care model in the health sector. This is in essence a big driver for the NHI that the government is trying to push.
BUT
The practical side of this is massively problematic.
From two sides. The patients and the doctors.
The patients
We live in a society where the health sector operates on a lack of trust. Patients don’t trust doctors or nurses to do their jobs properly, they don’t trust pharmaceutical companies and in turn, medical practitioners don’t trust patients to live healthy lifestyles or follow treatment regimes.
The goal for most people would be to avoid unnecessary medical costs in the first place. So prevention is key, but in order for people to understand how to maintain optimal healthcare, they need awareness and education. Another huge obstacle in South Africa is large groups of the population having no, little, or poor access to education. Let alone health education and understanding how lifestyle choices impact one’s health.
It seems like a no-brainer that patients would be the first to adopt a value-based model if it means they pay only for the outcome. But at the core of the value-based system where prevention is the focus in order to avoid the need for medical care in the first place, would patients be as keen to take more responsibility for their own health? Even more so, if they don’t know what is needed to live a healthy lifestyle, should the focus be more on prevention, or education?
The medical practitioners
Remember I said our healthcare system operates on a lack of trust? Adding to this, is the side-effect of no trust. Risk management.
So for those who might not know, there is in fact no such thing as private doctors and government doctors in South Africa. They might operate in different sectors but every single medical practitioner in private practice (doctors, not nurses) has trained for their specialty in the public sector.
Only once they complete the required 3 years in the public sector to become a GP, or the additional 4 – 8 years (the waiting list is sometimes quite long) to become a specialist, are they able to open a private practice.
If they stay in public, they are covered by the government but still need their own medical malpractice insurance.
If they go into private practice, they take all the risk on themselves. In some disciplines such as obstetrics, the yearly malpractice insurance is over R900 000. That is more than an annual salary for most people in this country.
But they cannot practice without this insurance as they risk losing everything in their practice and what they worked for, should they get sued by a patient and lose the case.
This is but a tiny part of the costs they face in private, which contributes to the exceptionally high costs patients often have to pay.
I know this was supposed to be a case study about Call9 and it still is. Just a short one as it was clear that they failed because they didn’t get the additional funding. But in essence, they failed because patients paid what they felt the consultation was worth, but the doctors could not sustain their practices on a system with unpredictable income.
In other words, the risk was simply not worth it.
And I foresee the same problem in our local setting. Although the startup founders of Call9 came from the medical field themselves, they potentially overestimated their colleagues’ passion to make a difference. Not if the bottom line at the end of the month was significantly affected.
When the risk was too big.
It’s probably easy to think “Well, they should do it because healthcare is too expensive for most people”.
My counter question is if you would be willing to do it in your profession?
If you are a graphic designer, would you be willing to get paid only according to your customer’s satisfaction? After all the years you have put in to become good at your job?
If you are an accountant or a lawyer, would you be willing to get paid only according to the value your clients deem your consultation was worth? After years of study and board exams?
Healthcare is characterised by managing risks. Risks to the patient’s health when it is threatened by a disease. Risks to the doctor’s practice by treating the patient incorrectly.
And risks are mitigated through rules and policies, by laying down the law.
Medicolegal claims, normally meaning claims based on instances of medical negligence or malpractice, have markedly increased in the South African (SA) health sector, skyrocketing since about 2007.
-Prinsen, 2023. SAMJ, S. Afr. med. j. vol.113 n.4 Pretoria Apr. 2023
According this published article in the South African Medical Journal (SAMJ), the problem with healthcare litigation in South Africa is more a combination of issues rather than a singular problem.
The main points being:
Clinical errors, maladministration and mismanagement
This will always be in the mix as medical professionals are by no means perfect and mistakes happen. Even though there is a difference between negligence and an honest mistake or purely an unforeseen complication, their mistakes cost lives.
The legal profession
The legal profession was also identified as a driver of the problem with active marketing and targeting patients, encouraging them to sue for any adverse outcomes.
Legal developments and patient awareness
With patients becoming more aware of their rights, litigation is on the rise as they pursue legal action more and more.
Additional causes
A combination of patient expectations as they are better informed, the doctor-patient relationship which is often described as indifference towards patients, poor communication, and poor management of adverse effects.
For a list of solutions or if you are simply more curious, also read this article.
The idea of value-based care is novel but it can only work in this country if everybody works together. Simply paying less because you are not satisfied is a flawed system to begin with. It completely absolves the patient of any responsibility of his or her own health status.
However, if value-based care is focused on prevention as the concept was intended to be, instead of purely managing risks, it is a different outcome.
So would I pursue a Call9 model in South Africa in healthcare?
No. Although I would love to but our system is still too flawed.
There is a reason why medical professionals from across the world are sent to South Africa for practical training and exposure, performing procedures daily that they might never see in their countries of origin. Besides the trauma departments dealing with the results of a country stricken by violence and gang activities, the lack of patient education results in significant negligence in healthcare before they ever see a medical professional.
It is often beyond prevention by the time they seek medical care.
This case study was more than just a failed startup. It is unfortunately a symptom of a failing healthcare system. A lack of support for patients and their carers to build a system that benefits all. And an environment that is threatening rather than supporting.
It is novel idea. It is a necessary idea. But the context was not right and as much one can hope to one day adopt a value-based care system in South Africa, there is still a long way to go for us to just get to preventative care.
*Disclaimer: Apart from the articles mentioned, the above is not based on assumptions of the health sector. I am a trained professional nurse and spent the majority of my training and career in the public sector and I am married to a medical doctor. This is the sad reality of our healthcare system.
Thank you for listening to my thoughts – it is almost as long as a podcast but sometimes it needs to be said!
Have a happy week everyone!
If you want to chat some more, reach out to me at lizfuzy@gmail.com
