As part of their support of the profession of Optometry; the SAOA, Contact Lens Society and Iso Leso, are endorsing a project to conduct practice cost studies for optometry in South Africa.

Why is this being done?

The objective of the project is to determine the actual costs of running a practice in 2017/2018 and to compare the results to the costs of the studies done in 2008/9. It is important to identify the cost drivers that have increased the cost of running a private practice at levels higher than the general Consumer Price Index (CPI). To name a few:  increased cost of equipment, new technologies, depreciation of the currency, increased cost of materials, increased medical malpractice insurance premiums, salary increases, rental premiums etc. This review is being conducted at an important time given the Competition Commission Health Market Inquiry into the private health market and renewed focus on health care costs. The Minister of Health has also released the updated version of the NHI White Paper. It is important that Government understands the cost of running a private practice prior to embarking on any efforts to set tariffs unilaterally or contract with the private sector at unrealistic low prices. The Health Market Inquiry has also recently initiated discussions on a Centralised Tariff Bargaining Chamber as well as a Centralised Coding Entity. The project will also assist in reviewing the current coding structures, as well as updating it to be in line with the latest industry trends and costing methodologies.

Who is conducting the study?

The study will be carried out by Insight Actuaries. Insight is an independently owned and run Actuarial Consultancy with a deep understanding of the private practice market and healthcare structures including the challenges facing the healthcare industry. The sponsors of the project are comfortable with the Insight’s approach and ability to conduct the study in a scientific and pragmatic way while taking account of the unique nuances of Optometry. The sponsors will remain in touch with the project and will provide guidance, critique and input if required by Insight.

What is expected from practitioners?

Insight will be sending out surveys to practices for completion. This includes a Scope of Practice Survey, a Salary Survey, and a Financial Survey. Insight has ensured that these surveys are kept as simple and easy to complete as possible, whilst ensuring the minimum data requirements are met. A further Equipment Survey and costing thereof will also be done.

It is vitally important that practices participate in this study by responding to the requests for data. Previous studies were plagued by low response rates that undermined the validity of the overall results and allowed them to be ignored by the government and funders.

If practices choose not to participate there is the risk that the project will be marginalised. Please participate actively so that the study can be used to establish benchmark costs that are meaningful and robust. The results can be used to engage funders, government and other stakeholders. All responses, and financial information submitted, will be treated as strictly confidential. The information will only be made available to Insight Actuaries for the purposes of the analysis. All individual practice information received will be destroyed once the project is completed. Insight Actuaries have signed Non-Disclosure Agreements in this regard, and information will not be made available to any third Party.

Concluding

A similar study is currently underway for the South African Medical Association, the Audiology Association and for Physiotherapy.

A detailed practice cost study such as this is the most effective way of ensuring that Optometric services are fairly and appropriately remunerated. Participation is vitally important for the success of the study.