Product as a Service Model

1. Introduction 

Prosthetic rehabilitation is more than just medical devices; they serve as transformative tools that empower individuals with limb loss to reclaim their lives.

They restore a sense of normalcy, enable amputees to regain mobility and independence, and play a pivotal role in their social, emotional, and economic wellbeing. However, in the private sector in South Africa, the high cost of prosthetic limbs presents a significant obstacle to accessibility for many amputees, especially those under a medical aid schemes. This is because of the medical aid prosthetic benefit often falling short of the actual costs of these invaluable devices, creating a pervasive and burdensome financial gap for their amputee members.

Therefore, this article aims to shine a light on this gap and proposes 2 innovative solutions for medical aid schemes and medical aid members alike.

2. Problem

a. Current Landscape of Prosthetic Funding

In South Africa, most, if not all, medical aid schemes operate on an annual cap prosthetic benefits.

This capped limit infrequently covers the full cost of a prosthetic limbs, leaving a financial gap ranging from tens of thousands to over a hundred thousand rands, depending on the type and complexity of the prosthesis. The major contributing factor to this financial gap is a misalignment between the medical aid scheme funding model and the prosthetic healthcare model. The medical aid funding model does not accommodate the initial high cost of building a prosthetic limb to last for 4-5 years.

The funding model spreads the capped prosthetic benefits annually and equally indefinitely.

i. Financial Gap and its Impact:

To understand the misalignment, consider the case of Mcebisi Boyce, a 17-year-old high school student from Umtata, who lost his leg to cancer.

His annual medical aid prosthetic benefit was capped at R54,000, while the actual cost of the prosthetic leg was R145,000, falling short by a staggering R91,000 in 2022. Such a substantial out-of-pocket payment is beyond the means of many South Africans, often leading to delays in receiving the prosthesis or settling for a cheaper, less functional alternative. This significantly hampers an individual’s ability to reintegrate into society, as in Mcebisi’s case, where it affects his ability to return to school.

Stories like Mcebisi’s are sadly common and emphasize the urgent need for reforms in the prosthetic rehabilitation model and the funding model.

3. Solution

At Ludada and Associates Orthopaedic Services, we are acutely aware of the financial hurdles faced by medical aid amputees and the medical schemes themselves.

We are committed to providing a sustainable solution that eases the burden. Rooted in our belief that limiting technology to people with disabilities who have a capacitating need for it is inhumane. We are advocating for a shift towards innovative solutions such as a circular economy healthcare model, in Product as a Service PaaS, supported by an annual subscription model with medical schemes/members.

a. Product as a Service PaaS (Rental)

Product as a Service PaaS on prosthetic componentry presents a potential opportunity to reduce cost and financial burden to members.

Rental model also offers the flexibility for amputees to upgrade componentry as needed, which is beneficial for growing children or individuals with changing health and physical conditions. In addition, rental ensures proper and regular maintenance of technology by us, which promotes the long life span of prosthetic devices. The cost saving model may increase value coverage from the standard Prescribed Minimum Benefits to potential Prescribed Maximum Benefits at minimum to no additional cost to the medical aid and members.

Environmentally, PaaS will eliminate waste towards the environment to zero.

b. Annual Subscription Model

The proposed annual PaaS healthcare model is in alignment with the current annual healthcare funding model and could be standardized by the adoption of an annual subscription model.

The cost of PaaS is relatively within the capped prosthetic limit, depending on the type and complexity of the prosthetic leg. For example, with the Mcebisi case, we calculated the time value for money for selling price of R145 000 with an annual interest rate of 10% compounded annually, over 4 years. The calculated annual subscription was R45 717,63 annually, falling short of the annual capped prosthetic limit of R54, 000 set by the medical aid.

Resulting in elimination of copayment for Mcebisi parents.

4. Risk factors 

a. Legal risk

The regulatory body states that medical devices in South Africa are for single use in attempt order to ensure safety of patients against potential infection and compromised efficiency of medical devices.

To prevent device inefficiency, rented prosthetic componentry will be used by the single person as recommended by the supplier. In a scenario of changing componentry among patients, each componentry would be used within a set life span recommended by the supplier.

To prevent infection among patients, the socket are customised and cannot be rented. Whereas the sharable components will be refurbished following a standard refurbishment process to kill any infection and dirt.

b. Financial risk

Although the rental model will be affordable, it will be expensive in the long term due to interest incurred overtime. Second, medical aid members may pass on or quit or change medical plans, or benefits used in other services.

To prevent such financial risk, the number of years of renting a device must be limited where possible. A contractual agreement must be in place with a member. Whereas the business must find insurance for rented products.

Our focus, therefore, at Ludada and Associates Orthopaedic Services is to empower medical aid amputees, ensuring that they can access the prosthetic solutions they need without bearing excessive out-of-pocket expenses or losing benefits with each new year.

We are also striving to enable medical aid schemes to align with current sustainable medical healthcare practices that save costs, eliminate out-of-pocket payments, and reduce waste output to the landfill. We hope that our ongoing efforts to raise awareness about the financial challenges faced by medical aid amputees will encourage broader community involvement and cooperation from stakeholders within the healthcare industry, fostering a more supportive and inclusive environment for individuals in need of prosthetic care. The financial struggles faced by medical aid amputees are a call to action for all of us to advocate for change, promote awareness, and deliver meaningful solutions that ease the burden on those who need it most.

Together, we can work towards a future where financial constraints do not pose a barrier to accessing essential prosthetic solutions, and where every individual can embrace life to the fullest.

Conclusion 

Financial accessibility of prosthetic limbs in South Africa is a pressing concern that requires immediate attention and action.

The current healthcare and funding model is ill-suited to the actual costs and needs of prosthetic rehabilitation, creating a substantial financial gap for amputees. This gap not only imposes undue financial hardship on amputees and their families but also hinders their physical, social, and emotional wellbeing. At Ludada and Associates Orthopaedic Services, we are dedicated to bridging this gap and ensuring that all amputees, regardless of their financial circumstances, have access to the essential prosthetic care they require.

By advocating for a circular economy healthcare model, we aim to align the medical aid scheme funding model with the prosthetic rehabilitation healthcare model, reducing costs, and eliminating out-of-pocket payments without compromising the environment.

However, this is not a battle we can win alone. It requires the collective efforts of the entire community, including medical aid schemes, healthcare providers, and other stakeholders within the healthcare industry. By working together, we can create a more inclusive, supportive, and equitable healthcare landscape where no individual is denied the prosthetic care they need because of financial. constraints. Let us strive towards a future where prosthetic limbs are seen not as a luxury, but as a basic human right.