7 November Dear Colleague SURGICOM MEMBERSHIP

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1 Unit 16, Northcliff Office Park 203 Beyers Naude Drive Northcliff, 2115 Tel: , Fax: PO Box 2127, Cresta, Johannesburg, 2118 Registration No. 1997/001593/07 VAT Reg No: November 2012 Dear Colleague SURGICOM MEMBERSHIP Surgicom is restructuring operations to improve efficiency to better serve you our loyal colleagues in surgical private practice. The retirement in October 2012 of Yvonne Pyne-James, our Secretary of 16 years, and the rising costs of the services previously purchased from Spesnet have forced the Surgicom Board to reassess our future course. After comprehensive assessment of our requirements and the various options, the Surgicom Board of Directors approved the decision to contract HealthMan (Health Management and Networking Services (Pty) Ltd) for company secretarial and management services. HealthMan has replaced the services previously offered by Spesnet from 1 st July The full Secretarial services and financial administration have been transferred to HealthMan effective 1 st November We trust a seamless and trouble free make-over will ensure significant expansion in our services and abilities to collect and control data, particularly regarding practice costs, coding and tariffs. We envisage significant cost savings in Surgicom monthly membership fees without compromising the quality of services to members. 1. Background: Surgicom was established as the business arm of ASSA in 1996 to manage strategic private practice matters for General Surgeons. Surgicom is a public company owned and managed by General Surgeons. 1 Surgicom must be strengthened by increased membership support to deal with the ever mounting demands placed on members, inter alia, Government criticism of private practice in South Africa, the role of private practice in the proposed National Health Insurance (NHI) System, income of specialists in the private sector, the role of medical schemes and Scheme Administrators and other important matters such as regulatory reforms and legal challenges. 1. Reg No: 1997/001593/07; VAT Reg No: Directors: SP Grobler, J Mook (Chairman), S Pillay, M Wellsted

2 P a g e 2 There have been huge successes in joint efforts between HealthMan and other specialist groups, including negotiation with all role players, increases in the fees of doctors in private practice as well as the establishment of new codes that have enhanced private practice revenue. 2. The immediate projects that Surgicom and HealthMan will focus on: 1. Strengthening the organisation to represent General Surgeons in private practice as well as those in the Public Sector in limited private practice. 2. Surgicom together with the South African Private Practitioners Forum (SAPPF), SAMA and other specialist management companies will continue the tariff battle and establishment of a cost-based reference price. They will also engage with the HPCSA to publish a new scientifically researched ethical or guideline tariff. 3. Surgicom, other management companies, SAPPF and other bodies will continue to oppose the Board of Healthcare Funders attempt to reduce the value of PMB s to a scheme rate and not the doctor s invoice value. 4. Surgicom will continue to negotiate with medical schemes on all matters pertaining to General Surgeons. 5. Improving communications and website offerings through the Surgicom website. 6. Establishing a range of practice advisory services through the offices of HealthMan. 7. The consolidation of surgical claims data to negotiate coding and tariffs with Medical Schemes and the Department of Health. 8. Discussing and negotiating Benefit Design with the various medical schemes and managed care organisations. Maintenance of a Funder file to assist in confirmation of level of funding for individual benefit designs and contact details. 9. Assistance with procedural coding (new procedures, unit values, SAMA and CPT coding, billing rules, ICD codes, PMB references), billing policies, general practice and creditor policies, legal requirements. 10. Surgicom will continue to update procedural coding reforms relevant to General Surgeons and to meet with Funders in this regard. 11. Review and update of surgical coding system for incorporation into a new coding system for South Africa. This project will be done in conjunction with SAMA and SACHI (South African Classification of Healthcare Interventions). 12. Surgicom together with SAPPF and other specialist management companies will continue to engage with Government on all healthcare matters and NHI as envisaged by the National Health Act and the Medical Schemes Act. 13. Commercial offerings such as credit card terminals, asset finance, PPS reviews and CPD point logging through the assistance of HealthMan and the Surgicom website.

3 P a g e 3 The following services are available at no additional costs (except if stated so) and are part of the monthly membership fee: Helpdesk to assist with general and medical schemes queries. The Surgicom/HealthMan Helpdesk is available to assist Surgicom members with unresolved practice related queries, e.g. medical scheme problems, non-payment of PMB s, rejections of accounts or specific codes, etc. The practice should in the first instance attempt to resolve its own account queries and where these cannot be resolved, the Surgicom Helpdesk will gladly assist with escalated problems. All account queries should be submitted to the Surgicom Helpdesk by to [email protected] or faxed to (See Surgicom Queries letter appended) CPT code queries should be addressed to Medihelp or the Surgicom Helpdesk. Practice advisory services to assist with medical schemes problems, i.e., non-payment, reversals, PMB s, assistance and management of COIDA/WCA accounts, etc., through the HealthMan office on Surgicom and HealthMan will assist and support members with responses to forensic audits done by medical schemes. Surgicom enjoys a preferential agreement with Pracmed (Pty) Ltd Medical Claims Administrators, a bureau of offering comprehensive claims administration services. HealthMan has contracted a reduced tariff with HealthFocus, GoodX and MedEDI on their practice management software for new practice management systems. VeriClaim and MediCharge Bureau Services as marketed by Spesnet will continue to be endorsed as many surgeons have contracted with them. Daly Morgan and Associated (Pty) Ltd continues as an ally for debt collection, with a small commission that accrues to Surgicom. Helpdesk to assist with Consumer Protection Act complaints and queries [email protected] The Surgicom website is constantly being updated. Set the website as a favourite home page. There are important messages, reference documents and many other features, inter alia: Free online SMS service for patient communications via Surgicom website (20 per day, 400 per month for free); additional SMS bundles, internet connectivity and data bundles can be purchased without hassles through E2 Solutions. Online access to manage your CPD points. Online access to various medical journals. Healthman has an agreement with ABSA bank entitling you to a better rate on credit card transactions. The Merchant rate is 2.40 % on credit cards and 1.15% on debit cards. Monthly rental is R120 per month (VAT Excl.). Contact the Helpdesk with your current merchant number to arrange for contract transfer or request assistance if a new application. Receipt of regular communications relevant to the healthcare industry. Annual Salary Review and Update conducted by HealthMan. Various consulting services through HealthMan offices.

4 P a g e 4 Prosper Financial Services, part of the HealthMan Group, will review and advise on employee benefits, personal investments, life and key man policies and medical malpractice insurance. PPS reviews and analysis by a Prosper consultant. Note that changes to PPS structures, requires that your portfolios be reviewed. Impact Corporate Brokers have offered Surgicom special medical malpractice deals placed with Stalker Hutchison Admiral, a subsidiary of Santam Ltd, the largest short-term insurer in South Africa. Wealth preservation programme with Citadel as a joint venture with HealthMan for individuals with investment portfolios in excess of R2 million. Investments below R2 million will be dealt with by Prosper Financial Services. 3. The Surgicom business model: The Board of Directors is made up of General Surgeons that have been duly nominated and elected. The current Board comprises: Dr Jan Mook, Chairperson, Pretoria Dr Mike Wellsted, Johannesburg Dr Stephen Grobler, Bloemfontein Prof Sats Pillay, Port Elizabeth VASSA representative to be confirmed The Board has restructured Surgicom to be compliant with the new Companies Act and to enjoy benefits of less costly internal financial review. The Board out-sources various operational issues based on service agreements and at predetermined costs. Our forecasts are that these services will be obtained at less than the prior dispensation with a more advanced and extended service offering. Surgicom now employs the services of two existing organisations, HealthMan (Pty) Ltd and E2 Solutions (Pty) Ltd, on a contractual basis to advise on and manage all routine operational tasks, as well as providing SURGICOM with additional services where required. The advantage of this business model is that Surgicom does not have to invest money or resources in staff, premises and equipment and therefore operates as a virtual organisation. 4. Internal Communication: Communication will be via and the Surgicom website, with limited communication via sms, fax and post. Members will receive a HealthView newsletter updating them on industry news on a monthly basis. Surgicom newsletters will be sent regularly. A Private Practice Review newsletter will regularly update news pertaining to practice i.e. codes, legislation, tariffs, etc. Member meetings are planned for the various regions at which matters of importance to private practice will be discussed.

5 P a g e 5 5. South African Coding System: Surgicom is actively involved in all the coding and tariff bodies. We support CPT as a model for future coding structures. Our experience with the Medihelp - CPT contract places Surgicom as an important repository of CPT coding expertise. The SAPPF and SAMA are in the process of drafting a new National Procedural Coding Structure and joined the Private Health Informatics Standards Committee (PHISC) to set the standards of the new coding structure. All medical schemes, pharmaceutical companies, switching houses, hospital groups and other professional organizations are members of PHISC. It is important that the Medical Profession determines its scope of practice and therefore needs to remain in control of any changes to the current coding system or any proposed new system. 6. HealthMan Overview: HealthMan is a privately owned healthcare consultancy specialising in the management and administration of specialist and healthcare networks. Their focus on promoting the professional and commercial interests of both specialist networks and healthcare practitioners, coupled with their extensive industry experience, quality service and industry contacts, make them the preferred choice in healthcare consulting. HealthMan has focused exclusively on consulting to private practice since inception in Areas of expertise include network administration, legal support, healthcare research, financial modelling and the development of tariff schedules. HealthMan consultants play pivotal communication, representation and negotiation roles in their relations with key healthcare industry stakeholders: Networks, Funders (i.e. Medical Schemes and Managed Healthcare Organizations), Professional Associations, Hospitals, Pharmaceutical Companies and Suppliers. It is for the foregoing reasons that Surgicom have now contracted HealthMan as consultants and outsourced agents to support Surgicom with the ever increasing healthcare demands. HealthMan was also responsible for NHRPL 2009 submissions for virtually all SAMA disciplines and has done most of the research work and support for the various legal challenges that have happened or are in progress. The HealthMan Management Team to support Surgicom: Casper Venter: Director Funder Relations and Projects Ernst Ackermann: Director Corporate Governance Ria Botha Admin, Finance and Data Peet Kotze Finance and Data Mardi Roos Network Manager Joey Hanekom Website and Communications

6 P a g e 6 Dalene Jordaan Practice Support Tamara Lombard Practice Support 7. HealthMan Client Base: HealthMan has been consulting to Private Practice for the past 16 years and their clients include: Ambulance & Emergency Services (ER24 & Netcare 911) Clinical Psychology Forum (CPF) ENT Management Group Ltd Faculty of Consulting Physicians of SA (FCPSA) General Practitioner Management Group Ltd (GPMG) Gynaecology Management Group Ltd (GMG) and South African Society of Obestetrics & Gynaecology (SASOG) Iso Leso Optics Ltd (Optometric Network) Namibian Private Practitioners Forum (NPPF) Ophthalmology Management Group Ltd (OMG) and Ophthalmology Society of South Africa (OSSA) Paediatricians Management Group Ltd (PMG) Psychiatry Management Group Ltd (PscyhMg) and South African Society of Psychiatrists (SASOP) Radiography (SORSA) Society of Neurosurgeons of South Africa (SNSA) South African Private Practitioners Forum (SAPPF) South African Rheumatism and Arthritis Association (SARAA) South African Society of Physiotherapy (SASP) Speech Therapy & Audiology (SAAA & SASHLA) Various Legal firms for Forensic Support 8. Membership fee and joining Surgicom: The monthly fee for Surgicom remains at R500 per month (VAT inclusive). Members in the public sector with limited private practice, as well as members, who have recently started private practice, will pay a pro-rated reduced monthly fee.

7 P a g e 7 All surgeons that do private work are earnestly urged to join Surgicom. We thank the 200 General Surgeons who have already joined and supported Surgicom in the past. If you have not yet joined Surgicom, kindly complete the membership application and ACB (debit order) authorisation forms and fax back to We trust that this document clarifies the roles played by the various professional organisations that look after your interests in an ever changing healthcare environment. Should you have any further queries, please do not hesitate to contact us. Yours faithfully JAN MOOK CHAIRPERSON: SURGICOM