Discovery Health criticised the Section 59 inquiry on Monday, flatly rejecting its damning finding of racial bias and branding the panel’s conclusions as “flawed” in methodology, based on “unscientific assumptions and a misinterpretation of complex data”.
The inquiry’s final report, tabled on Monday and handed to health minister Aaron Motsoaledi, concluded that systems used by the country’s three biggest administrators — Discovery, Medscheme and the Government Employees Medical Scheme (Gems) — were procedurally unfair and disproportionately penalised black healthcare professionals.
For Discovery specifically, the panel, chaired by advocate Tembeka Ngcukaitobi, cited risk-ratio analysis showing black psychiatrists were 3.4-3.8 times more likely than their white peers to be investigated and found guilty of fraud, waste and abuse.
Discovery dismissed the findings, arguing that the inquiry relied “on a flawed and overly simplistic statistical analysis by a single expert”.
“The panel appears to have largely disregarded input from a range of eminent local and international independent experts, including the London School of Economics and SA’s former statistician-general”.
However, Ngcukaitobi clarified that the panel had used three experts. “Our experts were Wim Trengove SC, Prof Melissa Steyn and Dr Zaid Kimmie.”
According to the statement, Discovery had made 14 submissions to the panel since 2019.
“No evidence has been presented to support the allegations that Discovery Health has investigated or sanctioned any healthcare professional in a biased or unjustified manner,” the administrator said.
“Furthermore, all complaints submitted to the Section 59 panel by healthcare providers against schemes administered by Discovery Health were shown to have legitimate grounds for investigation, with no evidence of racial profiling.”
Discovery Health CEO Dr Ron Whelan said the company was reviewing the report in full and considering its options, “including a formal review of the findings”.
The rest of the industry’s response has also been strongly critical.
The Health Funders Association (HFA) on Tuesday called the methodologies that led to certain conclusions “flawed”.
The HFA said the report acknowledges that the complaints received “did not provide conclusive evidence of discrimination.”
“Importantly, the panel did not identify a single case where a healthcare provider was investigated or sanctioned without cause. There is no evidence or conclusion that medical schemes are recovering any funds that they shouldn’t be.”
The HFA said it would work with the Council of Medical Schemes to ensure that the report was “appropriately interpreted as it does not include any legal findings of unfair discrimination or racial profiling”.
On Monday, the Board of Healthcare Funders (BHF) — of which both Gems and Medscheme are members — also branded the findings “fundamentally flawed, and, if allowed to stand, will open the door for runaway fraud and corruption in the healthcare sector”.
The BHF raised, among other things, concern about the racial classification techniques employed by the panel, including the use of surnames to classify providers, citing exposure bias within member demographics as a critical oversight; and the incorporation of nonindividual entities such as state hospitals and corporate groups into the analysis.
“One of the large schemes investigated ... serves a member base that is 91% black, which logically results in a higher rate of member interactions with black providers,” the BHF said.
Medscheme declined to issue a separate comment, while Gems is reviewing the report and its implications.
Updated: July 8 2025
This story has been updated with comment by the Health Funders Association
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