Inside a Bleeding Industry

The need for a transparent and trustworthy solution has never been greater.

The Industry is Bleeding Capital and It's Costing Lives

February 6, 2025 Malcolm Libera from Business Tech conducted a deep-dive into the financial management within the South African healthcare sector. When the findings were presented to the Mimo Med team, the escalating crisis screamed: "This industry is bleeding capital and its cost is human lives."

Health Minister Dr. Aaron Motsoaledi recently revealed that 15,300 healthcare workers are at risk of losing their jobs due to dire budget constraints. Added to this, 1,800 resident doctors, having completed their mandatory community service, have been thanked, released, and left unemployed. The heartbreaking part is yet to come: It wasn't due to a performance issue. It was a financial management issue.

The consequences won't only impact our growing unemployment rate in critical roles. It directly impedes the accessibility to quality healthcare services for all South Africans as we are left with just 0.3 doctors per 1,000 people. Statistically falling far behind the World Health Organization's minimum recommendation of 2.5 doctors per 1,000 patients.

Great doctors are bound to the systems they operate within

While public discourse often centers on external factors, such as the R12 billion shortfall caused by the Trump administration’s freeze on PEPFAR funding, the deeper problem lies within. Great doctors are still bound to the systems they operate within. Before we call for international aid, we must first confront our broken systems. Dr. Aslam Dasoo, spokesperson for the Universal Healthcare Access Coalition, reported that South Africa loses R60 billion every year across its eight provinces to fraud, corruption, financial mismanagement, and wasteful expenditure. Unfortunately, these figures have now become the norm rather than the exception.

The Lost Capital Behind Medical Schemes

Turning to the private sector, the picture is no less disturbing. Back in 2023, The Council for Medical Schemes (CMS) estimated that between R22 billion and R28 billion is lost annually to fraud, waste, and abuse (FWA) within medical aid schemes. These are not theoretical costs. This is real money lost.

And yet, recovery efforts barely make a dent. Medscheme, one of the largest administrators in the country, recovered just over R155 million in 2023 for the 11 schemes it managed and reduced irregular billing by R3 billion, a figure that, while not insignificant, is a fraction of the R28 billion in annual losses.

Even with high-volume claim processing, with over 10,000 claims per day and payments to 40,000 providers monthly, the scale of fraud detection and recovery remains grossly inadequate. This is not due to a lack of effort, but a system designed without transparency, accountability, or trust with reliance on outdated technological tools.

The truth is South Africa’s healthcare system isn’t just underfunded. It’s financially porous. Year after year, billions vanish due to fraud, waste, and mismanagement, while only a fraction is ever recovered. These are not just accounting errors. They are lost opportunities to restore dignity to our healthcare system.

If we are serious about building a healthcare system that serves the people, then digital accountability must be at its core. Until we deploy smarter tools to manage our resources, even the best intention, and the biggest budgets, will be buried under administrative failure.