Up, up and away

Gov­ern­ment med­i­cal scheme shows healthy growth

Finweek English Edition - - Healthcare -

THE LONG-AWAITED Gov­ern­ment Em­ploy­ees Med­i­cal Scheme (GEMS) is up and run­ning and stak­ing its claim in a com­pet­i­tive med­i­cal scheme en­vi­ron­ment. Prin­ci­pal of­fi­cer Dr Eu­gene Wat­son an­swers Fin­week’s ques­tions.

Q: Gems is now a year old. Are you sat­is­fied with the scheme's growth; has it reached crit­i­cal mass? A: By the end of 2006, GEMS was among the 10 largest med­i­cal schemes in the coun­try with 70 000 reg­is­tered prin­ci­pal mem­bers rep­re­sent­ing about 200 000 cov­ered lives. The scheme showed growth ev­ery work­ing day of the year and we are now pro­cess­ing well over 850 ap­pli­ca­tions a day. This growth was achieved from a base of zero mem­ber­ship and did not in­volve overt mar­ket­ing ex­pen­di­ture.

A year is not a long time to in­tro­duce a med­i­cal scheme to one mil­lion em­ploy­ees, 40% of whom had not been med­i­cal scheme mem­bers, in more than 120 de­part­ments and over 40 000 work sites. It should also be borne in mind that the new med­i­cal sub­sidy pol­icy aligned to GEMS was only an­nounced six months ago. Q: What were the high­lights over the past year? A: The fact that 50% of GEMS mem­bers did not pre­vi­ously ac­cess the em­ployer sub- sidy counts as a def­i­nite high­light. It shows the scheme is mak­ing sig­nif­i­cant progress to­wards cor­rect­ing the im­bal­ances of the past and pro­mot­ing eq­ui­table ac­cess to the em­ployer sub­sidy.

By the end of 2006, the scheme com­plied with the statu­tory re­serve ra­tio and had recorded good un­der­writ­ing re­sults. The fi­nan­cial man­age­ment of the scheme was in­deed a high­light. Col­lect­ing con­tri­bu­tions in ar­rears, not ap­ply­ing wait­ing pe­ri­ods or penal­ties and al­low­ing cover on reg­is­tra­tion ne­ces­si­tated sound fi­nan­cial plan­ning and ad­min­is­tra­tion.

In line with this, our Sap­phire op­tion, aimed specif­i­cally at those who could pre­vi­ously not af­ford any med­i­cal scheme cover, has grown more than 80% each month for the past four months.

We are also ex­pe­ri­enc­ing ex­cel­lent col­lab­o­ra­tion with the pub­lic health sec­tor, which bodes well for op­por­tu­ni­ties and the goal of broad­en­ing ac­cess to med­i­cal scheme ben­e­fits for a wider spec­trum of the pop­u­la­tion. Q: What mea­sures were put in place to en­sure ex­cel­lent ser­vice, sound op­er­a­tional pro­cesses and good gov­er­nance? A: The af­fairs of the scheme are gov­erned by an in­terim board of 11 trustees ap­pointed by the Min­is­ter for the Pub­lic Ser­vice and Ad­min­is­tra­tion. The board is au­tho­rised to per­form in ac­cor­dance with the scheme’s rules and we are con­fi­dent the trustees, from var­i­ous back­grounds rang­ing from eco­nomics to fi­nance to gov­er­nance to HR, will con­tinue do­ing a su­perb job in gov­ern­ing its af­fairs.

An ef­fi­cient ex­ec­u­tive struc­ture, led by the prin­ci­pal of­fi­cer, im­ple­ments the strate­gic ob­jec­tives and di­rec­tives of the board of trustees. Strat­egy, busi­ness plans and op­er­a­tional di­rec­tives are de­vel­oped and im­ple­mented in­ter­nally and ap­pro­pri­ate re­sources ded­i­cated to the sole pur­pose of pro­vid­ing State em­ploy­ees with af­ford­able, qual­ity health­care. The “lo­cus of con­trol” rests firmly within the scheme.

The prin­ci­ples of sound cor­po­rate gov­er­nance are en­trenched in the scheme rules and other gov­ern­ing doc­u­ments, in­clud­ing the code of con­duct that binds all trustees and em­ploy­ees. The dec­la­ra­tion of in­ter­ests is a stand­ing item on the agenda of all trustee meet­ings. En­sur­ing in­de­pen­dent de­ci­sion-mak­ing is crit­i­cal and demon­strates we are on track to­wards ful­fill­ing our fidu­ciary duty of pro­tect­ing mem­bers’ in­ter­ests at all times and set­ting a bench­mark in the health­care fund­ing in­dus­try.

We se­lected, af­ter a trans­par­ent ten­der process, “best of breed” health­care part­ners through which the schemes de­liver pro­fes­sional health­care-re­lated ser­vices to its mem­bers. Th­ese part­ners are: • Metropoli­tan Health Group ( MHG), which han­dles the scheme’s ad­min­is­tra­tion Net­care 911, which de­liv­ers emer­gency med­i­cal ser­vices Prime Cure, which of­fers pri­mary health­care and hospi­tal ser­vices for two of the op­tions, and So­lu­tio, which of­fers man­aged care ser­vices and an HIV/Aids man­age­ment pro­gramme

Medi­post, which pro­vides chronic med­i­ca­tion to mem­bers on Onyx, Emer­ald and Ruby. To­gether, they pro­vide a unique and pow­er­ful ser­vice to all GEMS mem­bers. Ser­vice providers ren­der a seam­lessly in­te­grated ser­vice to mem­bers and co­op­er­a­tion is con­trac­tu­ally stated.

GEMS’s over­all strate­gic ob­jec­tive is to be an ex­cel­lent med­i­cal scheme for its mem­bers. Our gov­er­nance and man­age­ment struc­ture, as well as our con­trac­tual part­ner­ships, en­sure mem­ber ser­vice ex­cel­lence is fore­most in our work.

Have the ben­e­fit op­tions for 2007 been ap­proved by the CMS, and what do they en­tail?

A: Yes. Our sub­mis­sion was made be­fore 30 Septem­ber in line with coun­cil re­quire­ments.

GEMS of­fers mem­bers five dif­fer­ent ben­e­fit plans -– Onyx, Ruby, Emer­ald, Beryl and Sap­phire. Th­ese plans are 10% to 25% cheaper, with sim­i­lar or in­creased ben­e­fits than other med­i­cal schemes.

Sap­phire and Beryl are the en­try-level op­tions, with cover from des­ig­nated provider net­works. Sap­phire was specif­i­cally de­signed to be in­ex­pen­sive and it achieves this by pro­vid­ing out-of-hospi­tal care at private fa­cil­i­ties and in-hospi­tal cover at pub­lic fa­cil­i­ties. Emer­ald is the tra­di­tional op­tion and has been de­signed to re­sem­ble the med­i­cal scheme plan most pub­lic ser­vice em­ploy­ees are en­rolled in. Ruby of­fers mem­bers a sav­ings ac­count for day-to-day med­i­cal ex­penses as well as a hospi­tal plan. Onyx is the top of the line, com­pre­hen­sive op­tion.

For 2007, the changes in Sap­phire in­clude a new op­ti­cal ben­e­fit and a con­tra­cep­tive ben­e­fit, while all other ben­e­fit lim­its in­creased 5%. In ad­di­tion, mem­bers on this op­tion can se­lect to ac­cess private hos­pi­tals un­der spe­cific cir­cum­stances. Beryl has been im­proved to in­clude the con­tra­cep­tive ben­e­fit and also of­fers an over­all ben­e­fit in­crease of 5%.

The Ruby op­tion now of­fers a re­vised ad­vanced ra­di­ol­ogy (eg MRI, CTI scans) limit as well as the over­all ben­e­fit limit in­crease of 5%. At the re­quest of mem­bers, sig­nif­i­cant changes have been made to the Emer­ald op­tion. It will of­fer an en­hanced GP and spe­cialised den­tistry ben­e­fit, as well as a larger ad­vanced ra­di­ol­ogy ben­e­fit and a sep­a­rate limit for pathol­ogy and ba­sic ra­di­ol­ogy. The Onyx op­tion sees ben­e­fit lim­its en­hanced by 5%.


What are your plans for 2007 and be­yond?

A: This year, GEMS in­tro­duced a des­ig­nated ser­vice provider (DSP) to pro­vide chronic med­i­ca­tion to Ruby, Emer­ald and Onyx mem­bers reg­is­tered on the chronic medicine pro­gramme. Mem­bers will now have their chronic medicine de­liv­ered to their homes at no ad­di­tional charge.

More strate­gi­cally, GEMS aims to con­tinue grow­ing its mem­ber­ship through­out the year. We will place more em­pha­sis on Sap­phire to reach more peo­ple who couldn’t af­ford any med­i­cal scheme cover in the past – em­ployee ed­u­ca­tion on med­i­cal scheme mem­ber­ship (large num­bers have never been scheme mem­bers) and on their sub­sidy

ben­e­fits will form an in­te­gral part of our plan for 2007.

We will con­tin­u­ally eval­u­ate our ser­vice level agree­ments with our con­tracted ser­vice providers and en­sure they ad­here to our re­lent­less pur­suit of ex­cel­lence. We will not tol­er­ate in­ad­e­quate ser­vice from any of them.

We will con­tinue to strengthen our gov­er­nance func­tion by in­tro­duc­ing a for­mal trustee ap­praisal sys­tem.

In line with the re­quire­ments of the Med­i­cal Schemes Act, GEMS mem­bers will dur­ing the year elect 50% of the trustees to serve on the board of trustees. The rules of the scheme have been amended to en­sure a fair and trans­par­ent elec­tion process, over­seen by an in­de­pen­dent body. In so do­ing, scheme mem­bers will have a tan­gi­ble say in how it is run. Mem­bers will be em­pow­ered through the knowl­edge that the money they en­trust to GEMS is looked af­ter and spent with due care, dili­gence, skill and in good faith.


Where do you see GEMS in terms of mem­ber­ship at the end of the year, as well as its abil­ity to lever­age its num­bers and buy­ing power?

A: We ex­ist, first and fore­most, to ren­der a ser­vice to our mem­bers and our first fo­cus will be on ser­vic­ing them, ir­re­spec­tive of how many there are. GEMS will grow as it con­tin­ues to mar­ket it­self to pub­lic ser­vice em­ploy­ees. In the first few days of Jan­uary we have grown by more than 6 000 prin­ci­pal mem­bers and we ex­pect to reach a to­tal of 100 000 prin­ci­pal mem­bers quite soon.

Re­gard­ing lever­age, the growth in mem­ber­ship will def­i­nitely help the scheme to fur­ther ne­go­ti­ate with ser­vice providers. The more its mem­ber­ship grows, the more buy­ing and bar­gain­ing power it will have to con­tinue sus­tain­ing the ideals it up­holds, es­pe­cially those of of­fer­ing em­ploy­ees value for money. GEMS al­ready en­joys favourable health­care and non-health­care rates with sec­tor par­tic­i­pants and it is clear that greater value will be un­locked as the

scheme grows.

To what ex­tent is GEMS af­fect­ing schemes that tra­di­tion­ally had a large num­ber of Gov­ern­ment em­ployee mem­bers?

We ap­pre­ci­ate our ex­is­tence may well af­fect other schemes but we are not in the mar­ket to com­pete with them. Our man­date is clear in that we have been es­tab­lished by Gov­ern­ment to of­fer Gov­ern­ment em­ploy­ees eq­ui­table and af­ford­able ac­cess to com­pre­hen­sive health­care cover.

Keep in mind that in 2004 Cabi­net as­sessed the over­all ef­fect on schemes and ser­vice providers. While some or­gan­i­sa­tions will be neg­a­tively af­fected, the over­all ef­fect on the mar­ket will be pos­i­tive as the med­i­cal schemes pop­u­la­tion will in­crease 14% once GEMS is fully im­ple­mented. GEMS sets an ex­am­ple for large em­ploy­ers in terms of how to im­prove the de­liv­ery of health­care ben­e­fits to all em­ploy­ees, and for in­dus­try in re­spect of pro­vid­ing lower cost op­tions.

We are ful­fill­ing our fidu­ciary duty of pro­tect­ing mem­bers’ in­ter­ests. Eu­gene Wat­son

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