Medical schemes offer discounts for limiting your choice

Are you willing to have your choice of doctors and hospitals restricted in return for paying lower contributions? This is what medical schemes are offering with efficiency-discounted options, which schemes hope will help them contain spiralling costs. rep

Large medical schemes have announced average contribution increases of more than 10 percent for 2017, despite a circular from the Council for Medical Schemes (CMS) in July asking them to keep in mind that above-inflation increases are a burden for members.

The private healthcare sector is under enormous pressure, because members are claiming more benefits and the cost of health care is rising.

Personal Finance asked the 10 largest (by membership) medical schemes, which collectively represent 70 percent of people who belong to a scheme, how they intend to save costs in 2017.

Their responses indicate that schemes are pinning their hopes on two strategies:

• Channelling members into using particular healthcare providers. This is done in one of two ways: either the scheme’s rules compel members to use particular providers or members pay lower contributions if they agree to use particular providers.

• Better management of the treatment of “high-risk” members, particularly those who have two or more medical conditions. Channelling includes: • Requiring members to use designated service providers (DSPs) when accessing treatment for the prescribed minimum benefits (PMBs);

• Requiring members to use participating providers (what the Medical Schemes Act calls managed-care arrangements); and

• Offering efficiency- discounted options (EDOs), which enable members to pay lower contributions in exchange for agreeing to use particular healthcare providers.

EDOs are sub- options of medical scheme options. Some schemes, such as Momentum Health, offer members the choice of more than one EDO per “parent” option. The sub- options are designed around members’ willingness to limit their choice of provider. A healthy person, for example, might agree to use the public healthcare sector for chronic care, because he or she is unlikely to use this benefit.

You should understand the implications if your scheme requires you to use a DSP, or if you join an EDO.

A DSP means you must use certain hospitals or networks of doctors when you are treated for a PMB, if you want the scheme to cover the total cost of the treatment. If you use a non-DSP, or are treated by a doctor who is not part of the network, the scheme is entitled to demand a co-payment from you (unless you did not use the DSP or the network because it was an emergency).

Members of EDOs agree to pay lower contributions (relative to the parent option) in return for having their choice of hospitals and doctors restricted when they are treated for all medical procedures, not just the PMBs.

In addition, the scheme may demand a co-payment for certain elective procedures.

The principal officers of the seven open schemes interviewed by Personal Finance, including Discovery Health Medical Scheme (DHMS), Bonitas Medical Fund, Momentum Health, Medshield, Bestmed and Fedhealth, and the largest closed scheme in South Africa, the Government Employees Medical Scheme, said their schemes already have, or will introduce, EDOs.

Momentum Health’s principal officer, Toni van den Bergh, said all of the scheme’s options, except one, have EDOs.

If, for example, the principal member on the Custom Option agrees to use a hospital on the scheme’s list of hospitals and the state healthcare sector when being treated for a chronic condition, his or her contribution will be reduced by R793, or 39 percent of the monthly premium, Van den Bergh said.

DHMS’s principal officer, Milton Streak, said his scheme has six EDOs, which can save principal members between R300 and R350 a month, or between 10 and 25 percent, compared with the “parent” plan. He estimated that nine percent of DHMS beneficiaries belong to EDOs.

LIMITATIONS OF DSPS

How schemes select DSPs is controversial, because the Medical Schemes Act does not oblige schemes to justify to members or the CMS why they chose certain