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

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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

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