Medical aids advised on efficient coverage

Medical scheme members often bemoan the fact that many options either do not pay for their day-to-day health-care needs, or that these costs are only covered from savings accounts, which are soon depleted.

At its recent medical scheme conference, the Board of Healthcare Funders' (BHF) head of benefits and risk, Rajesh Patel, suggested that schemes should phase out hospital plans that provide minimal day-to-day cover, and diminish the role of savings accounts in funding visits to a general practitioner and prescribed medicines.

He said international data showed schemes could save as much as 25% of their health-care costs — particularly hospital and more expensive treatments — by providing comprehensive primary and preventative health-care benefits.

In addition, conference delegates heard that primary and preventative health-care benefits are likely to feature prominently in National Health Insurance (NHI), to which schemes will have to align their prescribed minimum benefits (PMBs) during the transition to the new health system.

But medical schemes tend to offer unlimited access to GPs and prescribed medicines to members who agree to use only one GP whenever possible and to access specialists only when referred to them. This typically happens on lower-cost options.

As more members are squeezed by contribution increases above inflation, more scheme options may offer this trade-off, but on higher options, schemes generally still give members the freedom to choose doctors for fear of losing them to competitors.

The Government Employees Medical Scheme's two lowest cost options, the Sapphire and Beryl options, offer members unlimited access to GPs as long as members consult a GP in the scheme's network when possible. Specialist cover is based on a referral from a GP.

GEMS COO Dr Stanley Moloabi, who will take over as the principal officer in 2020, told the BHF conference the scheme had achieved a 17% cost saving on the Emerald Value Option which also has a GP network and a hospital network.

The overall trend the scheme is facing is one of rising PMB costs — the percentage of health-care costs GEMS spent on PMBs has risen sharply over the past six years, from 44% of all claims to 62%.

Some of this increase is attributable to providers charging more than the scheme rate for PMBs because they know schemes have to cover the costs of these benefits in full. Payments in excess of the scheme rate have increased by 19% a year, Moloabi said.

The current PMBs include many hospital admissions and day-to-day health-care needs are covered only if they are one of 25 common chronic conditions or the services fall under one of 270 listed diagnoses.

Moloabi said GEMS data also showed that members who use more than one GP increase costs by 4% to 8%. Preventing members from visiting specialists without first seeing a GP increases costs by 12%.

The savings from restricting members to a single GP and specialist referrals can offset the cost of providing greater primary healthcare benefits such as unlimited GP visits and medicines, which ultimately save higher hospital and related costs, he said.

But Jeremy Yatt, principal officer of Fedhealth, which also offers unlimited GP access on its lower-cost MyFed and FlexiFed1 options, said while intuitively it makes sense that schemes will save costs by paying for day-to-day benefits, Fedhealth's data is less conclusive. He said the scheme is very much in favour of members using a single GP and specialists on referral only, and has also introduced many preventative-care benefits, but there are too many complex factors at play that determine whether or not cost savings are achieved.

Vishal Brijlal, an adviser with the Clinton Health Access Initiative, made another argument at the BHF conference in favour of giving members unlimited access to primary health-care benefits. He said it would ensure that everyone gets the treatment they need and not inconsistent treatment based on one's income.

Currently, if you have a condition that does not qualify as a PMB, you will either have to pay out of pocket or from a medical savings account if your scheme option offers one, or you must wait for your health to deteriorate to such an extent that your condition does qualify as a PMB, he said.

Consistency of treatment and clinical need should dictate how care is provided, not what scheme you belong to or if you have a medical savings account or not, he said.

Patel said medical schemes should provide a basic benefit package of health-care services in line with those in the public sector rather than benefits defined in terms of diagnosis, as is the case with the PMBs.

A review of the PMBs with a view to introducing more primary health care and aligning them with the as-yet-to-be detailed NHI benefits, has been under way for two years. So far no changes to the Medical Schemes Act regulations governing the PMBs have been proposed.

Patel suggested that schemes should not wait for the PMBs to be revised but should do their own analysis of the cost savings primary health-care benefits can provide.

He said the World Health Organisation, in a declaration in Astana in Kazakhstan last year, said that strengthening primary health care is the most inclusive, effective and efficient way to enhance people's physical and mental health as well as social wellbeing and is the cornerstone of a sustainable, universal health system.

If schemes embrace this they will ban hospital plans and reduce the role of medical savings accounts, he said.

The draft NHI Bill proposes that medical schemes will in future only be allowed to offer benefits that complement and not duplicate those offered under NHI, but there isn't consensus among policymakers and the health-care industry on this.

Brijlal said you do not need to have benefits funded by a single funder to get consistent treatment — all you need is for everyone to be reimbursed according to a common, regulated set of benefits that treats everyone fairly and provides care when they need it.

He said the NHI work stream on health-care benefits, of which he is a member, has gone through an extensive exercise of defining primary health-care services that the public sector should provide.

A common set of benefits will also eliminate the problems that arise from members buying up to a higher option when they need more care and downgrading again afterwards, he said.

Both Patel and Brijlal agreed that some income cross-subsidisation — where wealthier members cross-subsidise the costs of lower-income earners — should be introduced to ensure schemes can cater for low earners.

Correction: August 11 2019

An earlier version of this article referred to Dr Stanley Moloabi as GEMS pincipal officer. He is currently COO and will take over as pincipal officer in 2020.