With many medical schemes currently finalising their benefits and contributions for 2016, it’s important for consumers to know how to manage their medical costs. Essential to this is a good relationship with a broker who has the knowledge, skills and understanding to guide you.
This is according to Jeremy Yatt, newly appointed Principal Officer of Fedhealth. “Employer groups and individual members should already start engaging their brokers to understand the benefits their employees require and how the new pricing structures could impact them,” he continues.
Annual contribution increases are calculated around risk and the cost of healthcare itself. “Unfortunately medical inflation always runs high. Instead of new technologies bringing down the cost of healthcare, they tend to push the price up. However, every year there is a tough negotiation around the increases. These increases are looked at in conjunction with the general CPI increase and are in relation to the overall cost of the risk pool. There is a strong push from our side to make sure those costs are kept at 11% and below. Brokers receive 3% commission, which is for the role they play in helping members get the most out of their medical aids.”
Prescribed Minimum Benefits (PMBs) are key to the management of medical costs, but Yatt acknowledges that it’s a minefield that many people don’t understand. “PMBs are a set of defined benefits that members have access to, covering a specific number of chronic benefits. Consumers interpret that simply as ‘PMBs paid in full’; when in reality there are a range of rules relating to how the PMBs are paid. Schemes would never be able to pay all PMBs in full, it’s simply not sustainable.”
This month the Minister of Health, Aaron Motsoaledi, proposed a very welcome review of Regulation 8 of the Medical Schemes Act which deals with PMBs. If the review is accepted it will limit the open liability schemes currently face and provide much needed clarity on the reimbursement rate. “It will also provide a far better solution for members in the long run as to date the current regulations have allowed certain providers to abuse the system and this has pushed up the cost of private healthcare,” notes Yatt.
Yatt points out that there are already a range of methods that have been identified to help schemes keep the costs contained. One of these methods of containing costs is by encouraging members to use Designated Service Providers (DSPs) and doctor networks. If members understand their DSP and how to use it, costs are generally covered in full.
For consumers to get the maximum benefit out of PMBs, they are required to work within certain parameters. Members who don’t use these DSPs and doctor networks run the risk of a co-payment of as much as 40% in many schemes. “We work with brokers to educate members about the providers and networks so there are no co-payment situations. It’s the broker’s responsibility to understand the member’s condition, clarify it with the scheme and then to help the member clearly understand how it will be covered according to treatment protocols. This is why consumer education and relationships with brokers are so important.”
Although Fedhealth uses mostly broker business, the scheme also deals directly with employers. “We do a lot of our own member education,” explains Yatt. “Social media and the LiveChat option on our website are important tools for communication. These are cost effective, easy methods of communication that have great reach.”
Another key tool in the Fedhealth arsenal is the use of added value wellness benefits designed to keep members healthy, such as sports sponsorships and membership discounts for a number of health and wellness initiatives.
“The encouragement of health keeps costs down because the healthier the members of a scheme, the lower the increases. We understand that it’s tough out there and every rand matters and we’re constantly looking for ways to innovate and seek out cost savings for our members. We know we’ve done our job right if we can create an environment where it’s not necessary for our members to be paying additional costs,” concludes Yatt.