In an attempt to reduce the overall costs of healthcare, medical schemes are introducing various types of cost-management techniques, some of which directly increase the complexity for individuals.
These include, among others:
Alternative reimbursement models
Alternative reimbursement models where the costs for certain procedures performed in hospital are negotiated upfront with the hospital group. For example, the fee for surgically removing an appendix may be agreed at a specific price. So, regardless of the actual cost of the appendectomy, the medical scheme will only pay that price and the hospital will benefit if the actual cost was lower or face a loss if the actual cost is more.
These alternative reimbursement arrangements help medical schemes to stabilise costs, but more importantly, incentivise hospitals to be more efficient when performing procedures. A more efficient hospital would be able to reduce the actual cost of performing a procedure, thereby benefiting from the difference between the actual cost and the fee charged. Clearly, these types of arrangements would only work under tight monitoring and management of the quality and outcomes of care to avoid shortcuts being taken to reduce costs.
Approved medication lists
Many medical schemes have approved medication lists where they pay in full for medication on these lists. Sometimes the lists will be as simple as 'generic medication is paid in full', but at times the lists can become extremely complex and difficult to understand. The justification for these medication lists is to steer members towards medication that is not only cheaper, but also more effective in treating conditions and therefore keep follow-up costs to a minimum.
Reimbursing service providers
Reimbursing service providers more when they perform procedures in doctors’ rooms and not in hospital. This should reduce the overall costs associated with certain procedures as the ward and theatre fees and the costs of anaesthetists and nurses are not incurred. To encourage this movement from in-hospital procedures to in-room procedures, some medical schemes impose co-payments for treatment obtained in a hospital. Members who are not aware of these conditions may choose to access care through hospitals without realising that they may incur a co-payment.
Disease management programmes
Disease management programmes specify treatment plans and medicines that individuals must use if registered for certain diseases, such as chronic conditions. The treatment plans are designed to provide more appropriate and efficient care to individuals, with the intention to reduce complications and overall costs in the long term. This again is an area where confusion may arise for individuals.
Network and designated service provider
Introducing networks and designated service providers (DSPs) where members must access their healthcare services from specific, defined service providers for their claims to be paid in full. The justification for this is that medical schemes will negotiate reimbursement rates with these providers upfront, allowing for better management of overall costs as well as better control over negotiations. If members don’t want to incur copayments, they will visit providers who participate the network. Providers, wanting to ensure that their patient numbers do not decrease, may opt to join the network.
