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Mediclinic News : Business Report special project: Council for Medical Schemes

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Business Report special project: Council for Medical Schemes

Date

2017-03-31

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BUSINESS REPORT/HEALTH NEWS DAILY NEWSLETTER Lifestyle diseases epidemic impacting medical schemes Diseases related to unhealthy lifestyles and poor diet are an increasing health and economic burden that also impact negatively on medical schemes. It is an epidemic that requires urgent attention according to Dr Guni Goolab, principal officer of the Government Employees’ Medical Scheme (GEMS). Statistics South Africa analysis of mortality and causes of death found that non-communicable diseases (NCDs), such as type 2 diabetes, stroke and cardiovascular diseases, were responsible for 55.5 percent of all deaths in the country in 2015. This, said Goolab, highlights the challenge they pose. Millions of South Africans suffer from, and are being treated for NCDs. Aside from the immense suffering they cause, they represent a significant risk to the local healthcare sector, the successful implementation of National Health Insurance as well as the broader economy. Goolab said that if we are to mitigate the massive risk these diseases pose to the sustainability of our entire healthcare system, we need to work together in a determined and co-ordinated manner while there is still time to do so. It would, he adds, be misleading to suggest that all NCDs are related to poor lifestyle choices. Factors that can lead to their development include cancers, type 2 diabetes and heart diseases. They may include genetic predisposition and environment. However, the World Health Organisation (WHO) rates the prevalence of NCDs a growing global “epidemic” driven primarily by: physical inactivity, unhealthy diets, tobacco use, excessive use of alcohol and unhealthy diets. And the considerable socio-economic costs make their prevention and control a critical imperative for the 21st century. Goolab attributes the rise in NCDs in South Africa to: the increased consumption of fast and convenience foods high in sugar, carbohydrates, salt and saturated fats; the heavy use of tobacco and alcohol; as well as the increasingly sedentary lifestyles of people, particularly in urban areas. Poorer people also find it considerably more difficult to afford healthy foods. He said that while government leads the way in addressing these problems through legislation aimed at reducing the content of unhealthy salt and sugars in our food, as well as tobacco use, a unified approach from all sectors of society is needed. Every South African must be more aware of the threats that the adoption of an unhealthy lifestyle poses, and be empowered to take greater responsibility for their own health. Medical schemes are particularly affected and GEMS has consequently re-aligned its products, services and benefits to emphasise preventative over curative interventions to reduce the risks to its members. Goolab said the scheme has adopted highly proactive measures in dealing with these healthcare conditions. These include innovative managed healthcare programmes, selective underwriting measures, public and member educational and awareness campaigns, as well as effective disease management programmes. He said more than 300 000 members are currently enrolled on at least one of the scheme’s disease management programmes. Back to top Beneficiary registry will be in public interest THE proposed beneficiary registry is in the public interest and will enable the Council for Medical Schemes (CMS) to optimally fulfil its mandate to protect medical scheme beneficiaries, according to Dr Elsabé Conradie, General Manager: Stakeholder Relations. It will, she added, allow the council to understand the geographical and demographical distribution of all members and to share pertinent information. Conradie said this will ensure their rights and privileges in terms of the Medical Schemes Act are optimised and enhance the council’s mandate to effectively regulate the medical schemes industry. Presently medical schemes allow third party administrators to keep data without, in most cases, acquiring the required member consent. Several schemes have appointed the state as a designated service provider and, in the absence of any verifying mechanisms, schemes are rarely being billed for treatment. This, said Conradie, is not in the public interest as it adds to the burden of the already cash-strapped and overburdened state facilities. She said that if they are empowered to verify active membership and raise a fee for services rendered, the ratio of payments by private medical schemes to state would improve. Conradie said the potential for fraud committed by patients purporting to be medical scheme members would also decrease and this would leave more money in the public coffers, allowing the state to procure better services for its citizens and is therefore directly in the public interest. Moreover, Conradie said, the collection of basic demographic member data at a more granular level will allow the CMS and the National Department of Health to base health insurance policy decisions on more precise business intelligence. This will benefit all members as well as the public at large and ensure that future healthcare interventions are better focused and scientifically based. Collecting individualised data will enable the CMS to verify aggregated figures submitted by medical schemes as part of the statutory return process, such as member movement between options as well as the worrying trend of buying down. The process, she emphasises, will be subjected to rigorous legal scrutiny before being finally implemented. Information deficit is detrimental to members THE information imbalance within the private healthcare market makes it difficult for consumers to make informed decisions, according to Dr Elsabe Conradie, General Manager: Stakeholder Relations at the Council for Medical Schemes (CMS). She said that in many instances, third party intermediaries are deployed to provide information on which medical scheme is the most suitable for a consumer’s particular needs and which benefit option to purchase. Conradie said it is a lack of sovereignty that worsens with the severity and complexity of condition or situation, but on the other hand, hospitals and other healthcare providers enjoy the advantage of having access to information. She said it is an asymmetry that causes increased prices for health services, because it gives market power to the holder of better information. Consumers are powerless to negotiate prices. The CMS regulates medical schemes, administrators and managed care organisations, as stipulated in the Medical Schemes Act. Its role is to protect beneficiaries, maximise access to coverage and protect the public interest. Conradie explain that without regulation, only private interests would prevail, reducing access and accountability. She said it is also important to bear in mind that the South African healthcare system, with its strong private sector and a public sector with many challenges, differs from other countries. The latter have mostly only one healthcare system and various role players. Moreover, Conradie said, in this country of the current population of about 54-million only 8,8-million, (16 percent) are beneficiaries of medical schemes delivering private healthcare. There are currently 82 registered medical schemes, of which 22 are open. The remainder are restricted schemes. They all offer various benefit options tailored to particular needs and include hospital cover, optional day-to-day benefits and chronic benefits for prescribed minimum benefits (PMB) conditions. In turn, PMBs include 270 serious health conditions, any emergency condition, and 25 chronic diseases. Designed to offer maximum protection to members of schemes irrespective of which option they choose, they aim to ensure that when members face catastrophic healthcare events they are not financially ruined. PMBs are also geared to prevent individuals from losing their medical scheme cover in the event of serious illness. This reduces the consequent risk of unfunded utilisation of public hospitals and encourages improved efficiency in the allocation of private and public healthcare resources. According to Regulation 8 of the Act, medical schemes must pay PMBs in full, without co-payment or the use of deductibles, the diagnosis, treatment and care costs of the PMB conditions. Although prescribed benefits must be funded in full, medical schemes are allowed to effectively manage the costs through the appointment of designated service providers who render services at a negotiated rate. They also use drug formularies and other tools such as managed care interventions, protocols and pre-authorisation. Members using designated networks are then protected against any additional costs, such as co-payments. In emergencies, members may not have a choice but to use providers out of network, but schemes may penalise members for voluntarily making use of non-designated service providers if it is not an emergency. Industry can expect all current CMS initiatives to proceed THE industry can expect all current Council for Medical Schemes initiatives to proceed according to its recently appointed acting chief executive, Dr Sipho Kabane. These include the prescribed minimum benefits definitions, review and code of conduct as well as development of the low-cost benefit option, supporting the NHI and the Health Market Inquiry. Dr Kabane joined the council as a senior strategist last year. Formerly a senior manager in the health sector, he also served as a medical practitioner in the Free State. Assuring that he is fully aware of the battles beneficiaries of medical schemes face to derive optimal benefits from their schemes in exchange of their contributions, he said allow the council to understand the geographical and demographical distribution of all members and to share pertinent information allow the council to understand the geographical and demographical distribution of all members and to share pertinent information, he said he is also a healthcare quality activist, who believes that the good health outcomes that we all aspire for, need to be driven by deliberately embedding clinical governance in our day-to-day contact with patients, irrespective of the sector we operate in. Cost-containment crucial The healthcare industry continues to be impacted by macro-economic effects such as unemployment; rising cost of living and increased prevalence of chronic lifestyle diseases. There are also escalating healthcare treatment costs. Gerhard Van Emmenis, acting principal officer Bonitas Medical Fund, said that against this backdrop, the scheme has, over the past two years, implemented various initiatives to assist in managing future claims costs without impacting the quality of benefits that members access. Last year, for example, and in keeping with a commitment to strategic purchasing, Bonitas commenced negotiations with the three large hospital groups to create a network of designated service providers, a strategy projected to result in a saving of over R100-million this year and around R500-million over the next three years, in present value terms. This, he said, will directly impact future contribution increases and affordability.
Created at 2017/04/06 04:09 PM by Mediclinic
Last modified at 2017/04/06 04:09 PM by Mediclinic