Shake-up looms for medical schemes

Health Minister Aaron Motsoaledi is planning a major shake-up of the medical-scheme industry, with new rules on benefits, prices and governance, which he says will give consumers a better deal. The changes are contained in the Medical Schemes Amendment Bill.

Motsoaledi said he had presented the proposals to a cabinet committee on Tuesday.

The most crucial aspect of the bill was a proposal to introduce uniform tariffs for services and prohibit co-payments, potentially heralding a sea change for industry players and consumers.

At present, each medical scheme negotiates its own rates with service providers such as hospitals and doctors, while members face varying degrees of co-payments for their healthcare bills, depending on which medical-scheme options they belong to and the nature of their conditions.

“There must be a uniform tariff, the same rate for all, and they [providers] must ask for nothing from members,” Motsoaledi said on Wednesday.

The uniform tariff was intended to assist medical schemes, which had varying degrees of negotiating power depending on their size.

Exactly how these uniform tariffs would be determined remained to be seen, as the mechanism was not spelt out in the bill, he said. Guidance on this issue was expected to come from the Competition Commission’s health-market inquiry.

The inquiry is in its final stages and is due to publish its interim report and recommendations by the end of the month.

If they go through, the changes would be the first significant reforms to the sector in almost 15 years.

Motsoaledi said medical schemes would continue to exist as National Health Insurance (NHI) was rolled out, but they required a new regulatory framework to provide greater protection for members.

He expected to submit the bill to the cabinet along with an NHI bill once President Cyril Ramaphosa had been briefed on the bill.

If approved by the cabinet, the two bills would be gazetted for public comment at the same time, Motsoaledi said.
Key proposals in the bill included replacing prescribed minimum benefits (PMBs) with a new set of benefits that would include a greater emphasis on primary healthcare, he said.

PMBs were the minimum basket of care all medical schemes were required by law to provide to their members, but they did not adequately cater for patients’ needs and neglected important preventive measures such as immunisation.

Medical schemes had to reimburse claims for PMBs in full, and would be expected to do so too for the new package.

Motsoaledi said the weak governance of medical schemes was a major concern, as many schemes had been placed under curatorship due to problems with their boards of trustees.

The bill contained measures to strengthen board appointments and ensure that they had the appropriate skills.

He said Parmed, the medical scheme for MPs and the judiciary, was a prime example of a scheme with board membership rules that were not in the best interests of members.

Parmed’s rules made deputy speakers of the National Assembly automatically chairmen of its board of trustees, regardless of their skills.

The bill also contained measures to ensure brokers provided better value for money and tighter control of the options offered by medical schemes.

Motsoaledi emphasised in his budget speech in parliament on Tuesday that the private sector was to be involved in the provision of services under the NHI, but he told Business Day the cost of these services was of concern.

“The essence of the NHI is that patients must have access to both the private and public sector,” he said.

“My biggest gripe is the cost in the private sector.

“The NHI might decide to set prices as the NHS [UK National Health Service] does,” he said. – Business Day