Prescribed Minimum Benefits (PMBs): Medical schemes need to consider the risks
Presenting an open-ended liability, the list of Prescribed Minimum Benefits (PMBs) is causing concern among medical schemes and administrators.
PMB legislation was introduced with good and sound intentions and is a necessity. However, PMBs present an open-ended liability for medical schemes and need to be managed effectively
The challenge for medical schemes and medical service providers is to reach agreement on PMBs. “While both parties want the best for the patient or member, service providers are not always mindful of cost and may refrain from diagnosing effective treatment that is also cost effective. This creates a sense of entitlement amongst patients that is detrimental to the longevity of medical schemes,” says Dr Tumi Seane, Executive of Managed Care Services, Sechaba Medical Solutions.
Staying ahead
Medical schemes need to move with the times and be in-the-know about pharmaceutical, technological and surgical advances as these have an effect on PMBs. They also need to develop relationships with medical service providers to define clinical protocols that take into consideration financial implications on medical schemes. “Above all, medical schemes need to have risk management protocols in place to deal with the open-ended liability that PMBs present,” says Seane.
Striking healthy balance
PMBs were legislated to avoid incidents where members lose their medical scheme cover in the event of a chronic illness, and as a result are placed in serious financial difficulties due to unfunded utilisation of medical services. “Before PMBs were legislated, patients were denied access to certain medications which often resulted in the patient being hospitalised. Medical schemes now assist members with access to care, optimising on wellness without the need for hospitalisation. The positives of the legislation are evident, however, the financial risks involved are extensive. The administration of PMBs needs to be regulated and a healthy balance achieved taking into account advances in medical fields,” explains Seane.
While individual patients will benefit from the legislation of PMBs, the abuse thereof will lead to the knock-on effect of increased premiums in the future. “Without a doubt, premiums will increase, making medical schemes less affordable. Members will have to pay more to belong to medical schemes and there is a good chance that employers and members will choose to cancel their membership.”
Effective management
The major challenge that the legislative framework presents is that it states that all schemes must pay at cost. “It is difficult to determine whether this implies an input cost or a cost determined by the service provider. The downside is that medical schemes now negotiate rates with specific service providers and members are forced to use these providers, limiting their choice of medical practitioners,” comments Seane.
“The best solution is education and through members’ understanding the implications of PMBs and service providers respecting the scheme-provider relationship, all parties can effectively manage the effects of PMBs.”
