Updated 21 May 2013

Managed care key to ultimate survival of medical schemes

Managed care initiatives will prove vital to the ultimate sustainability and survival of the South African medical scheme market.


Managed care initiatives will prove vital to the ultimate sustainability and survival of the South African medical scheme market, particularly under the auspices of the National Health Insurance (NHI). This is according to Professor Jacques Snyman, Product Development Director of Agility Africa, administrator and risk Management Company for medical schemes, including Resolution Health, during his address at the Sustainability of Medical Aid Schemes Seminar today.

“Managed care is typically referred to as a collection of techniques aimed at influencing the clinical behaviour of healthcare providers and patients, often by integrating the payment and delivery of healthcare. Good managed care should take into account clinical, as well as financial, risk management whilst considering the appropriateness and cost-effectiveness of health services within the constraints of what is affordable,” Professor Snyman explained.

According to Professor Snyman, very few medical schemes successfully deploy managed care interventions and, those that do, continue to struggle with common hurdles. “The biggest challenge is to ensure that managed care is an integrated system and process of correct care where all providers are involved and responsible for ‘nudging’ the patient in the right direction. As a result, the responsibility lies with doctors, pharmacists, hospital staff, funders and any other healthcare provider involved in the patient’s wellbeing. Ensuring that each role-player contributes to the process is challenging and very few medical schemes are able to successfully manage the process,” says Professor Snyman.

However, getting it right by placing a strong focus on practical, proactive care to ensure that patient diseases are adequately managed, could translate into huge cost savings. “One of our recent case studies found that high risk patients were responsible for up to 80% of a medical scheme’s total cost and clinical risk exposure, despite the group’s small size. Proactively managing the health of high risk patients could result in significant reductions in hospitalisation, length of stay, claims and overall healthcare expenditure,” Snyman said.

Snyman refers to some of Agility Africa’s managed care case studies as example:

  • Implementation of an integrated, employer-based solution where corporate wellness, human capital strategies and health insurance were duly integrated to ensure better holistic outcomes,
    • Achieved a hospital saving of R107 000 on direct health insurance of employer group
    • Resulted in a R146 000 reduction in absenteeism costs per month for the employer group
  • Ensuring adherence to medicines prescribed, perhaps one of the most neglected parts of therapy, resulted in a 50% reduction in hospitalisation (frequency and duration of stay) amongst patients
  • Early risk identification and concurrent management of hospital benefits translated into:
    • A R18 012 360 reduction in hospitalisation costs for a client scheme
    • A R33 570 716 reduction in length of stay for hospitalised patients
  • The holistic management of at-risk individuals with cardiovascular disease reduced the projected claims per patient per day from R61.36 in Year One, to R44.91 in Year Two to R26.53 in Year Three.

“The evident savings on healthcare costs clearly demonstrates the critical need for medical schemes to start investing in managed care initiatives. Similarly, the survival of NHI is equally dependant on managed care and its associated costs. A critical success point is firstly whether the NHI has Managed Care in place, and secondly if it has quality clinical outcomes. Here the third party supplier has become Government, and essentially, irrespective of the Managed Care funding model implemented by the NHI, Government will need to deliver good quality clinical services on which they will be measured” he states.

The Sustainability of Medical Aid Schemes Seminar offered a broad overview of how Medical Schemes can expect to be affected over the next five years during which the NHI will be implemented, and expanded on the financial and legal framework, and the structure and strategy on the best way forward for the sustainability of Medical Schemes in 2013.


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