medical schemes generally fall into one of two groups – those that have claimed
and those that are going to claim in the future.
that are yet to claim from their medical scheme, many often bemoan the fact
that it is a grudge purchase. They spend this money every month yet have
nothing to show for it. Insurance cover is, after all, an invisible
purchase, until one submits a claim.
members that have claimed, the minority seem to be satisfied with their medical
scheme. The refrain “rip off” is all too common. And, what is more,
this call is not limited to members – doctors and the press media are joining
in. For some reason the hospitals remain quiet on this issue!
there are far too many people that disparage medical schemes, there are
probably a similar number that actually have no idea just what a medical scheme
is and how it works.
schemes have been likened to stokvels, insurance companies and even trusts but little
emphasis seems to be placed on two very important facts viz. that medical
schemes are ‘owned’ by their members and that they are not-for-profit
organisations. They are required to act fairly and in the best interests
of ALL members that contribute a set amount each month into a risk pool of
funds from which their claims are settled in accordance with the registered
sounds very simple, but who gets what, how and when?
member of a medical scheme has a legally binding contract with the
scheme. The “contract” is set out in the rules of each scheme. The
rules contain details of the contributions payable by each member, the benefits
to which they are entitled and the conditions that must be met before a claim
will be paid.
medical scheme rules are stated in the positive which means that if a benefit
is not stated, a member has no entitlement to it.
contain a list of exclusions which are often specific claims that will not be
paid (such as cosmetic surgery) or limits and sub-limits on certain types of
claims. The important point is that the rules of a medical scheme are
binding on all members of the scheme. As a result, when the medical
scheme makes any kind of decision, such as whether to admit or reject a claim
from a member, that decision must be made with reference to the rules of the
scheme – the contract between the member and the medical scheme.
consult a doctor you effectively enter into a contract with him/her and your
medical scheme is not a party to that contract. Clearly medical schemes
do not render any kind of healthcare service to their members and their
function is simply to administer money – the members’ money.
is the only person that can diagnose and treat you and it goes without saying
that without doctors (and, of course, other healthcare professionals) there can
be no healthcare industry.
after consulting your doctor, he gives you an invoice for his time and advice
and legally you are liable to settle this invoice. If you fail to pay,
the doctor is fully entitled to sue you for payment.
If you are
a member of a medical scheme and the rules cover the treatment that you
received, you may submit the doctor’s invoice to the scheme and they will
reimburse your claim on the basis set out in the rules.
benefit option that you selected has limits, you will be liable for any
shortfall between what the doctor charged and the amount that the medical scheme
reimburses in terms of the rules.
doctors so angry?
cases a doctor’s single-minded objective is to save lives and to give patients
the best care that they possibly can. On the long road to qualifying and
becoming an independent self-sufficient practitioner, a doctor, typically, has
had to endure at least 6 years of undergraduate study, a 2-year
internship, a year of community service and the long hours, late night call
outs and other inconveniences that accompany this arduous journey. And for
those who wish to specialise, further training of anything from 4 to 6 years
and more is necessary. During this entire time, the pay is relatively meagre
and comes with the average doctor struggling to pay off student loans.
As if all
the above is not enough, doctors are now practising in a very litigious
environment where the ground is fertile for litigation against the slightest
hint of negligence. Medical mal-practice insurance costs have escalated
beyond belief with certain specialities now being forced to pay in excess of R
250 000 per annum to protect themselves against the threat of litigation and to
just defend themselves where negligence is often never proven.
reasonably see that the average doctor begins each day at least hoping that he
will be able to treat his patients in a way that is in keeping with his
intensive training and experience. He consults with his patient and a
course of treatment and management is agreed upon only to find that a call to
the patient’s medical scheme turns an already stressful day into a nightmare.
perceives the medical scheme to be engaging with him in a process that adds an
enormous administrative burden to his already full day (and for which he feels
inadequately remunerated) but worse still by telling him/her how to treat his
scheme sees it differently. As it has no contract with the doctor and as
it does not render any form of healthcare service, all that the medical scheme
is trying to do is to assist the doctor and his patient to understand the
financial benefits to which the patient (member) is entitled.
doctors appear to interpret this information as an indictment on their clinical
diagnosis and professional judgement when this should never be the case.
facts are – doctors may treat their patients as they see fit and as agreed
between doctor and patient. That is the first contract to which no
medical scheme is party.
contract (as between member (patient) and the medical scheme) comes into play
as soon as the member raises a query regarding the extent of his entitlement to
benefits in terms of the rules of the medical scheme – and remember that these
are there to provide consistency and fairness for all members.
relationship is a clinical one and the other is a financial one.
doctors don’t seem able to appreciate this point. Compounding the problem
is the fact that during the tenuous and arduous journey to self-sufficiency as
a practising doctor, the course of study at university is entirely devoid of
any training that could provide valuable insights into the business aspects of
the very complex healthcare industry of which they are such an integral
part. Doctors are simply not exposed to any business skills training or
healthcare funding insights that would allow them to better understand each
party’s distinct role and function in the system. The reality is that in
our modern world, doctors are running practices that are no different to many other
businesses and so it is no surprise that they are overwhelmed when, every day,
they are confronted with the difficulties of running their own business! To
further compound the problem, many of the organisations to which they are able
to turn for some assistance are equally inexperienced or misinformed in these
matters and are sadly driven by agendas that do not always stand up to careful
And so here
they are, thrust into the commercial world of the administration of medical
schemes where huge sums of money are changing hands and massive profits are
made by certain parties – excluding of course the medical schemes themselves –
remember they are not-for-profit organisations. As I have said above – without
any doctors there can be no healthcare anywhere in the world and therefore no
medical schemes and no administrators and no huge profits. And yet it seems
that when it comes to the money, the doctors are, for various reasons, at the
end of the food chain.
the doctors’ woes and having got past the perception that the medical scheme is
trying to tell him how to treat their patients, the medical scheme often short
pays his account. To a doctor, almost everything is a Prescribed Minimum
Benefit (PMB) and according to the Council for Medical Schemes (CMS) his
account must be paid in full without any kind of limit. Naturally,
doctors get angry when the medical scheme says that it cannot and will not pay
any amount demanded because it understands the law differently.
will label their interactions with their patients as an “emergency” and
therefore a PMB that must be paid in full. As with other examples, there
is a legal definition of an “emergency” that does not necessarily accord with a
clinical definition of “emergency”. The law may see cases as requiring
“urgent” treatment but not “immediate” treatment and so the matter may not,
after all, be a PMB. And so the differences between doctors and medical
There is no
way that doctors are suddenly going to study law and become lawyers.
Rightly, they are entitled to believe what they read in the press but it is
here that things again, take a turn for the worse. Very few journalists
reporting on medical matters are fully conversant with the law and the authorities
that are relied upon in the interpretation of the statutes. All too
often, journalists in all good faith report what they believe to be correct and
doctors pick up that “stompie” and so the treadmill begins.
doctors should not have to deal with these issues. They are trained to
treat and to heal and to save lives. They are not administrators or
lawyers but they may well have a case to be angry (even just a little) when
they see how much money is being made by other parties (again excluding the
medical schemes!) in the health care supply chain.
today believe that they are entitled to expect that their medical scheme must
settle all accounts in full. However, far too many people forget that
medical scheme membership is a private purchase in much the same way as sending
your children to a private versus government school or contracting with a
private security company rather than rely on the SAPS.
medical schemes are just that – private. The members choose a benefit
plan/option and level of contributions that both suits their needs and is
affordable to them and should recognise that a certain level of risk needs to
be assumed, in relation to the above parameters.
medical schemes are capable of assuming any level of risk contemplated –
against an appropriate contribution. The more members want, the more they
will pay because it is, at all times, members’ money that goes to settle
schemes are accused of being a rip-off when they refuse to settle a claim in
full or at all. As stated above, members claims are settled in terms of
the contract set out in the rules. Claims are settled from the risk pool
of funds into which members contribute. This means that if a claim is rejected
(because there is no benefit in the rules to which the member is entitled) or
is only settled in part (for the same reasons) the result is that the risk pool
is not depleted, thus leaving more funds available to settle legitimate claims
provided for in the rules.
claim is rejected or part paid, it does not result in a dividend being paid to
a trustee or officer of that scheme. The funds not paid remain in the
risk pool to settle the next legitimate claim from a member.
are entitled to the same benefits set out in each benefit option. And, only
members are entitled to benefits. The administrator, if there is one,
gets paid a fee to perform specific duties set out in a contract. The
trustees and principal officer of the scheme do not share in any surplus in the
scheme at year end. They are usually paid agreed upon fees that are
disclosed to members in the annual financial statements and any possible
surplus remains for the benefit of member’s future claims and/or a lesser increase
in contributions than would otherwise have been possible in ensuing years.
nobody has ownership of the scheme apart from its members. As a result,
it is hard to see just where the rip-off is. The simple truth of the
matter is that claims are rejected or short paid because the rules of the
scheme are being applied. Perhaps the member has no entitlement to the
benefit that he wants or else a set limit is applied because that is what the
rules provide and that is what the member contracted to receive in return for
the agreed upon contribution.
may be nothing more than the fact that so many people just do not read
contracts (rules, policies, etc). The typical person waits until he has a
claim and then cries foul when he finds that he does not have the cover that he
thought that he had or, perhaps, he has only limited cover. Someone has to be
at fault and medical schemes present ready on-hand fall guys.
wishes to take issue with the cost of administration or hospital charges or even
what a doctor charges, then aim must be taken at the correct party.
Medical schemes do not set prices – they take prices that are charged by the
supplier of the service. Medical schemes do not perform any kind of
healthcare service. They simply administer money that belongs to the
members. The cry of “rip-off” is misdirected and non-suited.
(Article written by Brian Watson, an Executive of Genesis Medical Scheme, October 2013)