PMB dispute a blessing in disguise for schemes

The legal dispute over Prescribed Minimum Benefits (PMBs) could be just the revitalising shake up the industry needs says Mark Arnold, Principal Officer of Resolution Health Medical Scheme (RHMS).

A ruling in the court case between the Council for Medical Schemes (CMS) and the Board of Healthcare Funders (BHF) regarding what schemes must pay for PMBs, is expected later this month before the court goes into recess.

According to Arnold, while the current Council for Medical Schemes’ (CMS) interpretation of the regulations regarding PMBs is problematic i.e. that schemes must pay out at whatever rate healthcare providers charge, it is forcing medical schemes to take a critical look at the way in which they manage supply and demand.

“The time has come for schemes to explore new economic and actuarial models and the current PMB dispute could be the catalyst for this positive development,” maintains Arnold. “As an industry, we need to face the fact that traditionally designed benefits have significantly influenced patient behaviour patterns, contributing to healthcare cost inflation and even the current impasse.”

“Traditional methods for managing supply and demand are proving increasingly inefficient and alternatives need to be found,” confirms Arnold. “The component management model, for example, actually introduces inefficiencies into the patient care cycle.”

Still used by some schemes, the component management model is based on sub-contracting the risk management of different disciplines to different service providers. In other words, a single healthcare provider is responsible for treating a specific condition, e.g. diabetes.

This might sound logical at first, but it detrimentally shifts the focus from ‘the patient’ to ‘the condition’. This artificially segments patients into different, singular disease entities, by categorising them ‘a diabetic’, for example, even though they may suffer from several inter-related conditions, such as diabetes, hypertension and heart disease.

At the same time, their medicine usage might be managed by another service provider, and hospital utilisation by yet another, building even more inefficiency and fragmentation into their treatment.

There are numerous chronic diseases and complex conditions, for example HIV, where the patient may present such a broad range of complications that treating them in provider ‘silos’ is neither feasible nor efficient.

According to Arnold, the traditional approach for managing demand in isolation is falling away globally. “Nowadays, the focus is no longer on the condition, but the patient and there are good reasons for this. The evidence suggests that concentrating on the optimum outcome (a healthy patient) rather than the apparent origin (a specific ailment), not only ensures that the desired result is achieved quicker, but also that future demand for care is reduced — decreasing costs and the overall healthcare burden.”

This holistic and outcomes-focused approach generates efficiencies and more effective, enduring care in a non-PMB environment, where a scheme can still impose the traditional restrictions based on frequency and value.

“Schemes need to adopt a new approach and proactively co-ordinate both the supply (healthcare provider) and demand (patient) side of the healthcare equation,” explains Arnold. “This means contracting with healthcare providers up front and negotiating agreements based on a fair value for the services needed to achieve a specific outcome; outcomes that are much broader and based on bundles of conditions, for example, cardiovascular.”

“On the demand side, it’s about being even more proactive by taking advantage of the latest technologies and electronic patient data. By analysing each beneficiary’s claims behaviour and history, we help members make timely, informed choices and ensure they have access to the most effective interventions,” says Arnold.

Although the contemporary approach to patient care and benefit design requires greater involvement and participation from schemes and managed care companies alike, this model will expose potential efficiencies and cost-reductions throughout the chain of patient care.

“It will start a virtuous circle: schemes will be able to remunerate healthcare providers with higher fees for providing better care because of the savings generated downstream as a result of a healthier membership base,” says Arnold.

(Press release, Resolution Health, October 2011)

 

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