Within our mission of providing optimal healthcare arrangements for our clients, we provide a comprehensive range of services which are customised for each client’s unique requirements.
Our clients’ requirements fall into one of the following four categories:
- Commercial Scheme Management
- In-house Scheme Management
- Management of healthcare services provided to employees
- Specialised healthcare management services
Please read through our range of services to see how we may best meet your requirements:
Our starting point in managing a client’s healthcare risk is to develop, in association with the client, terms of reference around the following principles:
Accessibility
This would require determining the levels of accessibility to healthcare according to geographic distribution of members, demographics and the healthcare services that are available.
Affordability
Notwithstanding unlimited demand for healthcare services and employer assistance one needs to determine what is realistically affordable for both employers and members.
The affordability issue also extends to issues such as post-retirement subsidies.
Sustainable
Healthcare cover is required for many decades into the future which requires that strategies are implemented to ensure the stability of risk pools and to plan for any future changes in the risk pool.
Mitigates Liabilities
This is linked to affordability and generally affects employers whose subsidy policies are for both active and pensioner members that incur substantial long-term liabilities.
The final terms of reference become the blue print against which all future healthcare risk management initiatives are made.
The key funding model areas where PROVIDENCE provides assistance are:
Subsidy policy
The subsidy policy is the most significant area for managing healthcare risk from a financial perspective as it not only affects consumer behaviour but also can incur significant and inequitable liabilities for an employer.
Accordingly we provide the following services in defining the subsidy policy:
- Make recommendations for an appropriate subsidy policy for members pre- and post-retirement in accordance with the terms of reference.
- Provide annual actuarial valuations of the liabilities arising out of any post-retirement subsidy obligations.
- Provide a framework within which employers and members can renegotiate outdated subsidy policies which are inequitable and unsustainable.
- Provide recommendations for achieving optimal tax efficiency in the structuring of the subsidy policy.
- Provide legal input on the wording of contractual commitments to current and former employees regarding subsidy policies.
- Develop an appropriate communication strategy to members regarding subsidy policies.
Post-Retirement Liability Management
Given the complexity of this subject it is handled separately under the subject of pre-funding on the home page.
Services provided by PROVIDENCE in this area include annual actuarial valuations of the liabilities arising out of any post-retirement subsidy obligations. PROVIDENCE also makes recommendations for the optimal funding of such obligations from a vehicle from a financial, legal and tax perspective.
Contribution Table
These have an impact on many of the key terms of reference e.g. affordability, equity, sustainability and undesirable cross-subsidies.
Against a background of the changing dynamics of a particular risk pool and the costs of delivering healthcare, over the long term, to such a risk pool, PROVIDENCE will design the structure and price of the contribution table for a risk pool to best meet the various terms of reference.
Re-Insurance
This is an important element of most risk pools. The reinsurance required for each risk pool needs to be structured according to the demographics of the risk pool, its size, the benefits and the financial position of the fund. PROVIDENCE gathers the appropriate data to assess these risks and makes recommendations for the structure of the reinsurance and thereafter attends to the negotiation of reinsurance quotations and contracts.
HIV/AIDS represents one of the biggest, if not the biggest, challenges to employers in South Africa. All employers will have a need to quantify the impact that HIV/AIDS will have on their organisation and to manage it.
Like many other aspects of healthcare a multi discipline approach is required in both quantifying and managing the impact of this disease.
PROVIDENCE provides the following services in connection with HIV/AIDS:
Risk Profiling
The risk to employer groups manifests in their medical schemes and their businesses. Medical scheme costs will escalate dramatically as the spread of the disease manifests. In addition, employers will be affected in all areas of their business including :
- absenteeism,
- loss of productivity,
- training,
- life and disability cover, and
- reduction in population in certain markets.
PROVIDENCE’s actuarial and clinical team will gather appropriate data for the purpose of profiling the impact that this disease will have on medical schemes as well as in all aspects of an employer’s business.
Strategy Development and Management
With HIV/AIDS there is no standard protocol for its management. Each medical scheme and/or employer requires a customised strategy for its unique circumstances. The range of interventions can be diverse, including communication and education, condom distribution, medication, vitamin supplements, treatment of STDs (to lower transmission rates) amongst members and sex workers in the communities, improving diets etc.
The management of healthcare risk has many legal dimensions to it and in this regard PROVIDENCE provides the following legal services:
Rules
The drafting of scheme rules and amendments thereto as required by legislation and/or the board of trustees. The submitting of proposed amendments to the board of trustees for approval before submission to the Registrar.
Contracts
The preparation of and/or perusal of agreements with contracted third party contractors for submission to the board of trustees together with recommendations. Providing recommendations to employers regarding appropriate wording in connection with subsidy policies.
Legislation & Statutory Compliance
Ensuring that schemes comply with all legal requirements of the Act or any other legislation that may affect the scheme including, inter alia, governance, financial and reporting requirements.
The provision of useful, user friendly, timely (real time) and accessible financial data as well as sound investment strategies are key to the management of healthcare risk. In this regard PROVIDENCE provides the following services:
Financials
The preparation of regular and complete financial statements for stakeholders. Alternatively, ensuring that the administrator prepares financial statements which meet ‘Best Practice Standards’. Making recommendations to the board of trustees with regard to the appropriate management of the scheme’s monies, including the allocation of monies between cash required for the payment of claims and cash that can be held for the longer term, and the appropriate investment of the scheme monies.
Investments
Ensuring that the scheme monies are invested according to the mandate of the board of trustees.
This is possibly where PROVIDENCE’s highest level of application and expertise lies. Whether members are on a commercial or in-house scheme, PROVIDENCE can provide assistance from the following range of services:
Benefit Design
Benefit design to keep with members’ requirements, market trends and new innovations. Corrective measures to discourage the over utilisation of benefits.
Managed Care Protocols
Appropriate protocols for managed care initiatives including hospital pre-authorisation, chronic medicine definitions and ex-gratia policies.
Delivery Model (FFS, HMO, etc) Design
Appropriate delivery models including fee-for-service, manage fee-for-service, staff model Health Maintenance Organisations (HMOs), Preferred Provider Organisations (PPOs), in-house clinics or a combination thereof.
Provider Negotiations
Negotiations with providers or groups of providers for the provision of the various disciplines required to deliver healthcare in terms of scheme rules and in respect of discounts, payment procedures and delivery protocols.
Preventative Care Programmes
Preventative care including wellness programmes and health checks
A well-informed and educated member has a better prospect of optimising the balance of quality and cost-effectiveness in the delivery of healthcare. Communication and education is therefore paramount and in this regard PROVIDENCE provides the following services:
Strategy
Develop and implement an overall communication strategy for the Scheme, incorporating all elements requiring communication to and education of the Members, the Management Board, Human Resource management of the Employer, providers and contractors, including inter alia:
- Explanation of benefits,
- Benefit changes,
- Contribution changes,
- Preferred provider arrangements,
- Administrative procedures,
- Use of Internet to communicate with the administrator,
- Advice on preventative care,
- Subsidy policies, including implications for retirement,
- Funding vehicles for post-retirement healthcare costs,
- Disease management,
- Emergency evacuation cover, and
- Overseas travel cover.
Member Guides/Newsletters
Prepare communication material including members’ guides, regular newsletters, covering letters, presentations etc.
Benefit/Rate Changes
Produce notices and/or any other form of communication for members and the employer pertaining to contribution increases and benefit changes.
Trustee Training
Educate the employer and/or trustees, where appropriate, on all aspects of medical scheme management including, inter alia, governance, fiduciary responsibilities and liabilities, compliance with the Act, financial management, interpretation of statistics, risk management and delivery models.
The management of healthcare risk revolves around the setting of benchmarks for key indicators, setting up measurements against the benchmarks and implementing corrective actions where appropriate. In this area PROVIDENCE provides the following services:
Data Management
The regular gathering of financial and claims data for the purpose of monitoring the financial and claiming patterns of the schemes and members with a view to making observations thereon and recommendations for corrective actions.
Benchmarking and Measurements
Monitor and measure the service standards of third party contractors and to make recommendations to the Management Board when appropriate.
Third Party Provider Management
Make recommendations to the board of trustees with regard to the provision of Appropriate information, reports and statistics from third party contractors.
Preparation of Reports
Prepare annual budgets and projections. Make recommendations to the stakeholders regarding the services provided on the fee charged, including annual escalations of the various contracted third parties.