The need to be a Project Manager when it comes to your health expenses.

by Carol Lenzi CFP® - also known as Kit

The term ‘project manager’ may seem rather daunting - as if you are taking on a new role at some organisation.  Here, we will be referring to YOU taking more control of your health and expenses by being aware of the health care systems available and the expenses related to health care so that you can make informed decisions. If you are fortunate to have medical cover, we’ll speak a little about this too.

Your health is your wealth.

Many of us can control our health from an early age by being physically and mentally fit.  We balance exercise and eating right and make a number of right choices along the way. Whilst some of us have been hard on our bodies and only find out what our younger-selves have done to us, in our late 40’s or 50’s.

Sadly, for some, there was no choice. Having conditions that are hereditary, based on our genetic make-up, whether we were involved in an accident - we have had to endure the consequences without reasoning or prior warning. 

Either way, having to deal with health problems, puts tremendous strain on people’s lives physically, mentally - financially.

On-going checks and balances.

Regular checks and balances on our physical and mental health is important.  Such as dental and eye checks, urologist-, gynaecologist- or obstetricians visits, and counselling to help people through life situations, to name a few. High risk individuals with a history of illness or disease in the family may require more frequent check-ups.  Older men and women will need to do certain checks as they fall into the high-risk category for certain conditions. As one gets older a full medical assessment can be performed all at once at a clinic which does the entire analysis and provides a thorough health report.  This is similar to a diagnostic performed on a vehicle, and can help pick up potential health problems so that it can be monitored and treated before it becomes problematic or more difficult to treat.

The sad reality is that most people only seek medical attention when something goes wrong.  But wouldn’t it be a good thing if we are one step ahead and do a regular ‘diagnostic’ check on our bodies to identify and treat potential concerns before they become too problematic? This ‘diagnostic’ does come at a cost, but it may well be worth it in the end. At least you have a choice.

Health care, medical schemes or insurance.
Access to health care is a basic human right in South Africa.  We have both public- and private health care services available. Public health care is owned and funded by the State, while private health care is owned and managed by a private entity whether a company or individuals.  With our public health care services being largely under-resourced (in accordance with a report from SAHRC confirming this), those that can afford private health care, tend to do so.

Sadly, majority of South Africans have no option, but to rely on public health care services.  To access free public health care services, one needs to fulfil certain criteria such as passing a means test. As you know, government is introducing a National Health Insurance (NHI) in an attempt to address the funding of health care services and for quality health care to be accessible to all South Africans - this is a topic for another discussion.

Private health care is considered to be a more effective health care system.  Many people who utilise private health care services belong to a medical scheme or have some type of health insurance.  Belonging to either, can help pay towards private health care services in some or other way.

A medical scheme is a non-profit organisation, governed by a board of trustees, and registered with the Council of Medical Schemes.  This means that all member’s contributions are pooled together to pay for medical claims as per the plan that the member is on and any surplus funds are then transferred to reserves for the security and benefit of members.  A medical scheme does not make any profits. A medical scheme is administered by an administrator.  For instance, ABC Health (Pty) Ltd provides administration services to the ABC Health Medical Scheme.  ABC Health (Pty) Ltd will be paid an administration fee for providing administration services to the medical scheme.  Health insurance is not a medical scheme.  It is a policy of insurance that provides cover on the happening of an event. Terms and conditions of the cover is stipulated in the policy of insurance.

Health care service providers and medical schemes.

If a health care service provider, such as a doctor or a hospital, is ‘contracted into a medical scheme’, they should charge the medical scheme rates that are set out.  However, it is not a requirement for doctors and hospitals to be ‘contracted into’ medical schemes and in turn charge their scheme rates.  What this means is that the health care provider can charge what they believe their service is worth.  The medical scheme will only pay up to the limit of the plan that their member is on. The patient decides whether the costs of the health care providers are reasonable or whether to seek a health care provider that is ‘contracted in’ to his or her medical scheme for the treatment.

Some doctors may be open to discussing their fees, while others may be rigid with their pricing structures. With the limited number of specialists in the country and the high demand for specialised treatment, the fees for specialists are relatively inelastic – which means that if the price is higher, there is enough consumers (patients) that are willing to pay the high price. It would not make sense for the doctor to reduce fees if there is a demand for specialist treatment.

One too many rugby tackles, Mr James.

When it comes to a planned procedure, we are in a position to gather information beforehand to enable us to make an informed decision.  Let’s take a real-life scenario of Mr James, who played one too many rigorous rugby games during his younger years and now at the age of 52 has to undergo a shoulder operation. 

But before we get to that point, he would have first consulted with his General Practitioner (GP) (R450) who may have attempted to treat him and suggested a series of physio sessions (R600 x 4).  After some time, there is no improvement.  Mr James returns to the GP (R450) who then refers him to a specialist.  He consults with the specialist (R1,200) who provides immediate relief by giving cortisone injections (R500), and requests Mr James to have x-rays and a sonar done (R2,500) by a radiologist in two weeks’ time as the cortisone injections, just administered needs to wear off first.  These radiology reports will aid the specialist in deciding a way forward for Mr James.  Mr James returns to see the specialist (R800) with the x-rays and sonars a few weeks later. After looking at the x-rays and sonar, the specialist suggests shoulder surgery and provides the relevant diagnosis (ICD10) and procedure codes that he will be performing. 

Fortunately for Mr James, he is on a medical scheme and provides these codes to the medical scheme administrator.  The medical scheme will help pay for his in-hospital shoulder operation as they are ‘contracted in’.  Most of the out of hospital expenses that he incurred (totalling ±R7,100) leading up to the surgery, would have been paid either from his medical savings up to certain limits, or he would have had to pay cash if there was no savings, or if his savings was depleted.

Mr James contacts his medical scheme for an ‘authorisation number’.  What is important for him to find out is whether his plan covers what the doctor charges, or in other words, whether the doctor is ‘contracted in’ at medical scheme rates.  It is also good for him to find out what procedures are covered by the medical scheme and how it is covered – i.e., is it covered under the hospitalisation benefit, or will it be paid from the medical savings if there is any savings left.  Certain procedure codes that the doctors wish to perform are not covered by the medical scheme, for whatever reason.  Mr James can choose to discuss an alternate procedure that is covered by the medical scheme or choose to accept the suggested procedure and pay out of his own pocket. Mr James could also enter into a discussion with his medical scheme as to why they do not cover the procedure that the doctor is recommending and whether they will provide a concession for the procedure to be done as this is what the specialist doctor has recommended. 

Although Mr James has savings on his medical scheme plan, he is entitled to know how much will be taken from his medical savings account, if anything. When going in for a procedure, there is a separation of services among health care providers and each one will bill for their services separately:  There is the hospital bill which includes the theatre costs, hospital stay and other costs while in-hospital, such as medication administered in hospital, x-rays, physio and so on.  There is the specialist’s bill for performing the operation, the anaesthetist’s bill for administering and controlling the anaesthetic during the procedure, and any other doctor that may be required to perform the procedure.    

Being a Project Manager of your medical expenses.

To avoid any nasty surprises, there is a need to ascertain what your health care costs will be when you are in need of a procedure, and what your medical scheme plan will pay. 

If all of this is still daunting to you, allow a knowledgeable medical scheme consultant to explain and assist you through this process, so that you are empowered to ask the relevant questions.

In closing, pay attention to your health.
If you don’t, in time you may find yourself having to pay others to pay attention for you.