Medical schemes need better governance

Pretoria - Medical schemes governance was under the spotlight on Tuesday at the release of the Council for Medical Schemes’ Annual Report for 2013/2014 in Centurion, Pretoria.

Stephen Mmatli, who heads up the CMS’s Compliance and Investigations Unit, admitted that the statutory body charged with regulating the industry does not have much in the way of teeth to bring schemes with poor governance into line.

Medshield and Sizwe, both placed under curatorship within the last year, provide good examples of how poor quality of management leads to bad governance.

One obvious target for anyone seeking to tighten governance is trustees of schemes. “The calibre of trustees elected onto the board of trustees remains unchanged,” said Mmatli.

Members complain that the appointment of trustees is in some cases manipulated, which is hardly surprising given that there are potentially rich pickings.

“Current legislative framework and previous CMS papers do not regulate the amount paid as trustee fees,” said Mmtali, and a graph on the fees paid to principal officers showed that Medshield’s PO had almost doubled between 2012 and 2013.

A sorry tale unfolded of abuses: of trustees paying themselves inordinate fees, of money spent on overseas trips and other excesses.

The CMS has, since 2011, been working on developing trustee remuneration guidelines. In addition to the potential for abuse, there is no clear understanding by members and trustees of the role of the board of trustees.

Members of schemes have levied a series of governance-related complaints against various schemes, among them:

• Annual general meetings are badly timed or inaccessible, preventing members from attending. It follows that there is often poor attendance by members at AGMs. Mmatli added that those who do attend often don’t participate.
• Importantly, members who do participate will apparently often raise matters which are not then minuted and tabled for discussion.
• Agenda items are not properly ventilated.

Mmatli expressed a desire for members to take governance matters in hand, but it is hard to see what they can achieve when the CMS itself is to some extent hamstrung. The CMS put forward a Medical Schemes Amendment Act in 2004 (it was withdrawn when government focused instead on national health insurance), with the aim in part of strengthening governance of medical schemes.

The act is once again on the table, but Mmatli said there is no way of knowing if and when it will be passed; it has been suggested that it might only be passed towards the end of 2015. In the meantime, he said, the organisation is pinning its hopes on putting more power into the hands of medical scheme members by, for example, providing them with more information through online sources.

What comes out of your pocket

CMS figures showed that medical schemes are paying only just over half of the fees charged by dentists, 67.4% of the cost of medicines, nearly 70% of allied health professions (such as physiotherapists), and only just over 72% of general practitioners’ fees. 

This means the member has to pay the balance.

Overall, 53% of claims paid out are for prescribed minimum benefits – chronic conditions like heart failure, diabetes and asthma fall under this category, as does emergency medical care.

Prescribed minimum benefits are intended to ensure that everyone has access to a basic level of care.

The CMS’s mission is laid out on its website:

Council regulates the medical schemes industry in a fair and transparent manner, and achieves this by:
• Protecting the public and informing them about their rights, obligations, and other matters in respect of medical schemes;
• Ensuring that complaints raised by members of the public are handled appropriately and speedily;
• Ensuring that all entities conducting the business of medical schemes, and other regulated entities, comply with the Medical Schemes Act;
• Ensuring the improved management and governance of medical schemes; and
• Advising the Minister of Health of appropriate regulatory and policy interventions that will assist in attaining national health policy objectives.

 - Fin24