Medical Schemes Moving Away from Capitated Emergency Risk

January 2 - Traditionally, South Africans taking out health and medical insurance are handed a card with the contact details of emergency services such as ambulances with which the medical scheme works. The idea is that should the policyholder suddenly require the services of an ambulance after an accident, for example, he or she should contact the emergency risk service providers that have a contract with the medical scheme.

Behind the scenes, most medical schemes work with what is known as capitated contracts with the emergency service providers. Essentially, this means that the medical scheme pays the service a fixed fee per policy per month, whether the emergency services are used or not.

However, more and more insurance companies are moving away from this type of contract, showing that capitation models are not working. Instead, they are opting for 'pay as you go' type emergency risk coverage.

One of the companies who chose to shift away from capitation contracting is Profmed, a medical scheme open to citizens that have at least a four year degree.

"Why would you use a capitation model, which outsources risk, when emergency risk could be more effectively managed on a pay-as-you-go basis?" asked Graham Anderson of Profmed.

Anderson explained how emergency risk works for Profmed policyholders. "In the event of an emergency, we require our members to contact International SOS, who will then evaluate the situation and respond in the most appropriate way. This could be by road, helicopter or fixed wing aeroplane. Where necessary, experienced emergency care practitioners, paramedics or doctors will stabilize the patient and then transfer to the nearest appropriate medical facility," he said.