Pula Medical Aid Fund has instituted some measures to contain escalating claims costs. In the past three years, the fund has been experiencing a deficit caused by high claims costs in comparison to revenue generated from membership contributions.
The deficit for the year ended June 30 2008 was just over P 6 million. The extended deficit trail is partly the result of escalating claims costs. However, the deficit has been gradually improving in the last three years largely due to a gradual reduction in the claims costs over the same period.
For the year ended June 2008, Pula recorded a contribution income of over P82 million which reflects a significant growth of 16.9% from the P61.5 million recorded in 2006/2007. The significant growth in contribution income was largely due to the premium increases effected in July 2007 and the growth in the fund’s membership.
However, claims costs increased by 11.1 % from P60.7 million in 2006/2007 to P77.4 million in 2007/2008.The 11.1% increase in claims costs is relatively lower than the increase recorded in the previous two years. Over the past three years, income generated from contributions has not been able to cover claims costs and other expenses, compelling the fund to draw from reserves to finance the deficit. However, the fund continues to maintain a healthy solvency margin at 79.2%.
When making a presentation to customers in Francistown recently Operations Manager Rose Tatedi said that management found it fitting to institute some cost control measures, most of them aimed at curbing escalating claims costs, to address the three-year deficit.
One of the major initiatives introduced is the doctor-patient registration and referral system which was introduced in July 1. Tatedi highlighted that the gradual reduction in the claims cost is testimony to the fact that the cost control measures are bearing fruit.
The doctor-patient registration and referral system is intended to cut claims costs and improve patient care and management. Tatedi said that they have been encouraging their patients to identify a primary doctor who will attend to all their medical needs. Such a doctor will also refer them to a specialist if needs arises.
She, however, lamented the fact that the response to the doctor-patient registration system has been lackluster as only a third of the fund’s membership registered their preferred doctors within the stipulated time. She however maintains that the system will go on and encouraged clients to register their preferred doctors.
For his part, AFA Managing Director, Kabelo Ebineng, said that the doctor-patient registration and referral system is the right avenue to cost cutting. He revealed that in the past they have observed increasing instances of cost duplication, where patients hop from one doctor to another, repeatedly making the same claims for the same treatment.
Some of the customers felt that the doctor patient registration and referral system is restricting. But Ebineng maintained that it is a cost cutting measure which if unsuccessful will finally result in Pula being forced to hike tariffs to meet escalating claims costs.
When contributing to the discussions Tati River Clinic’s Dr. Mompati lauded the doctor patient registration and referral as a noble idea that will eventually benefit patients as it promotes professionalism. He said that patients will gain more if they are attended to by one doctor who knows their medical history and is there fore better able to manage their ailments.
The construction of Bokamoso Private Hospital, a joint venture between Pula and Botswana Public Officers Medical Aid Fund, is also expected to reduce claims costs especially in relation to clients who seek medical assistance outside Botswana. Pula is generally disadvantaged when dealing with external medical facilities because it does not have leeway to negotiate prices and rates. Due to open in November the P596million, 300-bed specialist facility will offer services that are not available locally. Such services include kidney dialysis and cardiovascular operations. It will also offer care for trauma and orthopedic patients.
Going forward Pula maintains that they will continue to promote their cost cutting initiatives and even look for more avenues through which they can cut costs. However, it is also equally imperative that management puts in place avenues through which they can increase their reserves. The fund’s corporate strategy, which was developed in 2008/09, will enable Pula to increase its solvency margin, reduce claims costs and further increase reserves.