Singapore:Life insurance body says panels of preferred doctors will continue to expand

The Life Insurance Association, Singapore (LIA) has said that insurers have been expanding their panels of doctors and will continue to do so. A comprehensive panel is to the benefit of policyholders and insurers alike, it adds.

LIA makes these comments in response to a position statement issued on 25 March 2021 by the Singapore Medical Association (SMA) on integrated shield plans (IPs). Such plans are optional private health insurance policies that provide medical coverage on top of what is offered by the government-run basic health insurance scheme, MediShield Life.

The SMA alleges that panels are highly exclusive panels where many IP insurers only have about 21% of private specialists on each panel; the selection criteria for doctors to be empanelled is opaque and most IP insurers do not respect both the higher and lower limits of fee benchmarks with their fee scales clustered around the lower limit only.

Size of panels

The LIA says that current IP panels range from 250-400 private specialists (noting that this range excludes the public sector doctors which some insurers also list on their websites). This is comparable to the typical size of an employee benefits private specialist panel. They should grow beyond this size over time.

Significant effort and cost on the part of insurers is needed to vet and monitor panel doctors, inadvertently imposing limits on the rate of panel expansion and the ultimate size that a panel can be. Insurers remain open to engaging stakeholders on the ideal size of a private specialist panel.

The LIA adds that it is in the interest of insurers to ensure that panels are comprehensive, to avoid policyholders having to consult non-panel doctors which likely incur higher costs.

Providing best value for policyholders

As applied to cost containment, the underlying concept of a panel is to use the insurer’s bargaining power to negotiate preferential rates from healthcare providers in exchange for higher volumes. This practice is no different from the use of group procurement in industries outside healthcare. So long as a reasonable fee is left on the table for the doctor, and savings are passed on to policyholders in the form of lower premiums, this is a reasonable approach to take. Insurers are playing the role they should be in stretching the healthcare dollar for policyholders.

Panels complement the MOH fee benchmarks

The LIA says that the use of panels in this way is complementary to the Ministry of Health (MOH) Fee Benchmarks because they address two issues that the benchmarks themselves are not able to.

First, the fee benchmarks do not include an enforcement mechanism. The benchmarks provide guidance as to what are considered acceptable charges. However, doctors are not required to abide by them and can charge above the upper bound should they feel the need to do so. This issue of enforcement can be addressed through the appointment of panels, within which doctors sign on to enforceable contracts, and are therefore legally bound to charge within the agreed fee range.

Second, where to charge within the range of the fee benchmark can be unclear. The average difference between upper and lower bound is 1.8 times (though only approximately 2% of procedures have the upper bound at 4.2-6.3 times the lower bound). Many procedures do not have descriptors for when a doctor should charge toward the upper end and when a doctor should charge toward the lower end. This means that doctors have considerable discretion to decide where to charge within the range of the fee benchmarks.

Through panels, insurers can help address this by setting a default fee below the upper bound, as well as allowing charges above the default for cases which are more complex than the norm.

Fairness

So long as insurers are fair in allowing deviations, this should be a reasonable way to conduct panels, says the LIA. Claims data indicates that insurers are fair in practice. Panel claims from IP insurers have surgeon fees which span the full range of the MOH’s fee benchmarks, and even have claims which are above the upper bound of the fee benchmark range. This indicates that insurers do give due allowance for cases that are more complex than the norm.

The LIA has been informed that all insurers have set their panel fees within the MOH Fee Benchmark ranges for the 218 procedures where these are available. Given that the upper bound is, on average, 1.8 times of the lower bound, setting panel fees at the upper bound of the MOH Fee Benchmarks will likely lead to escalation in claims costs and, as a consequence, premiums.

Transparency in selection criteria of panel doctors

As part of its constant review and update of guidelines, the LIA has recently issued guidance to insurers that they should publish the general criteria for selection of panel doctors as a best practice. Insurers would typically review the prospective panel doctor’s past claims to see if the historical charges have been reasonable, whether there are any red flags in terms of volume of suspicious claims, and available markers of quality (e.g. re-admission rate).

The process may also include looking into doctors’ overall reputation, doctors’ training records and credentials, as well as checks on whether there are any disciplinary issues with the Singapore Medical Council. Insurers will work with stakeholders to better communicate their criteria to doctors.

Source: Asia Insurance Review