Singapore Medical Association to rank IP insurers, set up complaints committee

THE Singapore Medical Association (SMA) is taking matters into its own hands as the selection criteria of insurers' panels of doctors come under fire for a lack of consistency and transparency in recent weeks.

In a report first circulated among members on Friday, SMA said that it will be introducing an initiative to rank Integrated Shield Plans (IPs) insurers on an annual basis as well as set up a complaints committee for patients and doctors to flag issues related to IPs and health insurance.

The main aim of these initiatives is to "collect more objective data" to get a better sense of existing issues surrounding IPs and health insurance, SMA's president Tan Yia Swam, told The Business Times.

The initiatives will also give patients and doctors greater access to information on insurers and encourage insurers to be more transparent, she said.

The ranking will be conducted via annual SMA member surveys. Results will be made public. Some parameters that will be used in the ranking exercise include:

a) Inclusiveness of panels

b) Transparency of doctor selection criteria for panels

c) Ease and timeliness of pre-authorisation process

d) Timeliness of payment

e) Appropriateness of fee scales with respect to the Ministry of Health's (MOH) fee benchmarks

f) Degree of friction and penalties imposed on policyholders when non-panel doctors are used

The complaints committee is for doctors and members of the public to submit information to when they feel IP providers have not been fair. This could include patients being denied insurance coverage or doctors not being adequately reimbursed for their services.

The rising cost of healthcare in recent years has led to underwriting losses for several insurers. Requirements to use panel doctors are among the measures the industry is implementing to address over-charging, over-servicing, and over-consumption of healthcare services.

The use of IP panels was recommended by the Health Insurance Task Force (HITF) in 2016 but has come into focus recently as policyholders transition to co-pay arrangements, which encourage seeking treatment from their insurers' accredited specialists or doctors.

SMA pointed out that such panels are highly exclusive with the fees of panel doctors clustered around the lower limit of the Ministry of Health's (MOH) fee benchmarks.

MOH fee benchmarks have been published for the most common 222 procedures since late 2018. Each benchmark for a procedure comes with a lower and an upper limit.

"Right now, I have to admit the insurers have not been that open about how exactly they select doctors," said Dr Tan, who is also a clinical director at Thomson Breast Centre and a Nominated Member of Parliament.

Currently, the most commonly cited criteria by insurers are a good track record and quality healthcare at "reasonable" cost.

"We are aware that they choose doctors based on a clean professional record without any prior SMC (Singapore Medical Council) complaints and must be of a certain professional quality," said Dr Tan

She added that SMA also understands that there are "fee arrangements" on some panels, where doctors agree to set lower fees in return for a higher volume of patients.

Given the lack of transparency on panel accreditation, SMA is calling for the inclusion and exclusion criteria for admitting doctors to be clearer.

"To-date, despite multiple engagements with the LIA (Life Insurance Association), not one IP insurer has done so," said SMA in its report.

Concerns were also raised that some specialities are under-represented on the panels.

SMA cited a study conducted by the Academy of Medicine Singapore in June last year, which revealed that each insurer's IP panel only had about 21 per cent of private specialists.

"I think panels shouldn't be a way to restrict patient choices, and patients should have the choice to choose the doctor that is best for their care," said Dr Tan.

SMA is also urging LIA to release data on IP insurers so that the public will be aware of the proportion of private sector specialists on each IP panel.

Checks by BT showed that NTUC Income and AIA have over 400 private specialists on their panels; Aviva and AXA have about 300 private specialists; Prudential has over 700 specialists across public and private sectors while Great Eastern has 450 across a mix of private and restructured hospital specialists.

While insurers BT spoke to earlier said the fees of their panel doctors are in line with MOH's fee benchmarks, SMA pointed out that only one insurer fully respects the entire span of the benchmarks.

The other IP insurers' fee scales are clustered around the lower limit, said SMA adding that insurers should not "cherry-pick around the lower limit".

"Since there are MOH fee benchmarks in place now to address overcharging, there is no reasonable justification for highly exclusive panels. Panels, if needed, should be inclusive in the first instance and private sector specialists should be excluded only if they have a poor track record," said SMA.

The association also highlights that the unsustainable nature of IPs, which led to recent changes to policy terms, is not likely to be due to excessive or higher claims by policyholders.

Data from the Singapore Actuarial Society (SAS) shows that the average payout per claim fell 1 per cent from 2016 to 2019, indicating that the size of payout has been stable during that period of time.

In addition, the compound annual growth rate of management expenses and commission stood at 16 per cent and 15 per cent respectively, compared with that of gross premiums and gross claims at 10 per cent and 11 per cent respectively.

As such, SMA suggested that IP insurers take the necessary steps to explore cutting their own management and commission costs to enhance the sustainability of the IPs. It also recommended that relevant authorities raise claims ratios of each IP insurer to 85 or 90 per cent from the current 75 per cent.

This is to "instil cost discipline" and ensure that "premiums collected are directed to healthcare costs and not frittered away on non-healthcare cost items", said SMA.

The SMA council also believes that the IP sector could be well served by being managed and operated by fewer payors or just one payor to prevent duplication of resources and costs.

"These savings can mitigate future increases in insurance premiums and reduce patients' financial burdens," noted SMA.

The association also pointed out that one of the key features of the current IP environment is that it is indirectly subsidised by the government when IP policyholders voluntarily downgrade to subsidised wards in restructured hospitals despite being entitled to higher ward classes.

"The consumption of these government subsidies are indirectly subsidising the insurers' IP businesses and depriving poorer patients of more subsidies, since MOH's budget is a finite thing," said Dr Tan in her parliamentary speech on March 5.

In addition with 70 per cent of Singaporeans on IPs, it calls into question whether the private sector, which has about a 30 per cent market share, is able to support the needs of IP policyholders.

"Healthcare is not like any other commercial business as patients are typically at a disadvantage, especially if they don't have the knowledge about the medical care they need and how much it should be priced at," Dr Tan told BT.

"That's why the professional body has a strong duty to ensure that doctors are practising good medicine and putting patients' interest first, by providing good medical care and ensuring charges are within reasonable range," she said.

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