Within our mission of providing optimal healthcare arrangements for our clients,
we provide a comprehensive range of services which are customised for each client's
Our clients' requirements fall into one of the following four categories:
- Commercial Scheme Management
- In-house Scheme Management
- Management of healthcare services provided to employees
- Specialised healthcare management services
Please read through our range of services to see how we may best meet your requirements:
Our starting point in managing a client's healthcare risk is to develop, in association
with the client, terms of reference around the following principles:
This would require determining the levels of accessibility to healthcare according
to geographic distribution of members, demographics and the healthcare services
that are available.
Notwithstanding unlimited demand for healthcare services and employer assistance
one needs to determine what is realistically affordable for both employers and members.
The affordability issue also extends to issues such as post-retirement subsidies.
Healthcare cover is required for many decades into the future which requires that
strategies are implemented to ensure the stability of risk pools and to plan for
any future changes in the risk pool.
This is linked to affordability and generally affects employers whose subsidy policies
are for both active and pensioner members that incur substantial long-term liabilities.
The final terms of reference become the blue print against which all future healthcare
risk management initiatives are made.
Funding Model Design and Management
The key funding model areas where PROVIDENCE provides assistance are:
The subsidy policy is the most significant area for managing healthcare risk from
a financial perspective as it not only affects consumer behaviour but also can incur
significant and inequitable liabilities for an employer.
Accordingly we provide the following services in defining the subsidy policy:
- Make recommendations for an appropriate subsidy policy for members pre- and post-retirement
in accordance with the terms of reference.
- Provide annual actuarial valuations of the liabilities arising out of any post-retirement
- Provide a framework within which employers and members can renegotiate outdated
subsidy policies which are inequitable and unsustainable.
- Provide recommendations for achieving optimal tax efficiency in the structuring
of the subsidy policy.
- Provide legal input on the wording of contractual commitments to current and former
employees regarding subsidy policies.
- Develop an appropriate communication strategy to members regarding subsidy policies.
Post-Retirement Liability Management
Given the complexity of this subject it is handled separately under the subject
of pre-funding on the home page.
Services provided by PROVIDENCE in this area include annual actuarial valuations
of the liabilities arising out of any post-retirement subsidy obligations. PROVIDENCE
also makes recommendations for the optimal funding of such obligations from a vehicle
from a financial, legal and tax perspective.
These have an impact on many of the key terms of reference e.g. affordability, equity,
sustainability and undesirable cross-subsidies.
Against a background of the changing dynamics of a particular risk pool and the
costs of delivering healthcare, over the long term, to such a risk pool, PROVIDENCE
will design the structure and price of the contribution table for a risk pool to
best meet the various terms of reference.
This is an important element of most risk pools. The reinsurance required for each
risk pool needs to be structured according to the demographics of the risk pool,
its size, the benefits and the financial position of the fund. PROVIDENCE gathers
the appropriate data to assess these risks and makes recommendations for the structure
of the reinsurance and thereafter attends to the negotiation of reinsurance quotations
Disease (HIV/AIDS) Management
HIV/AIDS represents one of the biggest, if not the biggest, challenges to employers
in South Africa. All employers will have a need to quantify the impact that HIV/AIDS
will have on their organisation and to manage it.
Like many other aspects of healthcare a multi discipline approach is required in
both quantifying and managing the impact of this disease.
PROVIDENCE provides the following services in connection with HIV/AIDS:
The risk to employer groups manifests in their medical schemes and their businesses.
Medical scheme costs will escalate dramatically as the spread of the disease manifests.
In addition, employers will be affected in all areas of their business including
- loss of productivity,
- life and disability cover, and
- reduction in population in certain markets.
PROVIDENCE's actuarial and clinical team will gather appropriate data for the purpose
of profiling the impact that this disease will have on medical schemes as well as
in all aspects of an employer’s business.
Strategy Development and Management
With HIV/AIDS there is no standard protocol for its management. Each medical scheme
and/or employer requires a customised strategy for its unique circumstances. The
range of interventions can be diverse, including communication and education, condom
distribution, medication, vitamin supplements, treatment of STDs (to lower transmission
rates) amongst members and sex workers in the communities, improving diets etc.
The management of healthcare risk has many legal dimensions to it and in this regard
PROVIDENCE provides the following legal services:
The drafting of scheme rules and amendments thereto as required by legislation and/or
the board of trustees. The submitting of proposed amendments to the board of trustees
for approval before submission to the Registrar.
The preparation of and/or perusal of agreements with contracted third party contractors
for submission to the board of trustees together with recommendations. Providing
recommendations to employers regarding appropriate wording in connection with subsidy
Legislation & Statutory Compliance
Ensuring that schemes comply with all legal requirements of the Act or any other
legislation that may affect the scheme including, inter alia, governance, financial
and reporting requirements.
The provision of useful, user friendly, timely (real time) and accessible financial
data as well as sound investment strategies are key to the management of healthcare
risk. In this regard PROVIDENCE provides the following services:
The preparation of regular and complete financial statements for stakeholders. Alternatively,
ensuring that the administrator prepares financial statements which meet ‘Best Practice
Standards’. Making recommendations to the board of trustees with regard to the appropriate
management of the scheme's monies, including the allocation of monies between cash
required for the payment of claims and cash that can be held for the longer term,
and the appropriate investment of the scheme monies.
Ensuring that the scheme monies are invested according to the mandate of the board
Delivery Model Design and Management
This is possibly where PROVIDENCE's highest level of application and expertise lies.
Whether members are on a commercial or in-house scheme, PROVIDENCE can provide assistance
from the following range of services:
Benefit design to keep with members' requirements, market trends and new innovations.
Corrective measures to discourage the over utilisation of benefits.
Managed Care Protocols
Appropriate protocols for managed care initiatives including hospital pre-authorisation,
chronic medicine definitions and ex-gratia policies.
Delivery Model (FFS, HMO, etc) Design
Appropriate delivery models including fee-for-service, manage fee-for-service, staff
model Health Maintenance Organisations (HMOs), Preferred Provider Organisations
(PPOs), in-house clinics or a combination thereof.
Negotiations with providers or groups of providers for the provision of the various
disciplines required to deliver healthcare in terms of scheme rules and in respect
of discounts, payment procedures and delivery protocols.
Preventative Care Programmes
Preventative care including wellness programmes and health checks
Communication and Education
A well-informed and educated member has a better prospect of optimising the balance
of quality and cost-effectiveness in the delivery of healthcare. Communication and
education is therefore paramount and in this regard PROVIDENCE provides the following
Develop and implement an overall communication strategy for the Scheme, incorporating
all elements requiring communication to and education of the Members, the Management
Board, Human Resource management of the Employer, providers and contractors, including
- Explanation of benefits,
- Benefit changes,
- Contribution changes,
- Preferred provider arrangements,
- Administrative procedures,
- Use of Internet to communicate with the administrator,
- Advice on preventative care,
- Subsidy policies, including implications for retirement,
- Funding vehicles for post-retirement healthcare costs,
- Disease management,
- Emergency evacuation cover, and
- Overseas travel cover.
Prepare communication material including members' guides, regular newsletters, covering
letters, presentations etc.
Produce notices and/or any other form of communication for members and the employer
pertaining to contribution increases and benefit changes.
Educate the employer and/or trustees, where appropriate, on all aspects of medical
scheme management including, inter alia, governance, fiduciary responsibilities
and liabilities, compliance with the Act, financial management, interpretation of
statistics, risk management and delivery models.
Monitoring and Measurement
The management of healthcare risk revolves around the setting of benchmarks for
key indicators, setting up measurements against the benchmarks and implementing
corrective actions where appropriate. In this area PROVIDENCE provides the following
The regular gathering of financial and claims data for the purpose of monitoring
the financial and claiming patterns of the schemes and members with a view to making
observations thereon and recommendations for corrective actions.
Benchmarking and Measurements
Monitor and measure the service standards of third party contractors and to make
recommendations to the Management Board when appropriate.
Third Party Provider Management
Make recommendations to the board of trustees with regard to the provision of Appropriate
information, reports and statistics from third party contractors.
Preparation of Reports
Prepare annual budgets and projections. Make recommendations to the stakeholders
regarding the services provided on the fee charged, including annual escalations
of the various contracted third parties.