The PMB Review and NHI: healthcare funding unfolding

In the fourth and last article of a series aimed to empower patients on their rights in the funding of healthcare, Elsabé Klinck looks at the most recent proposed developments in healthcare funding, namely changes proposed to medical schemes, and the National Health Insurance (NHI).

Development in healthcare funding

We have, in the third article of this series, addressed managed care as practised within the medical scheme environment. We have also referred to the prescribed minimum benefits (PMBs) and designated service providers.

Now we are looking at proposals to change the PMBs, as well as other aspects in the medical schemes law, such as agreeing to only go to a designated service provider. We will also look at the health system changes envisaged. This proposed law aims to create a national, countrywide health insurance system, which will include both the public and private sectors.

It must be noted that what we discuss below are only proposals, and no changes to any of the laws or health funding systems are in place yet. It will still be many months, if not years, before such changes are brought into effect.

The review of the PMBs

A process to amend the current PMBs started at the Council for Medical Schemes two years ago. According to the law, the PMBs must be updated every two years. This is to ensure that it keeps pace with developments in technology and healthcare.

These updates have, unfortunately, not been done as the law requires. As a result, many of the descriptions and treatment, or diagnostic options available, are not always recorded as part of the PMBs in the list attached to the regulations.

For example, newer types of diabetes treatments are not included in the treatment descriptions for diabetes, and newer forms of blood glucose monitoring, such as continuous blood glucose monitoring systems, are also not considered for inclusion.

The PMB review process includes representatives from patient groups, as well as doctor and medical scheme groups.

What is significant is that the PMB review process will include consideration of primary healthcare, as well as an alignment with what is envisaged as benefits under the NHI.

The NHI benefit list does not specifically include all the conditions currently listed as part of the PMBs. Requiring, for example, all (or more) primary care chronic conditions to be funded, will necessitate some cuts in the level and types of diabetes benefits. So, to fund more conditions, fewer treatment options in diabetes care may be available.

Therefore, an expansion of what must be covered by medical schemes would necessitate trade-offs, should medical scheme budgets remain the same. More would have to be covered with the same amount of money.

The Medical Schemes Amendment Bill

The Health Market Inquiry, investigating price increases and competition in the private healthcare sector, have found (as recorded on page 456) in their draft report released in July:Ideally the trustees of schemes should be interceding on behalf of members to ensure that they receive value for money and that administrators are delivering the best possible value to scheme members. But, the governance of schemes is problematic,”

The Medical Schemes Amendment Bill now tightens the responsibilities that rest on the trustees and principal officers of medical schemes, to act in the best interests of the beneficiaries of the scheme.

Other changes are proposed in this draft law. One of these changes will support the creation of two registers, or lists. One for people who belong to medical schemes and one for healthcare providers.

  • The beneficiary register will help the Council for Medical Schemes determine what the health status and needs of patients are. This will assist with planning on the resources needed to render healthcare services.
  • The healthcare provider register will be a list of doctors, hospitals and other healthcare providers.

Both lists will be provided to the NHI Fund. It seems that the medical scheme amendments will assist in the transition into a national health insurance system.

Proposed changes

The Bill also proposes a new system of benefits to replace the current PMBs. These benefits will be “service benefits”. This is not described in the law, and it seems that schemes will no longer have to pay for certain diagnoses, such as diabetes, but rather for a certain number of doctor visits, specific medicines, specific tests, and so on.

The Amendment also creates a new type of medical scheme option or plan, called “efficiency discounted options”. If a person agrees to belong to such an option or plan, the person and all their beneficiaries agree to only use preferred or network providers. This means one would not be free to choose one’s provider. In return, however, there will be a reduction in medical scheme monthly contributions or premiums.

Other changes brought about by the proposed law relates to contributions or premiums. If the main member’s contribution is expressed as 100%, the main adult dependent(s) would pay 50% of that, adult children (up to the age of 30 years) 40% of that, and child dependents 20% of that.

The idea is to create an incentive for younger adults to stay on medical schemes, to address the fact that young people often do not belong to medical schemes. Having young, healthy people on medical schemes is important, for the cross-subsidising effect it has.

Many stakeholders have expressed concerns about many aspects of the Bill, such as the income that will be lost by the flat-structure premiums, etc. A key concern has been the proposed amendments to benefits as service benefits. What will happen to persons with diabetes who have certain benefits as part of the PMB rules, where such benefits are no longer prescribed in law? If more conditions must be funded, medicines and other treatment options will be limited, as the same budget would now have to stretch to cover more. This would mean that patients may no longer have all their diabetes treatments funded as in the past. 


The NHI Bill has been lauded as the solution to many problems facing the health sector. It proposes that the NHI structure to be set up, called the NHI Fund, become the only entity that will buy services and goods. Currently goods, such as medicines, are bought by the various provinces and other entities, such as the military and correctional services. It is hoped that by centralising the funding of healthcare, many of the current problems on financial ability to pay for medicines and to ensure sufficient supply could be addressed.

However, the South African Constitution currently makes provinces legally responsible for rendering healthcare, and compels the treasury to make sure that monies are allocated to provinces to fulfil this mandate.

Shift from current system

What the NHI Bill proposes is a fundamental shift from the current system. Under this system general tax money is provided to the provinces, and with that money they create, maintain and fund public hospitals and clinics with staff being paid, with medicines, and so forth, to render the healthcare services.

The NHI system will separate the service providers (i.e. the public hospitals, clinics and their staff) from the funding model. So, all public hospitals and clinics will be service providers contracted to the NHI Fund. They will then get paid according to the patient population they are generally looked after. They will therefore no longer get a general budget from the national treasury through their province. Medicines and medical devices will then also not be supplied from the province, but bought by the NHI Fund and provided directly to the hospital or clinic.

Another fundamental change is that, whereas provincial health allocations are done based on the extent of how rural the province is, as well as how large the population is, the new allocations will be on the disease- and incident (e.g. accident) profiles in the feeding area of that hospital.

So, a diabetic patient who suffers a hypoglycaemic event and goes to hospital, will be covered by that hospital based on calculations that was made on the estimated numbers of similar patients in that area who are likely to require hospitalisation due to hypoglycaemic events.


Clinics, who render primary healthcare, and where diabetes care will be based, will be funded on a capitation basis. That means, if that clinic renders services to a thousand patients, that clinic will receive a flat per patient per month fee to look after that patient, irrespective of how sick or well the patient is.

Private general practitioners, nursing practitioners and other primary care providers could, under the new proposals, join forces and collectively contract with the NHI authority on a district level to provide primary care. The idea is that servicing uncomplicated patients could be done by, for example, nursing professionals, whereas more complicated care could be rendered by a GP, etc.

Private sector

The NHI Bill also makes it clear that private sector hospitals and specialists could contract into the NHI, but is not clear on how they would be paid for rendering services to NHI patients. No private sector provider would be permitted to “opt out” of the NHI. To receive a certificate to practice, a person must be accredited by the NHI, and therefore render services to NHI patients.

Supply chain unknown

It is not known exactly how the supply chain will work, and how a diabetic patient will receive medicine under the NHI. If the patient goes to their primary care provider in their area, the cost of that visit will be covered by the capitation agreement between that provider and the NHI Fund. The patient will then get a prescription for, for example, an insulin. The patient will then get that specific insulin from the pharmacy in their area if that insulin is part of the NHI Fund’s benefits. This raises the question that if the patient’s specific insulin is not available from the NHI Fund – can that patient obtain their insulin from their medical scheme, or pay out of pocket?

As the Medical Schemes Amendment Bill proposes that medical schemes do not provide duplicative cover, it is not clear whether it would be possible for a patient to get their consultation for a specific condition from the NHI, but their medicine from a medical scheme.


There are still many uncertainties as to how, practically, the proposed changes to the PMBs, the Medical Schemes Amendment Bill and the NHI Bill will affect the delivery of diabetes care.

It is, however, important that patients living with diabetes are involved in the discussions around these changes. They need to make their voices heard as to how various proposals would, practically, affect their right of access to healthcare, and the availability of services, medicines and medical devices, which are required to ensure optimum health outcomes.


Elsabė Klinck (B.Iuris, LLB, BA Hons (German), BA Applied Psychology) specialises in health law, -policy and -ethics. She owns a successful healthcare consulting firm, serving various clients in the pharmaceutical, medical device, healthcare professional and health facility markets.

Managed care: tools to manage the cost of healthcare services

In this third article in the series aimed to empower patients on their rights in the funding of healthcare, Elsabé Klinck discusses managed care.

Managed care

We have, in the second article in this series, referred to the prescribed minimum benefits (PMBs) and how medical schemes can manage the cost thereof by entering in to contracts with designated service providers (DSPs). 

They can also manage cost by implementing “managed care” strategies. These include, for example, having medicines lists, requiring pre-authorisation before certain procedures can be undertaken or before one can be admitted into hospital, or setting certain financial caps up to which the scheme will pay.

It must be noted that “managed care” applies to both PMBs, and non-PMBs.

Medicines list and treatment protocols

Medicines lists, or formularies, are ways by which medical schemes state that they will only pay for certain medicines, and not for others. Treatment protocols are step-by-step “recipes” that states how the doctor should manage a certain condition. 

One would assume, because managed care is about managing cost, that the law would say these must be set on price. However, healthcare is more complex than just what is cheap or expensive. It is about:

(a) What is, in healthcare terms, appropriate for a patient; and

(b) To cater for cases where not all patients are equally well, or well at all, on the same medicine.

In terms of what is appropriate for a patient, the medical scheme must set its medicine lists and treatment protocols based on evidence-based medicine (EBm). 

What is EBM?

EBM is defined in the law as considering, in an honest and ethical way, what’s the current best ways of treating patients with a certain condition. It then also considers the individual circumstances of the patient and the doctor’s experience in managing such diseases. Then one must also consider what research says, i.e. clinical research on patients, treatments and various products. This includes considerations that may come to light during a clinical trial, e.g. that patients with certain other conditions cannot take a specific medicine, or that in some groups, the medicine has a bad reaction. 

Scenario cases in the interest of the patient’s health

So, to cater for the patients who are not well on the medicines on the list, the law, in Regulations 15H(1)(c) of the General Medical Schemes Regulations, states that the scheme must deviate from their medicine list, in the interest of the patient’s health, under the following situations:

  • Where the medication that the scheme is willing to pay for, did not work for the patient (this is called “treatment failure”). In diabetes, this can be proven by showing that the medicine is not bringing one’s blood glucose levels within the right range. 
  • Where the scheme-recommended treatment causes, or would cause an adverse reaction. This means that the patient has experienced a side effect on the medicine on the list, or that we know, often from research and experience, that certain patients will experience a side effect. 

If the above cases are proven, the scheme must, by law, fund an appropriate alternative medicine, even if that medicine is not on their list, without a co-payment.

The same principles that apply to medicines lists or formularies, also apply to treatment protocols (regulation 15H(1)(c)). Where the patient is not well on the treatment as set out step-by-step, the scheme must pay for a deviation from the protocol. This is also in cases where the step-by-step approach is not working for the patient and his/her condition is not getting better (i.e. “treatment failure”) or where following those steps would cause, or have already caused, the patient to suffer harm.

Other important aspects of managed care to remember

One sometimes hears that a scheme says: “We are only making a funding decision, it is not a decision about your care.” This is not true where the medical scheme, or the entity that administers the scheme, is a registered managed care organisation. 

Managed care, in the law, is defined to include both the financial, and the clinical (i.e. healthcare) management of a scheme beneficiary. When they make a funding decision they must consider not only the financial impact of that decision, but also the impact on your health.

Get your healthcare providers support

Also, where the scheme has, as part of its managed care, appointed “network” doctors or hospitals, who agree to adhere to certain principles and protocols, the law set criteria aimed at protecting patients. It says that even in these cases the scheme is responsible towards its beneficiaries. The scheme or the contract may never prevent the doctor or other healthcare provider from telling the patient what care they need, and what would be best for them. Even if the managed care agreement requires adherence to a formulary or protocol. 

The scheme may also not terminate the agreement because of the provider saying they disagree with a scheme decision or when the provider assists the patient to lodge a complaint or an appeal. Patients should therefore not hesitate to:

  • Ask their doctors and healthcare providers as to whether the care is appropriate, or the best care for them; and
  • Ask for their doctors or providers’ supporting in taking up cases with the scheme and even the Council of Medical Schemes (CMS).

No kick-backs for healthcare providers

When appointing or selecting providers, medical schemes may not unfairly discriminate against any provider, and must base such selection on a clearly defined and reasonable policy which furthers the objectives of affordability, cost-effectiveness, quality of care and member access to health services.

Regulation 15J prohibits practices where the provider is rewarded for recommending inappropriate care. For example, paying a pharmacist a higher dispensing fee for switching the patient from one medicine to another where the second medicine then is not appropriate, or paying a doctor a higher fee for refraining from using care that would be medically appropriate (e.g. starting a certain type of treatment or referring the patient to a specialist) would be prohibited under this regulation.


The managed care regulations also provide for “capitation”. It literally means “per head”. So, the scheme would pay an average amount per head, for all diabetic patients, irrespective of what that patient actually costs. 

So, if a patient has complex diabetes, the amount may be too little, but if the patient is easy to treat, the amount may be more than what is required to treat the patient. However, the decisions on how to treat the range of diabetic patients, then is up to the doctor, who then undertakes the assessment as to what would be possible for each patient. 

However, if this is done, regulation 15F sets the following criteria for these capitated contracts namely:

  • It must be in the interests of the members of the medical scheme;
  • There must be a “genuine transfer of risk” from the scheme to providers, which means they must truly empower the provider to make the decisions on appropriateness per patient and to take the risk of more complicated patients; and
  • The capitated payment must be “reasonably commensurate with the extent of the risk transfer”, which means it must be certain that, overall, the doctor is able to appropriately treat all patients, even if s/he has more complicated patients than someone else to manage.


Managed care is an important aspect in medical schemes, and many patients are not aware that there are rules that frame how schemes must set, and enforce, their medicines list, or preferred doctors. 

These rules are important and protect patients who are not doing well on scheme-medicines, who require different care, or who are more complicated patients.


Elsabė Klinck (B.Iuris, LLB, BA Hons (German), BA Applied Psychology) specialises in health law, -policy and -ethics. She owns a successful healthcare consulting firm, serving various clients in the pharmaceutical, medical device, healthcare professional and health facility markets.

Medical schemes, healthcare cover and patients

Elsabė Klinck aims to empower patients on their rights in the funding of healthcare with a series of articles. This first article covers the basics of medical schemes, healthcare cover and patients.

A complex environment

Funding for healthcare is a controversial issue. It can lead to friction between healthcare funding companies (medical schemes or healthcare insurers), providers (doctors, hospitals) and patients.

Because no person chooses to be ill, the buying of healthcare services is rarely done on a purely voluntary basis. It is mostly begrudgingly. Add to this the aspect that some healthcare interventions are life-saving, the moral arguments on equal access to healthcare and a conflict-free discussion appears virtually out of the question.

With the Minister of Health’s recent announcements on changes to the healthcare system and to medical schemes, debates on co-payments have also been added to the above complexity.

The Health Market Inquiry has also found that patients find medical scheme options, benefits and the limitations thereto, daunting. Fighting for cover is also a difficult undertaking. Many patients simply give up, even if they feel they should have better cover.

The law as a patient’s guide

The legal frameworks do, however, protect patients, and the fund from which healthcare is paid. Understanding these frameworks will help patients, providers and funders to better communicate. They can then use the same reference points when discussing access to, or denial, of care.

Funding for healthcare services (doctors’ fees, hospitalisation, etc.) and goods (medicines, etc.) can be provided by:
  • Persons out of their own pocket (often these patients are called private patients);
  • Their medical scheme, subject to the provisions of the medical schemes law and the scheme rules;
  • Third party insurers, which sometimes provide lump sum cover for “dread disease” and/or “hospitalisation” or “gap cover”. These pay the difference between what another funder pays and what is owed.

Where third party funders (i.e. medical schemes or health insurers) pay healthcare services in part, co-payments may have to be paid by patients, to ensure that the full event, medicine or care is covered. In some cases, schemes call this levy a “penalty co-payments”. We will look at co-payments in the next articles of this series.

Knowing about the care you require

Whether funders would fund care or not, your healthcare journey must start with your healthcare professional (doctor, pharmacist, nursing professional, etc.) discussing your healthcare status with you. This includes how you feel, what they observe, and what the test results or physical examinations show them about your health.

Based on your healthcare status, your healthcare professional will discuss with you what your treatment options are, and what the benefits, risks and costs of each option will be. Regarding this, you must consider the arrangement of your funder.  Remember your funder makes rules for the general patient population under their cover. So, what they may fund, may not be what is appropriate for you.

Discuss the alternatives that your scheme will fund with your healthcare professional. Ask them to explain why you may require something your funder may not fund in full, or may not fund at all.

The same applies when you present a prescription at a pharmacy. Pharmacists must substitute products with generic alternatives. Ask the pharmacist if the product is substituted with another product. If you are uncertain, call your prescribing healthcare professional.

PMB conditions

For prescribed minimum benefit (PMB) conditions (we will address PMB in detail later), you are entitled to decline a product that would have been appropriate for you, in favour of something you choose voluntarily. But then there may be a co-payment levied. Some patients prefer to stick to treatment they know, or products they choose. Because of this choice, they will then only be reimbursed by the funder up to the price of the funder’s preferred product.

Right to decline care

You always have the right to decline care. For example, some patients do not want to co-pay, or they agree to swop treatment to what the funder is willing to reimburse. If a patient does this, she/he must understand what the implications (health and cost) of the refusal of care their healthcare professional advised is.

Ask your healthcare professional to explain why they would prefer or recommend a treatment that your funder does not pay for at all, or only pays for in part.

The medical schemes law states that a healthcare professional may never be incentivised to provide you with care that is inappropriate for you. It is therefore unlawful. For example, if your healthcare professional prescribes or dispenses a product because if they do so, they will get paid better by the funder, and such change is not in your interest.

Consumer legislation also prohibits any consumer (patient in this case) from being pressurised into accepting any service or goods. Therefore, take time when deciding on the right care for you, and consider the funding implications of the care you choose.

Paying for care

Medical schemes should, by law, pay for all conditions that are listed in the law as PMB conditions. There are 271 conditions listed in the law, and 25 chronic conditions.

Diabetes, its diagnoses, monitoring (e.g. through glucometers), and all treatment of (for example, diabetes-associated events, such as diabetic ‘highs’ or ‘lows’ where one lands in hospital) are included in the PMB.

The law says that this treatment must be funded “in full and without co-payment” (regulation 8, Medical Schemes Act). This, in short, means that the scheme must pay for all the care associated with living with diabetes.

Where a medical scheme limits the various aspects of healthcare, such as where you receive in-hospital care, or the medicine it would pay for, these limitations should take place within what the law allows. (We will go into the details of these circumstances on managed care, PMB, designated providers (DSP), etc. in future articles.)

 Medical scheme options or plans

Irrespective of your medical scheme plan or option, you are always entitled to appropriate care. Some scheme options do, however, limit the number of visits to healthcare professionals, limit your choice of hospital, or restrict the list of medicines from which your doctor may prescribe.

Normally, if you want more choices, you would have to belong to a higher option with a higher monthly contribution.

One should keep in mind that even if one is on a lower option, there may be circumstances where the law requires the full funding of care, not generally included in that option. For instance, circumstances that are outside of the control of the patient, such as a negative reaction to a medicine, or an emergency.

Where to seek help

Most medical schemes do have internal complaints and appeals systems. If you, as the patient and scheme beneficiary, do not come right at the scheme, you are entitled to lodge a complaint at the Council for Medical Schemes (CMS) – [email protected].

You should receive a case number within 48 hours. You will use that case number when communicating with the CMS. It’s important to include all information and dates, as well as any reports from your doctor, test results, how you were feeling or what you experienced, etc.

Do not forget to add that you have a PMB condition if that is the case. Also explain any instances where treatment was not successful, or where you had to switch treatments, and why that was the case.

Attach any reports or evidence of negative reactions or implications you have experienced to the complaint. Number all the attachments to your complaint and refer to each attachment by that number in your complaint letter.

If a ruling on a complaint is not in your favour, you can appeal that ruling. The details of this right, and the correct email address is always provided on the letter containing the ruling on your complaint.

Final thought

Patients should be aware of their entitlements in terms of the law. These entitlements override the medical scheme rules, if there is a conflict between the rules and the law.

The process starts with informed consent at your healthcare professional where your condition and the treatment options must be discussed.

You must consider the financial implications of your chosen care, or of the care that is necessary for you. Plan for your interaction with your funder, if you know they may not pay in full, or may not pay at all.

Ask your doctor for assistance to understand why you need a particular treatment, or why it may be good for you to choose a particular treatment freely.


Elsabė Klinck (B.Iuris, LLB, BA Hons (German), BA Applied Psychology) specialises in health law, -policy and -ethics. She owns a successful healthcare consulting firm, serving various clients in the pharmaceutical, medical device, healthcare professional and health facility markets.

Wearables transform the healthcare industry

Wearable technology is more than just a fancy accessory strapped to your wrist. Nowadays, wearables play a fundamental role in transforming the healthcare industry and provides a clearer picture of an individual’s health status.


Cardiogram, an app that allows you to track your heart rate, designed by a mobile tech company with the aim of reinventing preventive medicine, recently announced their learning network, DeepHeart, is not only able to detect hypertension, sleep apnoea, and atrial fibrillation by using data gathered from 14,011 Apple Watch users, but it was also able to detect that 462 of them had diabetes – resulting in 85% accuracy in its diagnosis.

How does it do this?

Cardiogram and the University of California, San Francisco used 14,011 subjects and some 200 million heart rate sensor measurements to train DeepHeart and test the accuracy of the neural network’s ability to distinguish between people with and without diabetes.

DeepHeart can monitor the pattern of beat to beat heart rate variability to detect changes that are associated with diabetes, such as elevated resting heart rates or slower heart rate recovery after exercising.

2018 will see Cardiogram launch new features to incorporate DeepHeart directly within the app. This is just one example of how the merging of two worlds is changing the foundation of an industry.

Apple has the advantage

However, for the potential of wearable devices to be fully realised, it’s critical that the data collected is integrated across all devices, and that there is governance over its storage. It’s vital that all data is secure and presented in a format that is easy for the user to understand.

This is where Apple has the advantage. Apple has gone to extreme lengths to create an infrastructure that ensures the privacy and protection of data. Therefore, not only is health data extremely secure, but Apple’s ‘Health Kit’ is built into the operating system; a programming framework accessible via iOS to all application developers. This central framework plugs into iOS wearables, offering users an activity tracker, health vitals, results and records all in one accessible, user-friendly hub that overcomes previous language barriers through its multi-linguistic functionality.

Then, once the user has personally authorised their information to be available, they are able to share this data with healthcare providers, meaning that these providers receive a consistent and comprehensive medical history and lifestyle overview, which would result in a better-informed treatment plan.

Apple’s ‘Medical ID’, available on all iOS devices, such as iPhones and Apple Watches, takes this a step further. All pertinent health information, such as pre-existing conditions, blood type, emergency contact numbers etc. can be pre-loaded and accessed even on a locked phone, in an emergency.

In an accident scenario, having immediate access to this information leads to a quicker response and more appropriate treatment, which can be the difference between life and death.


Vernon Foxcroft is the Business Development Manager at Digicape.