29. Other Risk Management Techniques

Question 1

Risk Management Techniques Under PMI

Answer 1

These are methods that may be used by the insurer to manage claim costs. The inherent risk in these products is the uncertainty surrounding the cost of claims. There are three methods aimed at different parties:

Aimed at policyholder (CAPE M(O)M)
- co-payments, levies
- approved provider networks (APN)
- preventative medicine, wellness programmes
- exclusions/ limitations on benefits

• medical savings accounts (MSA)
• managed care

Aimed at healthcare provider (FIN(S)TA)
- fixed payment methods (indemnity/ fee-for-service, modified (negotiated) fee-for-service, per case, per diem (hospitals - i.e. per day in hospital), capitation, salary)
- if incentives to manage costs (e.g. bonus if within budget)
- negotiated fee discounts
- treatment protocols
- approved provider networks

Care-utilisation management (CUP)
- case management
- utilisation reviews
- pre-authorisation

Question 2

Reimbursement methods

(how healthcare service providers can be reimbursed for their services)

Answer 2

• indemnity fee-for-service
• modified (negotiated) fee-for-service
• capitation
• per diem (hospitals) *alt
• per case *alt
• salary