Docs should have no financial deals with third-party administrators

I agree that incentives for over-charging and/or overtreatment of patients may be prevalent if a doctor is tied to a contract with third-party administrators (TPA) (Fee splitting of medical bills is a conflict of interest, by Mr Edmund Khoo Kim Hock; July 4).

Generally, doctors are required to pay TPAs a fee for the patients who are referred to them. Historically these fees were a straight percentage of the bills, which means TPAs will obtain more if the bills are larger.

With the recent Singapore Medical Council directive banning such a practice, TPAs can charge only a fee that reflects the administrative work required to process the bill, regardless of the actual bill size.

With this ruling, doctors can now focus more on treating their patients without worrying about the fees to be paid to TPAs.

However, doctors still may not be totally independent in their medical practices, as they are still bound by their contracts with their TPAs, which may set some restrictions or limitations on the fees that doctors can charge.

Such restrictions are unnecessary, as they inhibit doctors from giving their patients the most appropriate medical treatment. There are also doctors who require patient referral from TPAs for their medical practices to be financially viable.

The ideal state of affairs would be one in which doctors have no financial interests with TPAs, other than treating patients that are referred to them.

This will eliminate the incentive for over-charging and/or overtreatment. TPAs can recover the revenue lost from the doctors by transferring some of the costs to the insurers and employers that they represent.

At the end of the day, patients will be assured that they will receive the most appropriate care by their doctors, while the insurers and employers will be more critical in their selection of TPAs and look for those that provide them with the most cost-effective solutions.

Ian Sim Mong Seng

A version of this article appeared in the print edition of The Straits Times on July 13, 2017, with the headline 'Docs should have no financial deals with third-party administrators'. Print Edition | Subscribe