Increase in panel doctors may mean higher premiums, says LIA

Panel doctors could be removed, but Integrated Shield Plan (IP) insurers would have to find other ways to reduce costs, such as raising premiums or co-payments or being stricter about having treatments pre-approved, said the Life Insurance Association (LIA) Singapore yesterday.

The topic of insurers having panel doctors is in the spotlight, as doctors and IP insurers fight over how the measure should be implemented.

In its second response to a position statement on IPs by the Singapore Medical Association (SMA) nearly a week ago, the LIA reiterated the link between an increased number of panel doctors and possibly higher premiums.

"If insurers recklessly increase panels, premiums will rise significantly, but if we increase the panel sizes in a careful manner, while paying the doctors reasonable fees, then the impact on premiums can be muted," said an LIA spokesman.

What is considered "reasonable fees" is a point of contention. The SMA has expressed unhappiness at the limited number of private specialists on IP panels and that they are mostly paid at the lower end of the fee benchmarks. It questions why specialists are excluded even if they adhere to the Ministry of Health (MOH) fee benchmarks.

The SMA said the growth in insurers' management and commission costs outstripped that of claims in recent years.

The LIA said this could be due to the implementation of Health Insurance Task Force recommendations that pushed up insurers' expenses in recent years but also moderated claims growth.

It said insurers' costs went up in the short term, but this may not reflect the long-term trend. "Insurers agree that we should control our own costs, but we don't really think there's a lot of fat in our expenses to be cut," said the LIA.

While it agreed that it was important to control non-claim expenses, it said claims are the main source of overall cost increases.

"If the average payout per claim doesn't change, but a larger proportion of the insured population is claiming, that would still be a problem for insurers."

IP insurers recorded rapid rises in claim costs from 2010 to 2015. The task force recommended in 2016 that patients pay a portion of their bills, and that panels of approved healthcare providers be set up and fee benchmarks set.

The LIA said having the MOH fee benchmarks is not enough to guide prices. It noted that on average, the upper end of fee benchmarks is 1.8 times higher than the lower end.

With panels, doctors sign enforceable contracts and charge within the agreed fee range, it said. "So long as a reasonable fee is left on the table for the doctor, and savings are passed on to policyholders in the form of lower premiums, this is a reasonable approach to take."

The SMA charged that many IP insurers have "highly exclusive" panels, which affects not only doctors who are excluded, but also policyholders.

Some may want to see a doctor recommended by a friend or stick with a familiar doctor who is not on the panel, without having to incur possibly large expenses.

A spokesman for the SMA said it is happy to note that the discussion has now been refocused on the financial sustainability of IPs. "Every party is expected to make sacrifices for a more sustainable system to emerge."

Associate Professor Jeremy Lim, director of the Leadership Institute for Global Health Transformation at the National University of Singapore's Saw Swee Hock School of Public Health, said insurers need to manage their own costs. "It's not fair to simply pass costs of insurers' inefficiency to policyholders.

"What is fair profit to insurers needs to be defined, if necessary by policymakers.