Medical insurer sees future in state-private sector collaboration
The government needs to collaborate with private medical insurance providers because the current state health system is simply not sustainable, GasanMamo director Julian Mamo said.GasanMamo recently introduced private medical insurance under the Sana...
The government needs to collaborate with private medical insurance providers because the current state health system is simply not sustainable, GasanMamo director Julian Mamo said.
GasanMamo recently introduced private medical insurance under the Sana brand. With Mater Dei Hospital promising to raise standards, closing the gap between state and private medicine, will fewer people opt for private care?
"I don't think so. The issue of the national health service is not only about quality but about sustainability. The expectation that everything should be provided as a right has to change - and in the not too distant future.
"Of course, part of health reform will raise standards and the bar will definitely be higher at Mater Dei. But there are also horrendous stories about what it will cost. It is in the government's interest to bring private medical insurers on board as part of the reform," he said.
What is GasanMamo suggesting, fiscal incentives for private medical insurance, similar to the rebates offered for those who send their children to private schools?
"This could be one measure but we are more inclined to a collaborative approach. Perhaps the best way to explain it would be to compare it to the pension system with a basic service offered under the first and second pillars but then another pillar gives the option of topping up. People may be willing to pay more to get a better service.
"Collaboration is not new in medicine here. There are already numerous examples of state patients being treated privately (when there is excess demand in the state system and spare capacity in the private one). It is important to have a private system that complements a good state one."
With medical insurance companies complaining that escalating health care costs are digging deeply into their profits, is this the right time to join the fray? Mr Mamo thinks there are two ways of looking at this. "It is even more important to have insurance when costs are rising.
From an insurer's point of view, we are very aware that this is a difficult period for private medical insurance but we have been players in the insurance field for a long time and feel that this would complete our bouquet of products," Mr Mamo said.
"Our existing clients have requested it as they like to have all their insurance needs handled by one company."
The other aspect of going into this line is that it increases competition, which Mr Mamo sees as being "healthy".
"It does not worry us that we will have to compete with the existing, established players," he said. Sana will be offered by GasanMamo directly, rather than as an agent for an international company - in contrast to its two main competitors, PPP and Bupa. This means that it cannot benefit from the economies of scale of an international player.
"Without doubt, the risk in Malta is spread across a small population so it is hard to build a critical mass. However, the number of private hospitals and clinics is growing and therefore the market for private medical insurance is also growing," he said. At this stage, Sana is only targeting the local market, which Mr Mamo feels is still relatively underinsured.
"I believe that a lot more people are becoming aware of the need for private medical insurance - even though it is not compulsory as is, for example, car insurance. Another reason why we are only looking at the domestic market is that the range of products has been designed very much with the Maltese family and Maltese scenario in mind."
He is well aware of the problems that insurance providers face when dealing with claims, and believes that the key is good communication.
"It is very important for people to have balanced expectations. It is impossible for everything to be covered by insurance. Good communication would solve the problem of clients who feel hard done by. This is where reputations get tarnished...
"Our staff will take pains to explain exactly what is included in the policy. We are very proud of our customer satisfaction levels. A recent survey shows that 94 per cent of our claimants are satisfied or very satisfied. We expect to live up to the same standard with Sana."
Explaining expectations is one way to ensure a frustration-free claim; another is to ensure that procedures are followed.
"We are aware of the peculiarities of this sector but we intend to collaborate with the providers as we feel that this is the way forward. It is very important to cut abuse as this has a negative impact on the entire pool of insured persons. We know that clients think that procedures are quite bureaucratic but this is the only way to curb abuse. This is why we ask clients to get clearance before a procedure is carried out and why we would prefer it if patient records were kept as this would create an audit trail. We also believe that a family doctor should be the first port of call. It is not necessarily the right approach to go straight to a specialist; patients should be referred by a family doctor.
"There is often a lot of emphasis put on insurance but really this is incidental. The real emphasis should be placed on the patient and the doctor; the doctor should give advice in the interest of the patient and this should not be skewed by insurance! The doctor should not tailor the prognosis depending on insurance. Patients either need a procedure or they don't."
One other quibble is often the fact that preventive medicine - say mammograms - are not covered. Mr Mamo explained that preventive medicine is covered by a different class of insurance, known as healthcare insurance, which is not available in Malta.
"The problem is that the cost of preventive medicine is predictable and regular; once a woman reaches the age when mammograms are advisable then she would have one at regular intervals - whereas the cost of private medicine treatment is based on a risk assessment. If the insurer knows in advance what he is going to have to pay out, this is reflected in the premium which is usually far in excess of what people are willing to pay," he explained.
What about the cost of local private care provision? Will Sana reach agreements with providers?
"We have started talking to them about logistics and administrative procedures so far. There is no doubt that the cost of care is high and we will work hard to keep it under control as if the costs go up then the premia have to go up. Medical insurance is not like other categories as people do not like to quibble about the cost when their health is at stake, even when the impact is cushioned by insurance," he said.
GasanMamo recently introduced private medical insurance under the Sana brand. With Mater Dei Hospital promising to raise standards, closing the gap between state and private medicine, will fewer people opt for private care?
"I don't think so. The issue of the national health service is not only about quality but about sustainability. The expectation that everything should be provided as a right has to change - and in the not too distant future.
"Of course, part of health reform will raise standards and the bar will definitely be higher at Mater Dei. But there are also horrendous stories about what it will cost. It is in the government's interest to bring private medical insurers on board as part of the reform," he said.
What is GasanMamo suggesting, fiscal incentives for private medical insurance, similar to the rebates offered for those who send their children to private schools?
"This could be one measure but we are more inclined to a collaborative approach. Perhaps the best way to explain it would be to compare it to the pension system with a basic service offered under the first and second pillars but then another pillar gives the option of topping up. People may be willing to pay more to get a better service.
"Collaboration is not new in medicine here. There are already numerous examples of state patients being treated privately (when there is excess demand in the state system and spare capacity in the private one). It is important to have a private system that complements a good state one."
With medical insurance companies complaining that escalating health care costs are digging deeply into their profits, is this the right time to join the fray? Mr Mamo thinks there are two ways of looking at this. "It is even more important to have insurance when costs are rising.
From an insurer's point of view, we are very aware that this is a difficult period for private medical insurance but we have been players in the insurance field for a long time and feel that this would complete our bouquet of products," Mr Mamo said.
"Our existing clients have requested it as they like to have all their insurance needs handled by one company."
The other aspect of going into this line is that it increases competition, which Mr Mamo sees as being "healthy".
"It does not worry us that we will have to compete with the existing, established players," he said. Sana will be offered by GasanMamo directly, rather than as an agent for an international company - in contrast to its two main competitors, PPP and Bupa. This means that it cannot benefit from the economies of scale of an international player.
"Without doubt, the risk in Malta is spread across a small population so it is hard to build a critical mass. However, the number of private hospitals and clinics is growing and therefore the market for private medical insurance is also growing," he said. At this stage, Sana is only targeting the local market, which Mr Mamo feels is still relatively underinsured.
"I believe that a lot more people are becoming aware of the need for private medical insurance - even though it is not compulsory as is, for example, car insurance. Another reason why we are only looking at the domestic market is that the range of products has been designed very much with the Maltese family and Maltese scenario in mind."
He is well aware of the problems that insurance providers face when dealing with claims, and believes that the key is good communication.
"It is very important for people to have balanced expectations. It is impossible for everything to be covered by insurance. Good communication would solve the problem of clients who feel hard done by. This is where reputations get tarnished...
"Our staff will take pains to explain exactly what is included in the policy. We are very proud of our customer satisfaction levels. A recent survey shows that 94 per cent of our claimants are satisfied or very satisfied. We expect to live up to the same standard with Sana."
Explaining expectations is one way to ensure a frustration-free claim; another is to ensure that procedures are followed.
"We are aware of the peculiarities of this sector but we intend to collaborate with the providers as we feel that this is the way forward. It is very important to cut abuse as this has a negative impact on the entire pool of insured persons. We know that clients think that procedures are quite bureaucratic but this is the only way to curb abuse. This is why we ask clients to get clearance before a procedure is carried out and why we would prefer it if patient records were kept as this would create an audit trail. We also believe that a family doctor should be the first port of call. It is not necessarily the right approach to go straight to a specialist; patients should be referred by a family doctor.
"There is often a lot of emphasis put on insurance but really this is incidental. The real emphasis should be placed on the patient and the doctor; the doctor should give advice in the interest of the patient and this should not be skewed by insurance! The doctor should not tailor the prognosis depending on insurance. Patients either need a procedure or they don't."
One other quibble is often the fact that preventive medicine - say mammograms - are not covered. Mr Mamo explained that preventive medicine is covered by a different class of insurance, known as healthcare insurance, which is not available in Malta.
"The problem is that the cost of preventive medicine is predictable and regular; once a woman reaches the age when mammograms are advisable then she would have one at regular intervals - whereas the cost of private medicine treatment is based on a risk assessment. If the insurer knows in advance what he is going to have to pay out, this is reflected in the premium which is usually far in excess of what people are willing to pay," he explained.
What about the cost of local private care provision? Will Sana reach agreements with providers?
"We have started talking to them about logistics and administrative procedures so far. There is no doubt that the cost of care is high and we will work hard to keep it under control as if the costs go up then the premia have to go up. Medical insurance is not like other categories as people do not like to quibble about the cost when their health is at stake, even when the impact is cushioned by insurance," he said.