By Riaan Reay | November 20, 2019
Medical Terminology: Chronic, Acute and Formulary medicines, network hospitals and hospital plans
Let me start by saying that most people make impulsive decisions when it comes to their physical health. When faced with an emergency or being ill, who takes the time to consider all the options? When buying a house, car or when choosing cell phone contracts, the decisions are made with much deliberation, while expenses such as medical aids, life and risk insurance are made based on emotion.
We feel it is needed and everybody has it so I should also have it… The terminology scares us and the broker impresses us so much that we finally say “yes, where do I sign?” Another emotional motivation is because we had a loved one pass on without such cover and now we want it (because we don’t want to be like aunty Betty with the prospect of struggling along since uncle Ben passed) without thinking of our exact need.
Have you thought of the financial implications of this way of decision making on your short term risk insurance? With that said, let us talk about medical aid terminology so that you can make the best choice on the right cover for you.
I would like to discuss the following terms briefly. Chronic and acute medicines, formulary lists of medicine, network hospitals, hospital plans and hospital plans (no this is not a typo – there is a catch).
Chronic medicine is used to treat certain life-threatening conditions such as hypertension and diabetes (a long list, called PMB conditions, on your medical aid brochure) It is important to note that the medicine for these conditions fall into a basket. This basket is subject to certain limits, which means that any medicine more expensive than the basket value, you will have to pay the difference (even if you select a more affordable generic substitution)
Acute or day-to-day medicine is the name given for all medicine that is not for chronic or oncology conditions and these medicines are paid from your savings account. Your savings account is also used to cover your “out of hospital” blood tests, scans, physiotherapist visits and all over the counter medicine. This is true for all the modern non-traditional medical aids.
My favourite topic is formulary lists. It is a list of medicine that is equal or less than the medicine reference price. All medical aids have formulary lists and my prediction is that these lists are here to stay. Medical aid options on the lower end of the spectrum have very rigid formulary lists and doctors need to prescribe accordingly (It could be very effectively used if you ask for therapeutic substitution). If doctors do, then all members on these options will feel that they get their monies worth. It is financially beneficial for you to ask your doctor to prescribe medicine on this list and to register yourself on the chronic options. It is law (for the doctor to apply for chronic medication) and for your best interest that the doctor prescribe according to the formulary list.
Network hospitals are hospitals that have a payment arrangement with your medical aid. This ensures that all services rendered at these hospitals are covered in full. Most of the doctors and other medical personnel are contracted in at the rates which the medical aid agreed to pay (however limits do apply, depending on certain procedures).
Hospital plans – The pitfall of many a man. Hospital plans offered by registered medical aids (as mentioned in my previous article) have all costs covered without the need to sell your farm or your organs on the black market. There is a list of conditions that qualify, with limits per member or per family per annum.
Then there is the hospital plan (rather seen as hospital insurance) offered on TV commercials, where they mention that they pay you out in cash for every day that you spend in hospital. Is this true? Yes it is. Is the amount enough? No, not by a long shot. Firstly there is also a list of procedures covered, so be cautious! The second thing to take note of is that the first day is often the most expensive, but your payout is often made on a “per day” rate. Thirdly, please consider that an ICU visit could cost you more than a small farm! (then you will also need to claim a piece of land by force, but for different reasons).
I trust that the information supplied is helpful for you to choose wisely.