Charles Alberts: Is open-referral private PMI right for employers?

It is still too soon to tell whether open-referral schemes are fully working for employers.

The important questions are: are premiums becoming more sustainable, and are employees who use the schemes satisfied?

Open referral promises to give employers more cost control, an attractive proposition in an environment where premiums often rise by double digits. This will be difficult to monitor because most schemes are subject to volatility in year-on-year claims, and, in turn, premiums.

However, we do expect cost savings to filter through in the medium term. One insurer offers a part-rebate of claims at certain hospital groups, which offers a more immediate, tangible benefit.

Are employees satisfied with their doctor providing an open referral and the insurer in control of consultant options? Our [employer] clients’ experience so far is less controversial than some expected. With more than 10,000 consultants recognised under open referral, and the insurer still offering members a choice of up to three consultants, criticism has been limited.

With the promise of more sustainable premiums, a key question for employers to ask is: will open referral deliver fast, quality care to employees at a convenient time and location?

We believe the answer would be yes in most instances, but not all. Some insurers have been slow off the mark, but they now recognise their obligation to arm employers and benefits consultants with all the necessary information to reach an informed decision.

Charles Alberts is senior employee benefits consultant at Lorica Employee Benefits