Developing a Channeling Framework for Healthcare Service Provider Networks for a Medical Scheme in South Africa

Worldwide, healthcare costs continuously rise, impacting the medical scheme member’s contributions. Healthcare cover in the South African private health sector is becoming unaffordable to many people, and effective cost management in this context is becoming essential. This is due to an increase in utilization, the introduction of new, more expensive technologies and medicines, and current legislation. By channeling members toward providers with a more cost-effective, high-quality approach to treatment, medical schemes can manage costs while still providing their members access to the best care available. This chapter aims to demonstrate how the pragmatic application of the elaborated action design research (eADR) approach can be applied to solve a real-life business problem in a case study scenario. The research is based on the stakeholder theory and utilized a mixed-method approach in analyzing secondary data and semi-structured interviews. Service provider profiling was used to rank the service providers according to industry benchmarks, and a soft-channeling approach was taken to guide patients toward more cost-effective service providers. Through the iterative cycles of eADR, three different artifacts were developed and evaluated to create a pragmatic, workable solution.