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MedCo Charging Policy Survey

Published 29 January 2020

I am writing to inform you that at a recent MedCo board meeting the directors decided to review the current charging policy.  This was carried out in conjunction with a review of the draft budget forecast for 2020.

The main principles of any future charging policies are to: -

  • ensure the future sustainability of MedCo
  • provide a quality service of the highest standard within any budgetary constraints
  • whenever possible to apply a proportion of surplus funds in abatement of annual fees for existing users
  • implement a fairer and more transparent system of charging.

In past years MedCo has built up a surplus of funds mainly due to the number of registered/operational Medical Reporting Organisations (MROs). 

MROs have traditionally been responsible for over 90% of MedCo’s annual income.  In the past 2 years there has been a significant reduction in the number of operational MROs.  The reasons for this are: -

  • the prohibition on registering “shell” MROs
  • failure to successfully pass audit (i.e. failing to comply with the relevant qualifying criteria)
  • decisions not to renew registrations due to market uncertainty

Annual fees paid by Direct Medical Experts (DMEs) is the only other main source of MedCo’s income.  Separate fees are not charged for their accreditation or continuing education training.  Neither Indirect Medical Experts (IMEs) or Authorised Users (AUTs) pay any fees, despite the cost of providing them with various MedCo services.

Since commencing operations in April 2015 MedCo’s operating costs have increased year on year.  However, since the financial year ended 2016 income has fallen.  The main reasons for the increase in operating costs are: -

  • the provision of additional, and changes to existing, services
  • IT. operations (including website, ongoing services and work on proposed government reforms)
  • increase in staff resources due to operational requirements
  • extensive cycle 1 MRO audit programme
  • new accreditation scheme and CPD programme
  • renting of meeting room facilities

MedCo has no employees and contracts out all of its operational staff resourcing and business support to MIB Management Services Limited (MIBMSL).  As a result of changes to MIBMSL’s costs structuring the annual service costs forecast for 2020 will increase. MedCo also has contracts with other third party suppliers, some of which include periodic charge increases, as well as the ability to charge for ad hoc additional work requests and “charges per registered user”.

The following table gives an indication of the fluctuation in turnover/expenditure and annual surplus/deficit since MedCo commenced operations in 2015.

 

Surplus/Loss Accounts  -  2015 to 2019

         

Year End

Turnover

Expenses

Surplus/Deficit

Retained earnings at year end

2015

2,367,980

1,559,874

808,106

808,106

2016

5,818,225

1,907,632

3,910,593

4,718,699

2017

2,836,045

2,376,302

459,743

5,178,442

2018

2,708,231

2,808,085

-99,854

5,078,588

2019*

2,150,000

3,195,000

-1,045,000

4,033,588

         

Draft Budget Forecast - 2020

2020**

1,681,000

3,849,000

-2,168,000

1,865,588

 

*              2019 accounts subject to audit

**            Subject to ongoing review

 

It is clear that the future sustainability of MedCo cannot be guaranteed without taking action to increase forecasted income and reduce expenditure.  With this in mind MedCo’s board of directors have decided that a new charging policy should be introduced in 2020 in conjunction with a review of the current service levels it provides and associated operating costs.

There are a number of charging options that have been considered, including the introduction of an “all users pay” policy, but before making any decisions the MedCo board wish to obtain the views of all of its registered users.  I therefore invite your organisation to complete a short targeted stakeholder survey.   If you intend to take part in this survey please try to ensure that your organisation only submits one response

 

Complete the Charging Policy Survey

 

The survey will remain open for 2 weeks and close on Thursday 13th  February 2020.

 

Martin Heskins

Executive Chair

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