The State of Medical Schemes in South Africa
Rates soar in 2017 – State of Medical Schemes
Medical Schemes rates have increased by between 10% and 12% in 2017, again, well more than inflation. The Consumer Price Index (CPI) for the first quarter sits at around 6.8%, meaning that rates are, in some instance, almost double that of inflation! Here we will have a look at the state of medical schemes in South Africa.
Rates up Benefits down – State of Medical Schemes
Of concern to consumers will be the fact that, while rates have hiked significantly, the range and level of benefits have, in many instances, substantially reduced.
Jeremy Yatt, Fedhealth’s Principal Officer, explains that medical schemes are under immense pressure to meet customer satisfaction.
The problems stem primarily from flaws within the South African medical scheme model. The system has forced Medical schemes into taking tough measures, to stay in touch with member’s needs, while maintaining financial stability.
Fedhealth’s Yatt defines five contributing factors that are making medical schemes unaffordable:
- Malpractice and negligence insurance costs have rocketed! These increases ultimately find their way back to member contributions.
- There is an increase in medical procedures being performed, in deference to non-invasive treatments.
- It would reduce supplier demand on private facilities and enforce cost reductions.
- Health care billing in South Africa is non-inclusive. Final charges are rather a consolidation of bills from the various contributing parties. That makes it difficult for medical aids to negotiate lower procedural pricing because there are simply too many role-players.
- Legislation currently restricts Medical schemes from incentivising members who have low claim profiles.
So what solutions are there to solve these problems?
- Focused Government involvement is the key to providing a measured improvement to health care. The government should cap fees charged by the private medical sector, which is often as much as five times that of prescribed medical scheme rates.
- Matt believes that government could make it compulsory for young people to join medical aid schemes, where they earned more than a predetermined threshold.
- Campaigns to encourage people to look after their personal health. It would ultimately lead to a healthier nation and would greatly assist in forcing medical claim costs downwards.
- Yatt believes that there is a need for all role-players to work together – medical schemes, doctors, hospitals, government and the likes – to refresh the way in which health care is handled in South Africa.
Yatt certainly has a great understanding of the complexities currently plaguing the Industry in South Africa. And it is certainly encouraging to see the way in which Fedhealth find health care solutions for their members.