Pro Sano’s health improves
The Medical Scheme industry has in recent times faced a series of challenges including regulatory, structural and cost versus benefit balancing, among others. Against this backdrop, Cape Town based Pro Sano Medical Scheme has drawn lessons from its curato
Mahmood’s primary focus has been on ensuring the financial stability of the Scheme and dispelling any negative perceptions that may be associated with the curatorship status, whilst improving the Scheme’s value proposition for members and prospective members.
“A great deal of progress is being made at Pro Sano with the Scheme on course to achieving something of a financial turnaround,” he reports. “Added to this, we are successfully curbing member attrition rates.”
These milestones may be attributed to several factors underpinned by a focused strategy. Pro Sano has modified its business model with the Scheme concentrating specifically on State-Owned-Enterprises, and this niche focus is beginning to yield rewards, according to Mahmood. Furthermore, administrative services, which were previously outsourced, have now been incorporated into the business; so Pro Sano has become self-administered. Some cost-saving measures have also been implemented through various interventions, especially around curbing hospital and medication costs. According to Mahmood, this is an indirect benefit he believes Pro Sano members will appreciate overtime. Such improvement of efficiencies has further contributed to the Scheme’s financial stability.
Mahmood is realistic about the road ahead, noting that a number of challenges remain. Chief among these is ensuring a good cross-subsidisation of young healthy members to manage the ageing profile. Mahmood points out that this challenge is not exclusive to Pro Sano; indeed, trends point to the fact that South African young adults tend to consider medical cover the least of their budgeting priorities. This situation changes only when they are offered medical aid as an employment benefit, where they become members of their employer’s Scheme.
Mahmood says he is also closely observing the transition the sector is going through. “Given the consolidation in the industry, it’s a fact that many smaller schemes may not survive,” he says. He has also not ruled out the possibility of an amalgamation where there’s a strong business case to support Pro Sano’s strategy.
Moreover, the introduction of the National Health Insurance (NHI) is bound to have a significant impact on the way schemes operate: at present, around 16% of South Africa’s population subscribes to medical aid – but, with the introduction of a mandatory contribution to NHI, it’s possible that the percentage of people who can afford private healthcare will decrease substantially. “Thus, healthcare administrators may be required to play a different role, perhaps supplying top-up health insurance or gap products, as they do overseas in countries where a national health service is in place,” Mahmood says. He notes that, already, a number of insurers have implemented services outside of traditional health insurance, allowing them to cross-sell these related products to clients.
“Given all these challenges, my primary focus is to improve the Scheme’s financial health while ensuring an excellent service to our members. Although we have already made great progress, we are looking forward to doing even more to improve our service and products for our members,” Mahmood concludes.
