Growth, stability and lower non-healthcare costs take centre stage at Resolution Health AGM

In an industry plagued with challenges and spiraling costs, Resolution Health Medical Scheme (RHMS) today reported on increased solvency, decreased non-healthcare costs and growing membership at the scheme’s Annual General Meeting in Randburg.

Numerous medical schemes are experiencing depleting reserves and solvency levels and face the threat of mergers or curatorship by the Council for Medical Schemes (CMS). Spiraling healthcare costs and concerns that medical schemes could be pricing themselves out of the market are in the spotlight as is the survival of medical schemes against the backdrop of the proposed National Health Insurance system proposed by government.

In sharp contrast to these industry trends, RHMS today reported a 2% increase in its solvency levels for the year ending 2010. Furthermore, the scheme reported that it had been successful in the financial turnaround of the scheme with a 150% increase in profitability between 2009 and 2010.

“Improved corporate governance practices, prudent financial management, the introduction of new and advanced processes and a much greater emphasis on patient care have led to a marked improvement in solvency levels and reserves over the past year. These practices have been maintained in 2011, enabling our members to reap the benefits,” said Mark Arnold, Principal Officer of RHMS.

In addition, and despite inflationary pressure from private healthcare expense escalation, RHMS was able to limit its 2011 average contribution increase to just 8%, the second lowest in the market.

The maintenance of low contribution increases should be seen in light of two factors Arnold said. “Firstly, RHMS provides affordable medical aid plan options which ultimately means low rand-for-rand contribution increases are encapsulated in the 8% increase. Secondly, members’ product benefits were not sacrificed in order to attain these low contribution increases.”

The CMS has, in recent years, expressed concern about non-healthcare costs within medical schemes and, as such, RHMS was able to reduce non-healthcare costs by 5% in 2009/10.

While many schemes have seen a decline in membership due to a variety of reasons including cost escalation, retrenchments and affordability issues, RHMS reported a marked gross membership growth over the first quarter of 2011 of 15.99%, taking the number of lives covered by the scheme to almost 70 000.

“2011 has seen the introduction of a number of key systems and processes within the scheme,” said Arnold. “These include the development and implementation of integrated systems. Add to this a loyalty programme that encompasses multi-stakeholder participation, and it is clear to see that the scheme is on a growth path that is set to continue throughout 2011 and beyond.”

A fundamental addition to RHMS’ approach to the provision of healthcare is the introduction of Patient Driven Care (PDC™), an advanced managed care model that provides proactive care to high risk members, thus reducing healthcare events and driving down costs.

“RHMS is committed to delivering healthcare in a new way; one which is driven by offering improved care, greater affordability and suitable healthcare solutions suitable for many South Africans,” said Arnold.