Summary of Findings T.W.I.G SA Private Healthcare

Summary of Findings T.W.I.G SA Private Healthcare Tracker Study 2005 / Interim 2006 Medical scheme members

A total of 3535 medical scheme members were interviewed during the course of 2005.

In the 2005 findings for medical scheme members, T.W.I.G SA aim was to diversify and include statistically representative numbers of members drawn from the smaller administrators who have started to come to the fore in the 2003/04 research.

The trend identified with smaller administrators in 2004, continues, with some of the smaller administrators clearly offering significant competition service wise to some of the more traditional players in the field.

Overall service ratings given by medical scheme members continue to improve and there has been a noticeable shift upwards on a ten point scale rating, of ratings from 6 & 7 to ratings of 7 & 8 compared to 2004. This confirms the downward movement at the beginning of 2004 was mostly based on the impact of the implementation of PMBs.

Membership overall appears to be more stable, and there is a decline in the number of traditional medical scheme members who indicated that they no longer have medical scheme cover.The number of new members who indicate they have belonged to a medical scheme for less than 12 months is in line with the growth shown in the Registrars report for 2006

Member contributions from their own budget has also stabilised following the increase experienced by most members in 2004. This is in line with the lower medical scheme premium increases at the beginning of 2005 and 2006. Employer contributions have remained stable with interesting growth in the number if respondents who indicate that they are currently receiving a set rand amount contribution from their employer towards their medical aid premium.T.W.I.G SA will follow this trend over the next two years.

Most medical scheme members appear to be introduced to a medical scheme through their company.Newsletters remain the preferred source of communication, but information received via SMS or e-mail is increasing as a favourite as well as information received with claims statements. While it is a given fact that all members must receive a membership brochure this appears to be used more as a reference guide when there are queries and appears in most instances is skimmed through and filed away.

Medihelp have received the highest overall excellence rating for service delivery across all service areas evaluated, followed in close second place by Discovery Health. Medscheme has made a making a remarkable recovery from the past three years of poor service results coming through in third place.

Call centre ratings continue to record some of the lowest ratings for service delivery.On going training and upgrading of call centre operators skills continues to remain a priority.

Efficiency in the processing and payment of claims continues to improve. Some administrators however still have room for improvement in this area.

Open scheme versus closed scheme members

T.W.I.G SA has for the first time looked at service ratings and member levels of satisfaction between the open scheme and closed scheme environment. Members who currently belong to a medical scheme option within the open scheme environment indicate higher levels of satisfaction with service delivery and medical scheme benefits.

There would also appear to be a higher level of overall satisfaction with both benefit and service from medical scheme members who belong to an open scheme, versus those who belong to closed schemes. This will be evaluated more closely in the on going 2006 research.

Medical scheme benefits

Members ability to choose from several medical schemes has seen a 20% drop. There has also been a drop of 13% from 2004 ratings in the number of medical scheme members who indicated that they are very satisfied with their overall medical scheme benefits. These lower levels of satisfaction have continued into the first quarter of 2006. However the dissatisfaction with benefit options does not appear to be attached directly to individual schemes but is evident across the entire member respondent base interviewed.

It is also significant that members indicted a significant drop in full understanding of their medical benefits compared to results from the 2003 Private Healthcare Tracker study. There were a total of 45 benefit options merged or discontinued moving into 2006.If there is continued rationalisation of benefit options this level of dissatisfaction is likely to continue as well as member confusion over their exact scope of cover.

The number of members expressing high levels of overall satisfaction with both their medical scheme benefit and levels of service has decreased and moved downwards from very satisfied to just satisfied. T.W.I.G SA is of the opinion that continuing restrictions on freedom of choice either due to benefit consolidation or because of financial realities, resulting in buy down will mean that this trend will probably continue for the next two to three years as legislation continues to bite in the area of benefit design, and there is less and less flexibility or choice given.Long term this may well influence members perception of value or quality delivered by the scheme, versus premiums being paid.

Overall, members continued to identify with positive word associations with regard to their medical scheme as in 2004. However there is a much larger number of members who indicated a level of neutrality with regard to certain statements where as in 2004 members were much clearer in disagreeing when negative word associations were applied to their scheme.

Most members perceive the value for money offered by their medical scheme benefits as good or very good, but very few rated it as excellent.

Despite unhappiness with the benefit structures, members mostly perceive that they receive value for money versus premium paid.

Medical scheme members who changed medical scheme or medical scheme option

T.W.I.G SA completed 500 telephonic interviews with members of medical schemes who had either changed medical scheme or medical scheme option in the two years prior to the interview.

Change of medical scheme is mostly dictated by the employer and does not appear to include much member participation.

While members did not indicate high levels of dissatisfaction with the previous medical scheme they belonged to, when asked which they would choose most respondents indicated they would choose their current medical scheme. This indicates that where a change has been made, in most instances it has been an improvement on the previous scheme. In the light of FAIS and much negative comment on the role of intermediaries in the industry, this is a significant finding.