Will the NHI be the industry’s four leaf clover?

Immunity from a challenging operating environment is a luxury that many stakeholders in the insurance industry seek, but very few find. This has been the unwanted mantra of the industry over the past two years, and the medical scheme industry seems to sometimes be more challenging than others when it comes to the enormity of the task of restoring parity to the operating environment.

It becomes difficult to restore order in the industry when there are no tariffs to regulate what healthcare providers can charge medical schemes. At the end of the day, rising costs have to be passed on to members of medical schemes, and so it becomes a difficult task for the Council of Medical Schemes (CMS) to protect the public.

The enormity of the task

In the CMS 2013/14 Annual Report, CMS Chairperson Professor Yosuf Veriava, pointed out the enormity of the task awaiting the industry. The provision of quality healthcare remains difficult. All citizens, regardless of whether they are serviced by the public or the private healthcare sector, deserve quality care. The right to have access to healthcare in its preventive and curative forms is enshrined in our constitution.

“An essential question is whether healthcare funders are fulfilling their responsibilities in ensuring that service providers are offering good quality care. In order to protect the interests of scheme beneficiaries, the CMS is presently investigating how best to monitor the quality of care beneficiaries receiveby monitoring the outcomes and evaluating patient experiences,” he said.

He added that the need to provide all South Africans with quality care goes beyond the moral imperative. “Important as this may be, it also touches the very stability and economic vigour of our nation. People who are unhealthy are less productive and contribute less to the growth of our communities. If we want a thriving nation, we need to keep it healthy,” continued Veriava.

Looking for that silver lining

The current standoff between healthcare providers and medical schemes is growing in intensity. A step in the wrong direction may create a storm that will take a herculean effort to contain and overcome.

And who can blame medical schemes? Without the existence of tariffs in the industry, healthcare providers have been left free to charge what they like to medical schemes, and the existence of Prescribed Minimum Benefits (PMBs) is hardly a safe fitting harbour that has the best interest of medical scheme members at heart.

The whole country is waiting for government to give further insight into its thinking around the National Health Insurance (NHI) programme. Will this be the intervention needed to settle the standoff?

Veriava added that the successful implementation of the NHI is a crucial stepping stone to a sustainable future.

"The NHI has been widely misunderstood and it is evident that many view it as a threatening development. I do not believe that the introduction of NHI will mean the end of the private healthcare sector or medical schemes. Medical schemes will continue to play an important role for those individuals who wish to have healthcare cover over and above what the NHI will offer,” he said.

He added that the NHI process will bring about a greater degree of co-operation between the public and private healthcare sectors. However, the challenge is to develop innovative approaches to promote such collaboration and enable these sectors to flourish.

The evolving medical scheme member

Technology has made the world a smaller place. Trends which affect international markets find their way into the South African market quicker than in other countries on the continent. This means that medical schemes cannot treat their policyholders in a traditional manner.

The CMS has realised this and has created a system where medical schemes and policyholders engage on a more meaningful basis.

“On the subject of co-operation, it was most encouraging to see the CMS and medical schemes working closely together on a number of member advocacy projects during the financial year. For example, a marketing initiative of the CMS highlighted the fact that medical schemes exist for the purpose of serving their beneficiaries and encouraged members to participate actively in the running of their medical schemes. Many schemes reported a high degree of involvement by members in their annual general meetings and other activities as a result of this initiative,” said Veriava.

It will be interesting to see how this evolves as there are significant industry trends that medical schemes need to consider. Younger members are getting increasingly restless about the fact that they are cross subsidising older, sicklier members on the same scheme. It is these members who are leading the calls for personalised offerings.

Personalised schemes will not be easy to achieve. What works for one may not work for the other. The question is, do medical schemes have the capacity to cater for this desire? Can it become a reality in a country like South Africa?

Editor’s Thoughts:
The NHI may turn out to be a blessing in disguise. If members are satisfied with the basic services that they will receive from government they will see medical schemes as a safety net rather than a scheme that needs to cover every aspect of their medical needs. In this way, personalisation can become a reality. However, there will be many members who will simply not trust the NHI. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts [email protected].

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