Council for Medical Schemes - 2006/7 Annual Report

The report reviews the work of the Council as it seeks to secure adequate protection for beneficiaries of medical schemes, provide support to trustees, increase understanding of the way medical schemes function and encourage a medical schemes market that operates in a clean and fair manner. 

The report also contains details on the financial performance of medical schemes during the 2006 financial year.

* There were 124 registered medical schemes in 2006, down from 131 in 2005. 

* The number of principal members increased 6,2 % to 2 985 350. The number of dependants increased 2,9% to 4 141 993. As a result, the number of beneficiaries went up 4,3% to 7 127 343.

* Gross contribution income was R57,6bn, up 6,2% from R54.2bn in 2005. R51,3bn was paid out in claims, an increase of 12,4%. R17,9bn was spent on hospitals. Private hospitals accounted for R17,7bn, an increase of 13,6%. Public hospitals were paid an amount of R273,6 million.

* Medical specialists received R10,9bn, a 17,1% increase while general practitioners were paid 17,2% more at R4,4bn. Dentist accounted for R1,7bn while dental specialists received R434 million. Other benefits paid to supplementary and other allied health professionals amounted to R4,5bn.

* Expenditure on medicines dispensed by pharmacists and providers other than hospitals went up 8,8% to R8,7bn compared to the R8bn in 2005.

* Total non-health expenditure rose 3,7% to R8,3bn in 2006. This was made up principally of administration expenditure, which grew by 7,3% to R5,9bn; managed care fees which went up 9,6% to R1,4bn; broker costs which increased by 7,1% to R982,5 million from R917 million and bad debts which decreased by 64,1% to R72,4 million from R201,8 million in 2005. 

* The overall net surplus for all schemes was R1,1bn. While schemes made an operating deficit of R2,1bn, income from investments and other sources was R3,3bn, which resulted in the overall net surplus of R1,1bn.

* Net assets of schemes rose by 6,8% to R24,5bn, resulting in reserves growing by 4,7% to R21,8bn. The solvency ratio was 38% from 39% in 2006.  Open schemes showed a solvency ratio of 27,7% while restricted schemes were at 64,7%.

The report also provides information on the Councils work during the year, including:

* Dealing with 2 212 complaints from beneficiaries about their schemes, an increase of 21% when compared to the previous year.  Of these complaints, 26% were resolved within 30 days and another 42% were closed within 60 days. We also dealt with 34 appeals arising either from decisions of schemes' disputes committees or parties aggrieved by decisions of the Registrar.

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