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SUB CATEGORIES General  |  HIV |  Medical Schemes | 

Healthcare consumers urged to demand medical scheme accountability

28 June 2007

South African consumers of healthcare are way too passive in demanding accountability for how their money is spent by medical schemes, especially those with inflated operational costs that fatten the coffers of administration companies.

Speaking ahead of the launch of the Samwumed medical scheme's new branding in Cape Town tomorrow, Fund Officer Neil Nair said that all medical schemes work under the auspices of the same legislation that requires uniform minimum standards.

"As a result, you would expect medical scheme costs to be in the same ballpark. The fact is variances are huge. And in many cases, its the larger schemes that charge members proportionately more, in the process confounding the theory of economies of scale.

"The fundamental premise that medical scheme's are there to provide members with healthcare, rather than holding companies with profits, appears to have escaped some schemes whose members would do well to exercise their rights with regard to how their contributions are spent."

Nair noted that the cost to administer medical schemes varied from less than R100 per member per month to over R200 a member, with very little correlation between this number and the size of the scheme.

According to an Alexander Forbes Survey of medical schemes, Samwumed's monthly expenditure on administration was R81 per member last year. The equivalent figures for Discovery and Medshield, for example, were R209 and R156 per member.

Samwumed is a restricted scheme available to all local government employees. Self-administered and governed by a Board composed exclusively of elected workers, the Scheme has 22 000 principal members with more than 77 000 lives.

"Everything from membership, claims, assessing and customer service to marketing and advertising is dealt with internally. In three years we've grown membership by more than 25% in areas outside of the Western Cape, stretching across 250 local authorities nationally.

Despite containing contribution increases over recent years, Samwumed also prides itself on a solvency ratio way above the 25% required by the Medical Schemes Act.

"The Scheme is committed to a progressive healthcare dispensation in South Africa. To this end, we're dedicated to the principle of 'not-for-profit' and endeavour to maximise member benefits through the provision of comprehensive primary and tertiary care benefits. In addition, we use a model that is not predisposed towards inflated non-health costs," said Nair.

He noted that while legislation prescribed the minimum requirements for effective medical scheme operations, it did not stipulate a capping on expenses or provide an indication of what administration expenses should amount to.

"In addition, the fact that we live in a market orientated society has not translated into vigilant, questioning consumers. As a result the expenses associated with running a medical scheme are afforded little attention, opening the way for inflated cost structures that prejudice members and benefit administrators."

 

 

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