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SUB CATEGORIES General  |  HIV |  Medical Schemes | 

Maximising member value

26 June 2015 Peter Jordan, Fedhealth
Peter Jordan, Fedhealth Principal Officer.

Peter Jordan, Fedhealth Principal Officer.

Addressing members at the 79th AGM of Fedhealth, Fedhealth Principal Officer, Peter Jordan said that Fedhealth had experienced a challenging year in 2014 with healthcare expenditure rising mainly due to unregulated prices and an increase in utilisation by members.

Jordan noted the scheme had recorded a gross underwriting surplus of R259 million. It did, however, also record a net deficit of R24.5m mainly due to the adverse claims experience. This was fortunately buffered by the Scheme’s healthy reserves (37,24%), which are well in excess of the 25% regulatory requirement.

The scheme’s investment return, managed by its investment committee, performed well in 2014, reducing the net deficit by R91 million and maintaining the Scheme’s accumulated funds at approximately R1 billion.

Through prudent investment of members’ savings monies, Fedhealth has been able to provide members with an average return on their accumulated savings of 6.14%, up from the average return of 4.92% in 2013. The scheme also contained its non-healthcare expenditure to 10.94% of gross contribution which is in line with the guidelines from CMS and maintained its AA- global credit rating for the eighth year in a row, with a stable rating outlook.

Commenting on initiatives during the year, Peter Jordan, says 2014 had seen the introduction of two exciting new product options to target the needs of a younger, up-and-coming target market. “Both options have shown excellent growth. A screening benefit was also introduced on all options, with the exception of Blue Door, with preventative programmes offered for women, children, cardiac and geriatric care,” he says.

In an effort to ensure sustainability, the Scheme’s GP and Specialist Network has continued to grow and strengthen allowing members unlimited access to this network and preventing out-of-pocket expenditure for members. Jordan says sustainability with skilful risk management is key for the Scheme and, in light of this, a big focus for 2014 was the introduction of co-ordination of members’ care termed the Fedhealth Three Sixty Degree Care approach. This approach saw GP’s becoming the co-ordinator of the member’s care. “This is a member-centric initiative aimed at improving health outcomes, enhancing customer experience and reducing healthcare spending,” says Jordan.

Another way to ensure sustainability is by identifying high-risk members who have or are likely to develop conditions that can be managed or even avoided through Beneficiary Risk Management. The scheme’s BRM Programme assists in this process by proactively identifying high-risk members. This early detection will remain critical moving forward.

Commenting on future sustainability, Jordan said the Scheme’s vision of maximising member value through innovation and managing the risk pool would continue to drive a five-year business strategy based on membership growth and better management of the risk pool.

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