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Category Healthcare
SUB CATEGORIES General  |  HIV |  Medical Schemes | 

Medical Aid landscape shifting

04 March 2008 Samwumed

New groupings look for improved economies of scale and bargaining power to bring down the cost of medical cover

Open commercial medical aid schemes look set to come under continued threat as the trend towards establishing new closed schemes gathers pace.

Most recently, trade union Solidarity announced its intention to form a medical aid scheme for members. This follows the recent success of the Government Employee Medical Scheme (Gems) for public sector staff and, before that, Samwumed – a worker-based medical scheme for local government employees nationally.

According to Samwumed Fund Officer, Neil Nair, the rising cost of providing cover makes it inevitable that groups like trade unions will seek to achieve greater economies of scale and bargaining power by launching their own closed schemes. Another benefit is the potential to reduce non-healthcare expenditure.

Samwumed, for example, is a self-administered scheme that prides itself on low administration fees that equate to an average monthly cost per member of just over R90. Compared against both open and restricted medical schemes, Samwumed’s non-healthcare costs are amongst the lowest in the industry.

The scheme covers almost 80 000 lives and boasts financial reserves far above the 25% required by legislation. According to Nair: “The financial strength of the scheme has allowed the trustees to enhance benefits enjoyed by members while keeping contribution increases to a minimum.

“This has been made possible by containing operating costs and the fact that, as a not-for-profit organisation, we have no shareholders to satisfy.”

Samwumed’s contributions are affordable and benefits include ambulance services, a countrywide private hospital network, an excellent chronic programme and comprehensive HIV/Aids programme.

Members can go to doctors or specialists of their choice, and the scheme has increased the number of pharmacies on the network. No late joiner penalty fees are imposed on members, regardless of age.

“Strong worker control is paramount in the governance of the scheme and the board is composed of a 100% worker base, trained in the essentials of medical aid governance.

“Sound governance, self-administration and an in-house healthcare delivery model have allowed the scheme to manage a prudent contribution policy, while ensuring that the healthcare needs of its members are met,” said Nair.

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