Resolution Health sharply reduces non health costs

Resolution Health Medical Scheme has reduced its non health costs to below the industry average of open medical schemes in line with the requirements of the Council for Medical Schemes.

It is also resolving a concern of the council regarding two trustees and is in ongoing discussions with the council concerning a distribution agreement between Resolution Health Medical Scheme and a company performing distribution services for the schemes products.

Largely due to high marketing and distribution costs associated with building its customer base over the past six years, the schemes non health costs were above the industry average, attracting the disapproval of the council.

"Now that we have established economies of scale with more than 46,000 principal members and over 110,000 beneficiaries, we have been able to sharply reduce our non health costs to R77.42 per member per month compared to the industry average of R90.80 as at January 1," said Dr Lenny Modisane, principal officer of Resolution Health Medical Scheme.

Resolution Health Medical Scheme offers some of the most affordable and benefit-rich medical scheme options available in the South Africa.

Modisane said that following a communication received on March 1 from the council regarding the suitability of two trustees, these two trustees are considering their positions and an announcement will be made in due course.

"We have acted as speedily as possible to satisfy the councils concerns on our non health costs and trustees and are in ongoing negotiations regarding the distribution agreement," said Modisane.

"It has always been the schemes policy to attempt to resolve differences of opinion with the council as soon as possible in the interests of all parties concerned."

The dispute between Resolution Health Medical Scheme and the council over the distribution agreement is currently being examined by the scheme's legal advisers.

Modisane said management is continuing to liaise with the council in order to resolve certain issues and will continue to act in the best interests of the company, staff, service providers and scheme members.

"Due to the complex regulatory environment which surrounds the medical scheme industry, Resolution Health is just one of many schemes that from time to time have talks and discussions on regulatory issues with the council. We are by no means unique and are aware that several other schemes are constantly negotiating with the council on a wide range of mainly technical and structural issues," said Modisane.