Resolution Health turns in strong performance as industry struggles

Resolution Health remains in the top echelon of medical schemes that continued to perform strongly in an industry that struggled with a net healthcare deficit of almost R1-billion last year.

Resolution Health reported earnings of more than R10-million for the 2008 financial year, a period in which no fewer than 77 schemes showed operating deficits, 26 of which exceeded R20-million each. These included some of the high profile players in the medical scheme industry.

These and other financial contrasts between the performance of the healthcare market and Resolution emerged last week with the release of the Council for Medical Schemes Annual Report, which detailed the financial and other relevant standings of medical scheme players.

Schemes such as Bonitas, Medicover, Pro Sano and Oxygen all experienced healthcare deficits in excess of R60-million with healthcare deficits of R218-million, R95-million, R67-million and R60,7-million respectively.

Healthcare expenditure also featured negatively in the report, with Gross Healthcare Expenditure as a percentage of Gross Contribution Income (GCI) exceeding 80% in schemes such as Bonitas, Discovery and Medihelp. Resolution expenditure remained consistently low at 74.4%.

“This is one of the key indicators that Resolution is looking after our member’s money responsibly and effecitvely,” said Acting Principal Officer of Resolution Health Medical Scheme, Helene van der Walt. “Resolution remains in the upper levels of the 37 largest medical schemes in the South Africa.”

Affordability continues to play a key role in medical costs, with the man on the street needing to shop around for the best benefits and prices during the current recession. As in the past, Resolution has proved to be a highly affordable healthcare option coming in with a GCI of just R589 as opposed to other leaders in the market such as Discovery, Bestmed and Bonitas who came in with GCI’s of R887, R870 and R704 respectively.

Average administration fees paid to administrators was set at 74% in the Report with a number of schemes exceeding this average, including Discovery, Fedhealth and Momentum. Resolution remained consistently in line with this average at 74.8%.

While pensioner ratios remained high in the market, with a ratio of 6.7%, Resolution recorded a ratio of just 1.62% and an average age per beneficiary of 29.29 years as opposed to the market average of 31.5 years.

Investments also proved to be a high point for Resolution in 2008, with average return on investment for the year set at 10.75 %. “ Markets have proved volatile during the recession and many schemes have seen investment losses,” said van der Walt, “ however sound investments in money markets have meant good returns for Resolution.”

“The medical scheme market remains volatile and many factors contribute to the success of a well managed medical scheme”, said van der Walt. “At the end of the day all these factors need to be considered together with quality of benefits and services to draw a conclusion as to who the market leaders are. In this regard, we believe Resolution is up there with the best.”

Resolution has assured its members that recent disputes which the administrator has had with the Council for Medical Schemes are in no way connected to the Medical Scheme and that the Scheme remains sound and able to administer itself should this be required at some point in the future.

“It is business as usual at Resolution Health Medical Scheme, said van der Walt. “We continue to provide excellent services and benefits to all our members.”