FANews
FANews
RELATED CATEGORIES
Category Healthcare
SUB CATEGORIES General  |  HIV |  Medical Schemes | 

SA’s medical schemes environment is undergoing change: PwC research paper

12 November 2014 PwC

Innovation empowers members of medical schemes to push for transparency to make better-informed choices, according to PwC’s Research paper for medical schemes, 2014: Drivers of change. This will drive medical schemes to rethink how they do business. The paper is based on research and interviews that were conducted with various principal officers during 2014.

Technological and social trends are set to significantly influence member demands and behaviour over the next decade. Medical schemes will need expertise to respond to the opportunities and risks created by digital change, changing member behaviour and environmental trends.

Some of the highlights of PwC’s Research paper for medical schemes, 2014: Drivers of change include:

• How technology and social media are shaping healthcare strategies and communication;
• The impact of environmental trends; and
• Economic and socio political developments.

Social media

Social media is already present in the industry in a number of forms and classes. These include online forums where queries, concerns, recommendations and complaints are lodged; micro-blogging platforms such as Twitter; and dedicated social media pages where medical schemes can communicate with their members.

According to the research, only 57% of open schemes have Facebook accounts and 35% have Twitter accounts. More than 80% of the respondents indicated that they regard social media as an important part of their long-term strategy.

Technology

Advances in technology are also transforming the way in which medical schemes operate and communicate with their members. However, the majority of medical schemes still need to develop incentive strategies for the adoption of technological advances. A large proportion of respondents (89%) indicated that they already have certain technological objectives in place. These include: continuous availability – 365 days of the year and 24 hours a day; providing members with a self-help function; and remaining at the forefront of quality applications to improve their members’ experience.

Medical schemes and the environment

Increasingly, the effects of climate change in themselves are starting to pose a threat to medical schemes’ reserves, as lifestyle diseases become the new pandemics faced by healthcare providers. As a result it has become imperative for medical schemes to perform more rigorous stress tests to determine the adequacy of their reserves, given the looming threat of higher claims.

Economic factors

The majority of respondents (90%) stated that they expect their year-on-year premium increases for the next three years will be CPI plus 2% to 3%. An ageing population, linked with an unpredictable cost increase, was found to be the biggest threat to medical schemes’ growth strategies for the next five years. Almost 85% of respondents also indicated that their biggest competitive threat would be a new product offering which was able to demonstrate better value for money to members through a creative and non-traditional benefit design targeted at young and healthy individuals.

Sociopolitical factors

From 2008 to mid-2014 the number of medical schemes in the industry has declined from 112 to 92. Although the number of medical schemes has reduced, membership has grown.

As the public sector prepares itself for the roll-out of National Health Insurance (NHI), participants in the private sector also seek to redefine their business models and processes. It is likely that for open medical schemes, the focus will be to ‘merge and grow’.

Quick Polls

QUESTION

Have you seen insurers implementing rate adjustments / risk management around climate change?

ANSWER

Yes
No
fanews magazine
FAnews June 2024 Get the latest issue of FAnews

This month's headlines

Understanding prescription in claims for professional negligence
Climate change… the single biggest risk facing insurers
Insuring the unpredictable: 2024 global election risks
Financial advice crucial as clients’ Life policy premiums rise sharply
Guiding clients through the Two-Pot Retirement System
There is diversification, and true diversification – choose wisely
Decoding the shift in investment patterns
Subscribe now