Healthcare affordability: The balance between cover and cost

When a balance between cover and cost is achieved, members of a medical scheme experience value-for-money.

Affordability in the healthcare industry should be seen as a balance between the level of medical cover desired and the amount of money available to pay for that cover. When this balance is achieved, a member of a medical scheme experiences value-for-money.

In general, the monthly premium of a benefit option increases as the cover of that option becomes more comprehensive. It is therefore important for a member to choose a benefit option that suits his or her specific needs, and financial advisors play a crucial role in assisting members to make these choices.

“For example, choosing a comprehensive option when it is not needed, simply means that the member is paying for services he or she may not use. This influences the value-for-money balance,” explains Anton Rijnen, Principal Officer and CEO of Medihelp, South Africa’s third largest open scheme.

Conversely, choosing an option simply because it is the least expensive may result in members not having access to services that they do require. Again, this will influence the value-for-money balance.

The fundamentals

For a medical scheme to be in a position to offer value-for-money options, it has to have its fundamentals in place. These include its financial standing, membership growth and service delivery. Brand awareness, claims-paying ability, and reputation as an employer are also important factors.

“Because there is little difference between the basic offerings of benefit options, client service is increasingly becoming one of the distinguishing factors when it comes to choosing a medical scheme. The challenge is to sustain excellent client service in the long run,” says Rijnen. “In addition, an integral part of the service offering is a scheme’s ability to process claims fast and efficiently. A strong brand position is also important, but to t achieve balance, one has to look after the most important asset of any company, its people. Without them, nothing would be possible.”

Rijnen notes that it is crucial that all staff members are fully informed about where the Scheme is heading and how they are going to get there. They should also know in detail what their respective roles in the process as a whole will be.

Creating an experience

“Ultimately, value-for-money relates to the whole experience a member has with a medical scheme, and not only to the cost of a specific benefit option,” says Rijnen. “A medical scheme has to perform on all fronts to ensure that a member is satisfied that he or she receives value for their monthly contributions. Last but not least, a medical scheme must be able to sustain its overall service to the client.