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Innovation and flexibility reshape private healthcare

01 November 2012 Damian McHugh, Momentum Health

Private healthcare provision is under the spotlight due to inflation-plus annual increases in medical scheme premiums. And although there are numerous factors contributing to spiralling healthcare costs, both regulators and consumers are turning to medical schemes to manage the situation.

South Africa’s private medical schemes are hard at work to ensure a sustainable healthcare environment. The long-term financial soundness of the sector hinges on their ability to meet members’ claims while at the same time building a more favourable member age profile.

Life-stages in medical aid

Attracting members of the preferred "age” requires on-going innovation. For example: A father in his early forties with a wife and two children is content with an affordable hospital plan with some day-to-day benefits… In contrast, attracting a single 22 year old, starting out in his or her first job, requires a medical aid with extensive and customisable lifestyle-linked rewards.

This is not as simple to deliver as it may seem. Remember, medical schemes are not allowed to discriminate on the basis of a prospective member’s age, nor are they allowed to offer incentives or lower contributions based on age and health status. Stakeholders in the South African healthcare space have met these challenges by way of extensive product innovation.

Rewards and incentives

South Africa’s largest open medical schemes – including the likes of Momentum and Discovery – have packaged offerings that allow members to achieve savings or additional benefits in combination with their medical aid membership.

Another popular innovation is the provision of complementary savings products to enhance the level of savings offered through traditional medical scheme savings accounts. These products allow members to increase (or reduce) their level of day-to-day spending, based on their changing needs, without having to change their medical schemes benefit options. The savings product includes an optional credit facility for consumers who require further flexibility.

Saving through smart choices

Offering add-on products that are seamlessly integrated to consumers’ medical aids is just one example of scheme innovation. Another innovation empowers consumers to reduce their monthly premiums. Medical aids with provider choice models make it possible for members to save as much as 35% on their contributions over time.

Thus, in broad terms, by choosing to use a specific network provider for non-emergency medical treatment, a member can save a considerable amount on their medical cover every month.

Deploying new technology

The industry is also acutely aware of the role technology plays in meeting the demands of an evolving marketplace. In a country where even low-income earners are proud owners of smartphones, medical scheme members can now interact with their scheme via mobisites (or websites customised for mobile phones and tablets).

Nowadays scheme members can use their smartphone to find the doctor closest to them, view claims, request authorisations or view information relating to their benefit option. It is almost impossible to compare this convenience with the medical schemes of old, where a claims query often took weeks to resolve. The 21st Century consumer is in the proverbial pound seats!

From days to just hours

Turnaround times are as quick as a few hours for general queries, while schemes conduct on-going polls to determine their success in meeting member expectations and servicing their needs. In fact, the leading schemes do not tolerate customer satisfaction ratings of below 90%.

The industry has improved markedly over the past decade. As the number of open medical schemes continues to decline, clients will seek out those schemes that offer the most innovative product.

Best fit for member needs

To stay ahead of the "game” schemes will have to offer flexible product that addresses the needs of the individual. Over time the schemes that meet the "best fit for your unique needs” tagline will emerge triumphant.

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