Taking a stand against lacklustre medical schemes

03 November 2014 Andre Jacobs, Gusto Health

Medical scheme members applaud good service with comments such as “excellent” and “good” whilst bad service is lamented with statements such as “incompetent” and “dishonest”.

When complaints are investigated, it is clear that consumers are frustrated by the asymmetry of information where the medical scheme holds all the knowledge. Another area of frustration relates to the feedback in terms of the quality, the speed of the feedback and the empathy of the feedback.

According to research conducted by Peter Cheales, author of ‘I was your customer’, the average South African business, which provides poor to mediocre customer service, loses:

• 30% of clients because of a better or cheaper competitive product elsewhere;
• 20% of clients because the business is disinterested; and
• 49% of clients because of the abysmal quality of service.

Moving towards improvements

The latest annual report of the Council of Medical Schemes (CMS) indicates a 10% drop in complaints and Prescribed Minimum Benefits (PMBs) related complaints dominating complaints.

The reduction in complaints against the growing number of members, as well as a more consumer centric environment, must be approached with concern. More should be done to adjudicate complaints quicker and more efficiently. A complaint is a result of the application of the rules of medical schemes, as well as advice provided to members by brokers in relation to their benefits and rights.

Bonitas receives nearly one positive remark every day of the year, whereas Discovery Health receives nearly one positive remark every workday of the week. On the other hand Fedhealth receives nearly one positive comment every week, whilst Momentum Health receives nearly two and half positive comments every month.

Smaller is better

The medical schemes that lead the pack in terms of the least number of complaints are the smaller medical schemes. The top three medical schemes receive a negative comment every 40 to 90 days. This is a record worthy of these medical schemes’s effort to client service.

It will hold merit to argue that smaller medical schemes have fewer members; therefore they will receive fewer complaints. However, this is not the case and below the number of members per complaint is listed.

A complex beast

Service delivery in the medical scheme market is complex. Services are delivered by an administrator that must have an arms-length relationship with the medical scheme. Fifty percent of the trustees are voted for by members, and these trustees are also tasked with ensuring that members of the scheme are happy and receive good service.

What complicates the matter is that in the open medical scheme market brokers in most cases act as intermediaries between the members and the medical schemes. Brokers can play a pivotal role in ensuring that members obtain good service. However, where members receive bad service, brokers should not remain silent. On the other hand, where the complaints of members are as a result of poor understanding of their benefits, medical schemes should hold brokers accountable.

The role of marketing

Marketing and advertising costs of medical schemes are expenses to retain and attract new people. The gross increase in members was approximately 15% whilst the net growth was only 1%. This indicates that marketing expenses to attract new members are effective, but that existing members are dissatisfied.

The dissatisfaction of members is primarily a result of how they are treated by the medical schemes when they are members. Medical schemes can benefit from instituting an independent self adjudication of service levels to interrogate CMS complaints, Hello Peter complaints and compliments, dispute committee adjudications, internal procedures relating no claims not paid and general trends regarding complaints. Innovation in addressing service levels in medical schemes will drive the new competitive consumer driven relationship based landscape.

The competitive landscape for medical schemes will change away from transactional prices and benefits to a relationship model based on the relationship with the members of the medical scheme. Today's consumers look for the right combination of quality, service, price, convenience and integrity.

Value and the quality of service delivery will remain the primary determinants of the medical scheme’s brand. Medical scheme members now demand added value that comes mainly from the provision of excellent service.

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