Too many fronts in the healthcare battle
Earlier this week FAnews Online attended some of the sessions at the Financial Planning Institute (FPI) 14th Annual Convention. We joined thousands of financial planning delegates who were there to learn about practice management trends and various threat
Is ‘churn’ still costing schemes?
The first problem tackled during the presentation was the Board of Healthcare Funders (BHF) assertion that “churn is expensive to schemes.” They allege that frequent changes from one scheme to another result in brokers being paid additional commissions while medical schemes solvency is detrimentally impacted. While there are undeniable impacts to schemes and scheme administrators there is absolutely no benefit to the brokers for this practice. Brokers are currently paid a monthly amount (capped to around R70) for each member. Edwards poses the question: Why would a broker move a member from one scheme to another in the absence of up-front commission.
The Council for Medical Schemes (CMS) has been very visible in the medical schemes environment of late. And it appears no individual or representative body can escape their attention. They started the year backing the Health Minister as she waged her personal vendetta against private hospital groups. For the last two years they’ve been banging heads with Guardrisk over that group’s innovative ‘gap’ insurance product. They’ve also had plenty to say about the role of brokers.
Stirring the coals – the CMS’s gift to administrators, schemes and brokers
They contend that brokers influence the costs associated with medical schemes in two ways. The first is through the fees paid – and the second as a consequence of the quality of their advice. Edwards included the following bullet point to show how the CMS views brokers in general. “On the whole, brokers do not at present see members as their clients as schemes pay the commissions…” This type of comment is not doing the industry any good.
For the country’s health system to function efficiently we need to create an environment of trust between all the players. Regulators (the CMS), government (the Department of Health), medical schemes, private hospitals and all brokers and intermediaries have to pull together for the benefit of service users.
What a wicked web we weave
The problems raised by the CMS and BHF leave brokers a trifle confused. In summary Edwards noted that brokers have no incentive to churn members, definitely view members as clients and are at pains to provide professional advice as stipulated in the FAIS Act and associated legislation. As for medical scheme administrators, Edwards pointed out that the administrators made and implemented decisions independent of brokers.
We think the problems outlined and discussed in this forum demonstrate that the many players in the medical services industry are too focused on protecting their interests over the interests of brokers and the bottom-line medical scheme members. Solving the problem is not going to be easy; but what we suggest is that each industry player focuses on their area rather than meddling in the realms of others. So, for instance, the Minister of Health should focus on ensuring an efficient public health services. The CMS should focus on issues of regulation and regulatory compliance. And the Board of Healthcare Funders should focus on ensuring the survival of the private healthcare sector. It makes no sense for these bodies to ally with one another on critical issues because their stakeholders are wildly divergent.
Editor’s thoughts:
Recent developments in the medical industry leave us wondering whether the various industry bodies have lost the plot. It might be time for them to re-evaluate their strategies and put the medical consumer first. What is the most pressing issue facing the South African medical industry right now? Send your comments to [email protected], or respond below.
