Since the introduction of prescribed minimum benefits for medical aids under the Medical Schemes Act, one of the factors achieved by Government, perhaps even unintentionally has been the leveling of the playing fields in which medical schemes operate.
The purpose of these benefits was to ensure that all members receive a minimum level of hospitalization and related cover for a range of about 270 diagnosed conditions. Schemes are compelled to make payment provided members received treatment for one or other of these conditions in a medical facility which is part of network provided for in terms of the rules of the particular scheme to which one belongs. Now most schemes choose the state hospital facilities as their network.
Additionally, every medical scheme has to include this range of benefits within every single option which the scheme has registered. This has been further supplemented by the inclusion within the prescribed minimum benefit (PMB) ambit of 27 chronic conditions inclusive of the medication prescribed and the practitioner treatment given.
Up to the present time, medical schemes have drawn their members from the more economically advantaged of South Africa’s citizens although within the next few years it is the intention of the Health Ministry to ensure that the vast majority of South Africans have access to affordable scheme membership. Factor into the equation the fact that many members of schemes will do anything to avoid going to State hospitals together with the increasing tendency for members to seek out less costly alternatives in the way of medical cover, and one can understand one of the reasons for the creation of private wards with excellent facilities within the State hospital framework; not to mention the fact that the State is able to have a source of income that was not previously available to it.
Other networks have sprung up countrywide such as Mediclinic and Primecure, and they tend to offer an increasing range of day-to-day benefits at costs which are far more acceptable to the medical scheme movement and therefore the member community who will reap the benefit of less costly premiums over the next year or two. These networks could also be used by schemes for their PMB but it seems that the least costly provider is the Government itself. Bear in mind that it is the intention to spread the country’s medical costs over the private sector, as far as possible, and to the same extent save on subsidies to the State facilities.
A further plan is to try and spread the claims risk over the entire medical aid movement by introducing a basis of cross-subsidy through the creation of an equalization reserve. This will have to be based on various factors such as the age of members and the number and type of chronic medication users within each scheme. One has to be hopeful that the cost of implementing this structure and thereafter maintaining it will not be prohibitively expensive to the extent that it might negate the more positive aspects of socialisation techniques employed.
The above article was provided by IHS, a medical aids broker in South Africa.
