Access to quality healthcare remains a priority for South Africans. However, with healthcare costs consistently outpacing inflation, the challenge for private medical schemes remains finding the right balance between providing a high level of value and care for members, while managing costs effectively.
‘There are many reasons for the high cost of medical inflation.’ says Lee Callakoppen, Principal Officer of Bonitas Medical Fund. These include:
- The pricing of healthcare services not being regulated
- Regulation uncertainty
- An ageing membership
- High hospital tariffs
- Lifestyle diseases
Callakoppen says, ‘Our main focus is to understand the cost trends at any particular time and the drivers of these costs. From there we implement strategies to help provide better value that adheres to regulation, satisfies our members while remunerating healthcare providers for services rendered.’
An overview of private medial aids
According to the latest annual report from the Council of Medical Schemes (CMS) there are around 8.9 million South Africans (around 20%) on registered private medical aid schemes. ‘We believe that in the current market, it is important for schemes to understand how members are impacted by economic and social factors and respond accordingly. Education, awareness and communication with members around their benefits and preventive healthcare measures is critical.’
The rise of lifestyle related diseases, the combined cost of treatment innovations and increased longevity has also added to the high cost of healthcare. ‘Part of our strategy is to partner with service providers to focus on early detection, prevention and monitoring of chronic conditions. Our improved diabetes programme is a good example. Many people are pre-diabetic but through the programme are encouraged to change their lifestyle and visit the doctor regularly to prevent them from becoming full-fledged diabetics. Currently there are 14 888 beneficiaries on the programme,’ says Callakoppen.
Other programmes from Bonitas are for active disease risk management of lifestyle diseases, such as high blood pressure and cholesterol, as well as for mental health and back and neck pain.
The Scheme is also committed to keeping costs down through the cost effective management of member’s benefits for both acute and chronic medicines in order to ensure sustainable healthcare. 169 008 beneficiaries are registered to receive chronic medication every month. Bonitas offers a home delivery service, which helps to ensure that medicines are taken in compliance with the treatment plans, improve member education on their chronic conditions and allow for convenience for members. Pharmacy networks and medicine formularies are maintained and, where possible, generic medication is recommended and prescribed.
In addition to Managed Care interventions, the upskilling of family practitioners and partnering with quality service providers are all critical in the Bonitas journey of education and awareness. The aim: To improve the quality of healthcare and the associated cost drivers.
Fraud Waste and Abuse (FWA)
‘Not many people are aware of the fact that, by law, medical schemes are non-profit trusts. They are owned by their members whose contributions are pooled and used to pay relevant medical costs where necessary, while keeping a legislated surplus of 25% to prevent the scheme from collapsing,’ explains Callakoppen. ‘It’s important for members to understand this and the impact of other cost influences such as fraud, waste and abuse. We are working hard to raise awareness and educate members on what constitutes fraud, waste and abuse to reduce the impact it has on the industry.’
Empowering the member
Callakoppen says the current environment requires a multi-pronged approach which includes rigorous engagement with services providers around the value of services as well as a common agreement around Managed Care protocols. ‘Member empowerment on understanding the healthcare service value chain is of utmost importance. At the end of the day the funds belong to the members so it’s important for them to fully comprehend the services offered and the associated costs. This means medical aids need to make information easier to understand in terms of the various plans and benefits on offer as well as the costs associated with these services and T&Cs.’
The challenge for private medical schemes is to ensure that benefits are designed in the best interests of the members. Secondly, it is to manage the healthcare risks of the scheme in a responsible manner to ensure future sustainability. Medical schemes need to provide quality healthcare at affordable prices.
Value add for members
Our mandate is to act in the best interest of members. We, therefore, strive to offer value and accessibility to quality healthcare that improves lives. We work hard to achieve this with a diversified product offering, a wide range of additional benefits, paid from risk, in addition to savings and day-to-day benefits and managed care programmes that will improve the quality of life for a member and their loved ones.
‘We believe the Fund cannot simply sit back and say that high costs are externally influenced and beyond our control. We need to continue to be proactive in finding new and innovative solutions to contain certain costs. It goes back to us delivering on our mandate.’