THE GAP between what customers expected from their medical schemes and what they perceive to receive in return for their premiums has seen medical schemes’ customer satisfaction and loyalty of members decline to a six-year low.
This is according to the latest South African Customer Satisfaction Index (SA-csi) for Medical Schemes (2021) conducted by Consulta. The index provides scientific insights into the overall satisfaction of members of South Africa’s largest open medical scheme providers (by membership numbers) – Bestmed, Bonitas, Discovery, Medihelp, and Momentum.
GEMS is the only closed medical scheme included in the survey. Consulta polled 1 950 medical scheme members during the first half of this year.
In the recent index, Bestmed emerges as the leader on overall customer satisfaction, with all other schemes performing on or below industry par.
In the Customer Satisfaction – Overall Index Bestmed emerged as the leader at 76.7 and above the industry par (73.5).
Bonitas was at 73.7, Discovery at 73.7 and Medihelp at 72.3 come in on industry par of 73.5. GEMS at 69.4 and Momentum at 69.9 were below par.
All medical schemes showed a decline in customer satisfaction scores compared with last year. The least satisfied customers remained those with low to minimal benefit utilisation and who faced co-payments and out-of-pocket expenses on day-to-day primary healthcare needs and chronic medication. Members on network plans at 71 and hospital plans at 72.5 were less satisfied than those on comprehensive plans at 75.5.
The authors of the index said the pandemic had brought no reprieve for medical schemes, even with heightened consumer consciousness of the need for access to private, quality healthcare and the role that medical scheme membership plays in providing such access. The overall customer satisfaction of members of South Africa’s largest medical schemes has sharply declined in 2021, and some have recorded their lowest customer loyalty scores over a six-year period.
Consulta Head of Customer Insights Ineke Prinsloo said as medical schemes entered renewal season in October when they announced benefit changes and premium increases for next year, the findings of the latest index were significant.
“With customer satisfaction levels and loyalty scores at one of their lowest points in years, and with consumer price tolerance at equally low levels, there’s likely to be significant shifts of members to lower cost-benefit plans and between medical schemes as customers try to balance value, quality, necessity and affordability,” said Prinsloo.
What was notable, was that the customer expectation was not adjusted commensurate to the buying down in benefits.
“Members will look for cheaper options, but they don’t ‘buy down’ on their expectations. And this is where the incongruence with medical schemes increases. The impact of the pandemic on household income looms larger than ever, and as reluctant as members are to cut their medical scheme contributions, many have no other recourse. The decline in customer expectations of their medical schemes in the latest index is also a worrying trend. Lower expectations should not be misinterpreted as a positive outcome, as a decline in this metric is typically the driver of drops in all other metrics of customer satisfaction including overall quality (perceived by the customer), meeting their needs and reliability,” she said.
Prinsloo said this drop in expectations could be a precursor to more significant numbers of people opting out entirely or downgrading their benefits to basic core plans in the coming months, as they did not perceive their current use as meeting their requirements or being reliable in their time of need meaning a definite disjoint between quality and value versus price paid.
“This trend of downgrading (or opting out) is already putting the funding model of medical schemes under pressure. Medical schemes operate on the principle of ‘social solidarity’ where all members within a scheme contribute equally to a pool of funds, whether young and healthy or elderly and sickly, expecting that they will all derive equal utility value from the scheme.
“The latest index shows that the healthy and younger members with lower or even minimal benefit utilisation are least satisfied and loyal. Without focused intervention from medical schemes to address the drivers of customer satisfaction in this key demographic, medical schemes will soon find that the pool of funds to subsidise older, less healthy, higher utilisation members is shrinking, bringing the sustainability of the entire private healthcare funding model into question,” said Prinsloo.
Consulta said South Africa’s regulatory framework for the private healthcare sector also held significant implications for customer satisfaction, with very few consumers having a grasp of the inner workings of private healthcare funding models. Private healthcare costs from 2000 to 2012 doubled in real terms, and by 2028, they would have doubled again on the current trajectory.
It said medical schemes carried the bulk of these costs, and unlike the pharmaceutical industry, there was no pricing regulation on healthcare provider tariffs. In the case of prescribed minimum benefits (PMBs) – a list of conditions stipulated by the Medical Schemes Act that all medical schemes must cover at cost – it meant that medical schemes have to pay these tariffs no matter what the healthcare provider charges.
With South Africa facing a dire shortage of healthcare professionals, this also meant that most providers charge at rates way above inflation and way above what was sustainable for medical schemes or consumers. To manage these hyperinflationary costs, medical schemes had established provider networks and capped the benefits that members can claim for on lower cost options (outside of PMBs).
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