OXYGEN would save R1.2 million a month in administration and managed-care costs, James van Vught, the medical aid's principal officer, said yesterday.
The savings will come from using administrator Medscheme for these services, which Oxygen will join next month, replacing Old Mutual.
For competitive reasons Van Vught would not say how much it would pay Medscheme compared with Old Mutual, but Oxygen wanted the best deal from both a value and price perspective.
"The quality of administration services deteriorated over time at Old Mutual," said Van Vught. Because this was Medscheme's core business, it had "created efficiencies and used technology to create a one-stop approach to improve the member's experience".
Oxygen is the fifth-largest open scheme in South Africa after Discovery, Bonitas, Medshield and Medihelp.
Van Vught said the number of queries from members had escalated, with some complaining that claims had not been paid for three months.
The scheme currently has 65 000 principal members and 135 000 lives covered.
Van Vught said the company wanted to grow this to 78 000 principal members by December next year.
"We will keep the 'pay for one child and the rest are free' offering as an attraction and using family as the cornerstone of our growth," he said.
Last year turnover was R1.5 billion. Turnover for the current year is predicted to drop to R1.4bn.
Van Vught attributed the decline to at least 10 000 members leaving the scheme to join the Government Employees Medical Scheme. Others had given up medical aid schemes due to the economic recession.
He said the survival of private funders was in jeopardy due to the proposed national health insurance, which seeks to give cover for every citizen.
He said the government should find another way to ensure everyone accessed quality health care rather than eliminate a system "that is working".