CEO and registrar for the council of medical schemes Monwabisi Gantsho, address the media during a press briefing at Centurion.
Picture: Itumeleng English
791 03.09.2013 CEO and registrar for the council of medical schemes Monwabisi Gantsho, address the media during a press briefing at Centurion. Picture: Itumeleng English

Staggering cost of SA’s ill middle class

By VUYO MKIZE Time of article published Sep 4, 2013

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Johannesburg - Escalating private hospitalisation as well as medical specialist fees continue to make up a large chunk of medical scheme expenditure - costing members more in contributions.

The Council for Medical Schemes released its annual report for the 2012/13 financial year on Tuesday.

The report revealed that in the 2012 financial year, medical schemes received a total of R117.5 billion in gross income contribution.

Of that, expenditure on private hospitals accounted for R37.6bn, an increase of 11.1 percent from 2011, and payment to medical specialists was R24bn - a year-on-year increase of 12.9 percent.

“The fees of private hospitals and specialists must be urgently regulated if we want to contain this,” chief executive and registrar of the council, Dr Monwabisi Gantsho, said during the briefing in Centurion on Tuesday.

Every year, according to the report, the council analyses assumptions that medical schemes had used to arrive at their respective contribution increases for a particular benefit year.

Cost assumptions that are used to arrive at contribution increases take into account the tariff portion (as negotiated by the schemes and healthcare providers), the changes in beneficiary demographics and the use of health-care services.

The council advised medical schemes to limit the cost-increase assumptions for the 2013 benefit year to 6 percent for each healthcare cost driver, including private hospital fees, specialist costs and administration fees.

However, the average gross contribution increase for all medical schemes this year was 9.7 percent.

The report also showed that while there was a decrease in the number of medical aids registered in the country as a result of amalgamations and liquidations, from 97 in 2011 to 92 at the end of last year, the number of beneficiaries had grown by 1.8 percent to 8 679 473 members at the end of last year from 8 526 409 in 2011.

Gantsho said the industry remained financially healthy overall and members were, in broad terms, “safe” as the industry’s solvency ratio stayed above the minimum 25 percent ratio, with an average ratio of 32.6 percent.

For the first time in 13 years, the council recorded a drop in the number of complaints received, by more than 200, compared to other financial years.

The report says it received 5 915 complaints in the 2012/13 year, compared to the 6 138 in the previous reporting period.

Gantsho attributed this decline to many schemes supplementing their communication with their members and having their own accredited regulators who resolved more disputes at scheme level before turning to the council.

“This means that, as a member, you are protected, and with more schemes placing the numbers of their regulators at the backs of the membership cards, they are telling their members that the first port of call is to the scheme.

“I’m very encouraged by this,” he added.

The council noted in the report that more complaints were received about the manner in which medical schemes paid for prescribed minimum benefits than any other complaint category.

The report says a total of 2 411 complaints fell inside the prescribed minimum benefits category in the year under review.

Of these, 592 related to non-payment of prescribed minimum benefits claims and 1 814 dealt with the payment of claims relating to services rendered for prescribed minimum benefits claims.

The highest sub-category under prescribed minimum benefits (846 complaints), related to instances during which schemes incorrectly funded prescribed minimum benefits claims at their respective scheme rates and not in full, leaving members to foot the balance of the bill.

Gantsho said the prescribed minimum benefits stand had to be protected and strengthened in order to serve beneficiaries and the health system.

He added: “Non-compliance with (prescribed minimum benefits) provisions in the Medical Schemes Act undermines the effectiveness and long-term sustainability of the medical schemes industry and, consequently, threatened to undermine the national healthcare system, both public and private.”

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The Star

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