Medical aid schemes in poor health — council

Worsening claims ratios and climbing healthcare costs have resulted in SA’s medical aid schemes facing a multimillionrand deficit, the Council of Medical Schemes (CMS) 2016 annual report showed last week.

The council regulates 82 schemes including a total of 22 open schemes and 60 restricted schemes. The private healthcare system provides services for about 16% of the population.

The CMS report revealed that nearly 62% of the restricted schemes had a R1.435bn deficit, while 78.3% of the open schemes incurred a total deficit of R955.7m, up from R539.6m in 2015. The net healthcare result for all medical schemes combined reflected a deficit of R2.391bn in 2016.

Even though membership numbers grew slightly by 0.78%, giving the industry a total of 8.879-million members as at December 31 2016, the report said the deepening deficits were mainly due to the increased claims ratios of all schemes rising from 91.4% in 2015, to 92.1% in 2016. Schemes were able to collect R163.9bn in contributions as at end-December 2016, but this was undercut by a gross healthcare expenditure of R151.2bn. Healthcare benefits, which medical schemes covered from their risk pools, amounted to R135.98bn in 2016.

The total gross relevant healthcare expenditure incurred per average beneficiary per month increased by 7.9% to R1,423, from R1,319 in 2015. Outgoing council chairman Prof Emeritus Yosuf Veriava said the main contributors to healthcare costs were private hospitals, specialists and medicines.

Spending on private hospitals rose to R56.32bn in 2016, while specialists and medicines amounted to R36.32bn and R23.95bn, respectively.

“The prescribed minimum benefits remain a concern in the industry and constituted 54% of the total risk benefits paid.”