On the mend

Get­ting back to what schemes used to be about

Finweek English Edition - - Communication & Technology - Dr James Arens SHAUN HAR­RIS

MED­I­CAL SCHEME SAV­INGS ac­counts aren’t do­ing the health of many mem­bers much good. There are nu­mer­ous com­plaints about sav­ings ac­counts con­tin­u­ally hav­ing to fund more ben­e­fits, dry­ing up half­way through the year and leav­ing mem­bers in the lurch, and be­ing an in­ef­fi­cient, of­ten ex­pen­sive, way of hav­ing to fund med­i­cal costs.

It’s an is­sue Fin­week in­tends in­ves­ti­gat­ing fur­ther. How­ever, some med­i­cal schemes seem to be re­al­is­ing that sav­ings ac­counts aren’t what mem­bers want. One is Pro Sano, which last week launched a “back to ba­sics” new prod­uct – ProElite – that of­fers ex­ten­sive com­pre­hen­sive cover. The risk switches back to the med­i­cal scheme, of­fer­ing mem­bers peace of mind, as most med­i­cal costs will be cov­ered out­side the sav­ings ac­count.

New prod­ucts might not be the way to deal with all the com­plaints made about sav­ings ac­counts. It’s an is­sue the in­dus­try will have to look at. But at least Pro Sano is mov­ing in the right di­rec­tion.

“ProElite was in­spired by re­search into our mem­ber­ship base and what our mem­bers need. That was a com­pre­hen­sive prod­uct of­fer­ing sim­ple, easy to un­der­stand cover for ba­sic needs,” says Dr James Arens, clin­i­cal op­er­a­tions ex­ec­u­tive at Pro Sano.

Un­der what the med­i­cal scheme says will be­come its new flag­ship prod­uct, ProElite cov­ers hospi­tal ex­penses at 300% of the Na­tional Health Ref­er­ence Price List rates. That should cover the “short­fall gap” of­ten ex­pe­ri­enced by mem­bers fac­ing high hospi­tal costs. Ad­di­tional day-to-day ben­e­fits are also cov­ered by the scheme, but the new prod­ucts of­fer what Arens calls the “flex­i­bil­ity” of a sav­ings ac­count to main­tain day-to-day out of hospi­tal ex­penses.

“It’s the ideal op­tion for busi­ness ex­ec­u­tives and en­trepreneurs want­ing the peace of mind that while they’re tak­ing care of busi­ness we’re tak­ing care of their med­i­cal bills. It should also suit smaller cor­po­ra­tions and State-owned en­ter­prises looking for com­pre­hen­sive cover for staff,” Arens says.

Pro Sano is un­der cu­ra­tor­ship fol­low­ing se­ri­ous mis­man­age­ment last year. But fi­nan­cially it looks to be on a much bet­ter foot­ing. Arens says the scheme’s re­serves have im­proved to a sol­vency level of nearly 40%, com­fort­ably higher than the pre­scribed min­i­mum 25% re­quired by the Reg­is­trar of Med­i­cal Schemes. The scheme’s loss for the fi­nan­cial year to end-De­cem­ber was re­duced to R11m, com­pared to a loss of R130m in 2006.

Im­por­tantly, mem­ber­ship is grow­ing. Just over a year ago mem­ber­ship was de­clin­ing, but Arens says 4 000 new mem­bers have been wel­comed to the scheme this year, bring­ing to­tal mem­ber­ship to 32 000. “Our rebranding ex­er­cise is also sup­port­ing our strate­gic fo­cus to make mem­ber­ship more na­tional, mov­ing from our pre­dom­i­nant base in the West­ern Cape and to at­tract younger mem­bers to off­set the age­ing mem­ber base. About a third of our new mem­bers are from the Gaut­eng re­gion.”

Cu­ra­tor Joe Se­oloane says that with the scheme be­ing sta­bilised and the mem­ber­ship trend mov­ing up­wards, the fo­cus is on choos­ing the “right trustees” (part of the prob­lem last year). “We’re mak­ing sure trustees com­ply in all ways – for in­stance, in terms of good cor­po­rate gov­er­nance; and Pro Sano’s op­er­a­tional struc­ture has been re­designed to clearly de­mar­cate be­tween ex­ec­u­tive man­age­ment and trustees.” He says, once fi­nalised, it’s up to the Reg­is­trar to ap­ply to the courts for cu­ra­tor­ship to be lifted.

Se­oloane fully sup­ports the prin­ci­ple be­hind the new prod­uct. “Med­i­cal schemes say to mem­bers: it’s your money in the sav­ing ac­count, you han­dle it. As an in­dus­try I think that’s ab­di­cat­ing re­spon­si­bil­ity. Now we’re get­ting back to ba­sics and tak­ing re­spon­si­bil­ity, but also of­fer­ing the flex­i­bil­ity of a sav­ings ac­count.”

As com­pre­hen­sive cover, Arens ad­mits ProElite isn’t “a low-cost prod­uct” but says it of­fers much bet­ter value for money. “There’s no di­rect com­par­i­son to the new prod­uct in the mar­ket. I be­lieve it’s the cost ef­fec­tive op­tion.”

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.