On the mend
Getting back to what schemes used to be about
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.”