Separating medical scheme and administrator brands may cost you

Large medical schemes and their administrators may, in future, have to make it clear which of the two entities you are dealing with. The Council for Medical Schemes this week published a draft notice declaring certain brandsharing practices undesirable.

The intention behind declaring brand-sharing practices undesirable is to ensure that you don’t confuse the administrator and any financial products it offers, with the scheme.

However, if the big administrators or their schemes, such as Discovery Health and Momentum Health, had to change their branding, there would be cost implications for these entities that could be passed on to you, the scheme member.

The draft notice published in the Government Gazette proposes declaring it an undesirable business practice for a medical scheme administrator or any other company to use your medical scheme’s brand or mark in notices, correspondence, advertisements or other communications sent to you, without stating explicitly, in the same size font as the brand or mark, that the communication comes from the administrator or another entity.

Your scheme’s administrator will also not be able to use the same brand or mark as your scheme without using words indicating that it is an administrator, and will not be able to use your scheme’s brand to send you details of products or services the administrator is promoting.

Members’ confusion about whether they are dealing with a medical scheme or its administrator was highlighted at the Competition Commission’s public hearings for the Health Market Inquiry earlier this year. Medical scheme members told the inquiry’s public hearings panel that they were unaware of the difference between their scheme and its administrator and did not know which one was dealing with their complaints. They were also unaware of their right to complain to their scheme about decisions made by the administrator.

The brand confusion was also highlighted in a complaint to the Council for Medical Schemes by Angela Drescher, a medical scheme member who has been assisting consumers enforce their rights (see “Discovery rejects claim of ‘pervasive misinformation’”, on page 1).

The draft notice states that the Registrar of Medical Schemes is concerned that members sign up for products offered by entities within financial services groups on the mistaken understanding that they are being offered by the medical scheme.

Drescher complained about being offered short-term insurance during a call about her medical scheme claim.

Discovery Health Medical Scheme and Discovery Health, its administrator, each said they would be submitting comments on the draft notice, and neither would comment at this stage.

Momentum Health medical scheme principal officer Toni van den Bergh says the scheme already practises the principles the draft declaration aims to promote. She says the scheme continually monitors all communications sent to its members to ensure that any references to nonscheme products appear under the administrator brand, and clearly state that these products are voluntary and not part of the medical scheme’s offering.

Toska Kouskos, the head of employee benefits consulting at financial services consulting group NMG, says it may be possible to distinguish between a scheme and its administrator without a complete overhaul of the brand.

For example, Bonitas may find it easier to change the name of Bonitas Marketing Company rather than the scheme’s strong brand, Kouskos says.

She says it will be more challenging for schemes that operate as a separate legal entity under a much bigger corporate brand, such as Momentum Health and Discovery Health, which have strong ties to the larger insurer.

“The costs associated with such a change could be enormous if you consider the branding and marketing material, the actual member communication and cards, and so on,” Kouskos says.