“Good health and good sense are two of life’s great­est bless­ings,” Publil­ius Syrus once said.

The Mercury - - METRO - Grace Khoza Grace Khoza is Gen­eral Man­ager for Stake­holder Re­la­tions at the Coun­cil for Med­i­cal Schemes, the reg­u­la­tor of the med­i­cal schemes in­dus­try.

Syrus, a Syr­ian, was brought as a slave to Italy, but, by his wit and ta­lent, won the favour of his mas­ter who freed and ed­u­cated him. It is worth keep­ing his wis­dom in mind as we strive to use good sense to en­sure the good health of South Africans. Key to this is creat­ing the kind of en­vi­ron­ment that en­sures a healthy part­ner­ship be­tween pri­vate pa­tients and med­i­cal schemes. When­ever med­i­cal schemes an­nounce their fee struc­tures at this time of the year - with in­creases in some in­stances at rates higher than in­fla­tion - there are of­ten com­plaints that mem­bers are get­ting less for their money than be­fore.

With in­creas­ing costs, caused both by in­fla­tion and the ris­ing costs of doc­tors, hospi­tals and medicines, med­i­cal scheme con­tri­bu­tions have be­come more and more ex­pen­sive and scheme have got to work hard to demon­strate that they re­ally do add value.

Con­tri­bu­tion in­creases dif­fer from one med­i­cal scheme to an­other, based on is­sues such as the med­i­cal scheme’s sol­vency ra­tio, risk pro­file, claims ra­tio, as well as the util­i­sa­tion of ben­e­fits.


So what ac­tu­ally goes into the con­tri­bu­tion in­crease? Con­sumer Price In­dex (CPI), an in­crease in peo­ple with chronic, life­style dis­eases and health in­fra­struc­ture costs are all con­trib­u­tors, amongst oth­ers.

In the past fi­nan­cial year, med­i­cal schemes spent R160.6 bil­lion on health­care ben­e­fits, an in­crease of 6.04% from R151.2 bil­lion in 2016. The bulk of med­i­cal schemes ex­pen­di­ture con­tin­ued to be dom­i­nated by hospi­tals, spe­cial­ists and medicines with pri­vate hospi­tals re­spon­si­ble for R58.9 bil­lion com­pared to R56.3 bil­lion dur­ing the pre­vi­ous year; the ex­pen­di­ture on all spe­cial­ists was R38.5 bil­lion com­pared to R36.3 bil­lion spent on all spe­cial­ists in 2016; costs on medicines dis­pensed was R25.8 bil­lion com­pared to R24.0 bil­lion a year ear­lier and ex­pen­di­ture on gen­eral prac­ti­tion­ers (GPs) was R9.1 bil­lion com­pared to R9.0 bil­lion in 2016;

This in­creases in con­tri­bu­tions for for all med­i­cal schemes in 2018 of 7.2%. This in­crease is, how­ever, lower than the over­all in­crease in 2017 which amounted to 11.3%, which had a sig­nif­i­cant im­pact on mem­bers pock­ets.


For 2019, we at the Coun­cil for Med­i­cal Schemes (CMS), an au­ton­o­mous statu­tory body cre­ated by par­lia­ment to reg­u­late med­i­cal schemes is­sued guid­ance that the in­creases in costs should be no more than 5.4%, which is based on the ex­pected in­crease in CPI for 2019

How does the CMS ar­rive at 5.4%? An­nu­ally, we re­ceive and ap­prove ap­pli­ca­tions for con­tri­bu­tion in­creases from the var­i­ous med­i­cal schemes. The reg­u­la­tor takes into con­sid­er­a­tion var­i­ous el­e­ments be­fore an ap­pli­ca­tion for con­tri­bu­tion in­crease for spe­cific ben­e­fit op­tions are ap­proved. These in­clude is­sues such as the trends in terms of util­i­sa­tion and claims ex­pe­ri­ence for the scheme, as well as the im­pact that the in­crease is likely to have on mem­bers.

We use the CPI as a proxy mea­sure for the af­ford­abil­ity of med­i­cal scheme con­tri­bu­tions al­though the in­creases are based on the in­crease in fees by hospi­tals and doc­tors and the amount of ben­e­fits that are used by mem­bers of schemes. Con­tri­bu­tion in­creases are gen­er­ally higher than CPI and salary in­creases due to this and it is there­fore a cause for con­cern as it makes med­i­cal schemes un­af­ford­able for most mem­bers of the work­ing class. We also mon­i­tor costs in­curred in run­ning of the med­i­cal schemes, in­clud­ing non-health­care costs. For ex­am­ple, in gen­eral, hospi­tal costs con­sti­tute a sig­nif­i­cant por­tion of med­i­cal schemes ex­pen­di­ture. Also, ex­pen­di­ture on spe­cial­ists con­tin­ues to be one of the key cost driv­ers of health­care costs. In essence, this is a sig­nif­i­cant con­trib­u­tor for the con­tin­ued med­i­cal con­tri­bu­tion in­creases at rates higher than CPI.

While med­i­cal schemes are re­quired by law to in­form mem­bers in ad­vance of any im­pend­ing changes, mem­bers must note that all amend­ments re­lated to the con­tri­bu­tions and ben­e­fits, which are mar­keted and com­mu­ni­cated by med­i­cal schemes, are only valid upon ap­proval and reg­is­tra­tion by the CMS.


In spite of above rec­om­mended av­er­age in­creases, med­i­cal schemes are mak­ing an ef­fort to lessen the fi­nan­cial bur­den of mem­bers. For ex­am­ple, there has been an in­crease in the use of the Ef­fi­ciency Dis­count Ben­e­fit Op­tions (EDOs). The EDOs are struc­tured in such a way that they of­fer a choice of a net­work of ser­vice providers with whom the med­i­cal scheme has ne­go­ti­ated tar­iffs for ser­vices. For the du­ra­tion of the year, a med­i­cal scheme mem­ber who has opted for an EDO op­tion only uses the ser­vices of the providers that are part of the net­work. Dur­ing this pe­riod, mem­bers pay a dis­counted con­tri­bu­tion as a re­sult of the ar­range­ments that are in place be­tween the scheme and the ser­vice providers. Mem­bers will find it worth­while to en­quire from their schemes re­gard­ing the EDOs and, as a re­sult, make a sig­nif­i­cant sav­ing in monthly con­tri­bu­tions.


En­sur­ing med­i­cal aid in­creases are within a rec­om­mended range does not fall solely on the shoul­ders of the med­i­cal schemes. So what more can we all do to keep health costs down?

ing to the rates that schemes pay, as pa­tients; must push for this to hap­pen. It makes care so much sim­pler for all of us and bet­ter for the schemes;

healthy and dan­ger­ous life­style be­hav­iours;

ven­tive care ben­e­fits, as be­ing in­formed on our health sta­tus can help man­age and re­duce the in­ci­dence of dis­ease and Let us all work to­gether as con­sumers, doc­tors and other health care providers, hospi­tals, em­ploy­ers, gov­ern­ment and schemes, to en­sure that med­i­cal scheme con­tri­bu­tions do not keep in­creas­ing ahead of in­fla­tion and wage in­creases.

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