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THE operating environment for the medical aid industry has been characterised by escalating costs of healthcare services, which are in turn affecting the accessibility and long long-term viability of medical insurance.

The triadic nature of the industry, that is, the medical aid society, service provider and client, means that at any point, two members of the triad are in contact, without the presence of the other member.

This set-up requires a high level trust. While medical aid societies have been regularly reviewing products, benefits and contributions in a bid to balance affordability and accessibility, the service provider has become disgruntled by failure of the medical aid to pay for services rendered. This has been worsened by the volatile economy that has seen inflation escalating in the last few years. The medical insurance market has remained stagnant at about 1,5 million people, if not shrinking. The cake has definitely shrunken with a good number of organisations failing to remit funds to their respective medical aid societies.

What has ensued is a battle for survival. In austere conditions, good faith and trust evaporate, leading to a breakdown of the triadic set-up in the healthcare industry.

The shrinking formal sector coupled with poor organisation of the informal sector on top of medical aid societies’ reluctance to sign up new individuals because of perceived adverse selection risk of some age groups, has thus kept the figure of the insured at about 9% of the population, leaving about 91% uninsured.

There has been a lot of fingerpointing, with medical aid societies raising their grievances against service providers. The service providers have often blamed the medical aid societies of failing to honour their side of the deal.