News

FOCUSED APPROACH MAKES SELFMED HIGHLY COMPETITIVE

One of the many factors contributing to medical expenses in 2006 was an emerging trend towards an increase in hospital-related claims. Therefore 2006 was in general quite an expensive year for South Africa's medical scheme industry.

"The trend to claim more can, in itself, be attributed to more than one cause, but research squarely lays the blame at the feet of an aging medical scheme population," said Marthie Bester, marketing director of Selfmed Medical Scheme.

One private hospital group last year reported in Personal Finance that the aging medical scheme population has led to an increase in the average age of patients being admitted to the group.

Between 2001 and 2005 the proportion of admissions in the 16- to 35-year-old band decreased from 30% to 26.4%, while the proportion older than 60 years increased from 16.9% to 20.3%.

Effectively, since the older age group's average cost per admission is approximately double that of the younger group, the desirable cross-subsidy by the young and healthy to the old and sick has deteriorated, contributing to higher per capita healthcare costs within the medical scheme population.

Another private hospital group's hospital expenditure growth, as a result of higher utilisation, showed an increase of 17% between 1998 and 2005. It continued right into 2006 and will probably continue to follow this trend for the next couple of years.

Hospital therefore have had to raise their tariffs as they themselves, in the process, acquired higher costs per admission.

Bester explained: "For medical schemes, this has meant an increase in claims received and paid out, making 2006 an expensive year.

"It left schemes with little choice other than to seriously readjust the benefits on some of their options for 2007. Selfmed recognised this as an opportunity to better align the needs of the scheme's members to its benefit options," she added.

According to Bester, the process of aligning Selfmed's benefit options to the needs of its members was undertaken by keeping in mind the principles of affordability, comprehensibility and reliability.

"We believe that our adjusted product range for 2007 is still very competitive with regards to benefits versus cost.

"We were able to communicate all changes with our members in time for them to make informed decisions where adjustments were needed," Bester said.

Another benefit these changes have brought about for Selfmed and its members is that the scheme could position itself, at an early stage, to meet the anticipated changes that will most probably flow from the Medical Schemes Act.

"We've already incorporated the expected changes so that the impact on our members will be minimal should the time for implementation be legislated.

"In addition, Selfmed has an exceptionally strong financial position as our reserve level has already exceeded 50%. It therefore surpasses the legislated 25%, reserve level requirement by far.

"There are very few schemes that can boast this kind of reserve level. It serves to illustrate that Selfmed can remain competitive, is sustainable and provides security in terms of paying out claims quickly and efficiently," Bester said.

Selfmed, however, does not only differentiate itself through the competitive product range it offers and its financial security. The scheme has also become renowned for exceptional service levels.

"We have a very focused approach to good service. Healthcare cover is already a grudge purchase. We realise that dealing with payments and administrative issues, which resulted from often highly emotional events, is never a joy.

"We therefore aim to enhance all interactions we have with our members in order to make them a more positive experience, and that is our real differentiator," said Bester.

While medical inflation will continue to be a problem for everyone - not only the purchasers of healthcare cover - it is good to know that schemes like Selfmed approach the changes offered by market variables, such as increases in claims, proactively. It's a solution that brings peace of mind with a personal touch.