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THE SKY IS THE LIMIT FOR NEW MEDICAL SCHEME GIANT, KEYHEALTH

Often misunderstood, medical schemes do not possess the illusive never-ending pot of gold, nor do they have control of the illusive rainbows to show them where the pot of gold is, says brand new medical scheme giant, KeyHealth.

The result of a merger between the biggest local government medical scheme, Munimed, and its equally successful counterpart, Global Health - both who also served a sizeable open market - KeyHealth was launched late last year after receiving the thumbs-up from the Registrar of Medical Schemes in negotiations that lasted almost two years.

KeyHealth officially opened its doors to its 150 000 local government and open market clients on 1 January this year. It offers a service blessed with an abundance of management skills and checks and balances to ensure an exceptional medical scheme experience.

With a combined 80 years of experience, it is difficult to say what heights KeyHealth is set to rise to. In the case of the new giant is is certainly a matter of the sky being the limit. In the words of KeyHealth's Peter Sharman "We will become a force to be reckoned with. We are now the biggest medical scheme serving local government and we are also a sizeable player in the open market."

For some time now, these has been talk of the forthcoming amalgamation of two big medical aid schemes, which serve both local government and the open market. This amalgamation resulted in a scheme serving the various sectors.

In 2006, Multimed, the administrator of Munimed, became part of the Momentum Group after it acquired the entire shareholding of African Life Health. African Life Health in turn owned Amanzi Health Administrators, the administrators of Global Health and the University of KwaZulu-Natal medical schemes, as well as IngweMed that administered Ingwe  Health Plan.

in order to realise the full benefit from this decision, an administration integration project was launched at the beginning of last year to integrate Ingwe, Amanzi and Multimed into a single branded medical scheme administration company that complemented Momentum's healthcare strategy. This resulted in a streamlined administrator utilising the best practices that have been developed over past years to ensure even more cost-effective service delivery to members and service providers. The companies already used a common IT system and made use of a central infrastructure, including tested backup and disaster recovery procedures as required by the Council for Medical Schemes. The administrator retained the certification of its quality management systems by the South African Bureau of Standards to ensure that both administration and project management systems remained fully compliant with the international ISO 9001:2000 standards. This independent benchmark certified the processes that the new entity employs to deliver its services - in other words - the way it performs its work and meets the customers' requirements.

Said Dr Herc Hoffman, managing director of Multimed: "We believe this process will result in the envisaged objectives of consolidation being fulfilled by competing on the basis of cost, efficiency and quality in the marketplace. It will reduce non-medical expenses, healthcare will be managed more effectively and provider networks and price negotiations will improve. Furthermore, administrative complexity will be reduced and so will costs through an improvement of economies of scale."

The amalgamation of Munimed and Global Health into KeyHealth has had no effect on the Munimed and Global Health members' positions. In all, it was not a new scheme started, it was merely formed out of the joining of two stalwarts in the medical aid field. both have proven track records and together have over 80 years of experience of providing service to the local government environment and many years in the open market.

"Both Boards of Trustees and management of the two schemes - with the assistance of independent consultants - had been hard at work for two years, going over every possible detail of the transaction. The answer from both sides was a resounding and unanimous affirmative vote to the amalgamation of the two schemes," Mr Sharman said.

According to Mr Sharman, the reason for the amalgamation between the former giants was that both Munimed and Global Health were major players in local government, with a substantial membership in the open market. The amalgamation resulted in a larger risk pool having been created, which in turn created a more stable and predictable claims profile, as well as more stable annual contributions. "It created economies of scale, resulting in lower fixed cost per member. The scheme has a larger bargaining power to negotiate with service providers, administrators and other parties. There is now a wider choice of benefit options to choose from, giving the members greater freedom of choice."

KeyHealth also now has a wider national footprint and will be represented in all major centres throughout the country. Both Munimed and Global Health were in sound financial position at the time of the merger whilst the combined resources of the amalgamated scheme exceed R200 million.

"With the amalgamation the name of the scheme will change but members will still enjoy the same benefits they have had in the past.

As the year goes by, it is apparent that members and service providers are once again exploiting medical aid companies throughout the country. This is a harsh statement but unfortunately true. Medical inflation is not being contained and the medical funding industry is bearing the brunt of this 'express train' phenomena.

"You continually hear of how the doctors are complaining that the medical aid schemes are not wanting to pay them. But I assure you that there is not a medical scheme in South Africa that does not pay the doctors what is due to them in terms of their scheme rules.

"Unfortunately service providers charge more than the medical aid tariff, so what do they expect? Hospital costs have skyrocketed and are, quite frankly, out of control. What is more, they are not controlled by an Act of parliament as is the medical funding industry," he said.

Said chairperson advocate Etienne Vermaak: "The similarities between the products of Munimed and Global Health were such that members of the combined scheme will continue to enjoy very good benefits at reasonable premiums."

KeyHealth offers five benefit options from which members can choose, depending on individual needs and financial position.

• Platinum: This benefit option provides comprehensive cover for high expenditure of chronic medicine and day-to-day benefits.
• Gold: This option provides good comprehensive cover for families with a day-to-day benefit.
• Silver: This option provides adequate cover for day-to-day expenses, with limited chronic benefits.
• Bronze: This option provides hospital cover for the young and healthy, with limited day-to-day benefits.
• KeyCap: This benefit option provides affordable cover at private hospitals and the network provider.