Ten years on, GEMS remains an example to SA employers

Tuesday, 11 August 2015

As the largest restricted medical scheme in the country and the second largest medical scheme overall, the Government Employees Medical Scheme (GEMS) has become an integral part of the South African healthcare funding landscape over the past decade.

It is the only medical scheme in the country that has made an impact and inroad into the previously uninsured market.

Commenting on the recently released GEMS annual report for the year ending 31 December 2014, Dr Gunvant (Guni) Goolab, Principal Officer of GEMS, said that the Scheme continues to strive towards providing affordable healthcare cover for public service employees in South Africa.

"The positive impact GEMS is having on the medical schemes industry continues to set an example to employers in all sectors of our economy where there is still a need to redress past imbalances. The Scheme has achieved this through focused practice, dedication and innovation."

"During the year under review GEMS performed in line with the financial target that was approved by the Council for Medical Schemes (CMS)," said Dr Goolab.

Since GEMS was registered a decade ago on 1 January 2005:

• It has matured into South Africa's second largest medical scheme.
• It is responsible for 687, 694 principal members and approximately 1.84 million lives.
• 55.7% of all eligible public service employees are enrolled on the Scheme.
• It remains the fastest growing medical scheme in South Africa with the Scheme processing more than 60 000 new applications during 2014.
• When compared to other medical schemes, the GEMS benefit plans, namely Onyx, Ruby, Emerald, Beryl and Sapphire, are on average 15% less expensive, with similar or increased benefits.
• GEMS remains the largest contributor to the overall growth of the medical scheme sector and represented 20.3% of the sector by the end of 2014.
• At 7.8% the non-healthcare expenditure of GEMS, which includes administration costs, is substantially lower than the industry average of 12%.
• Over 12 500 healthcare providers are now registered on the GEMS network ensuring that almost 90% of its members are now located within 10km of a GEMS network provider.
• The average age of GEMS beneficiaries is 30.19
• The percentage of pensioners covered by the Scheme is 12.72%

Further, GEMS continues to engage in on-going research to track the satisfaction levels of its members with respect to various aspects of the Scheme's services, reveals Dr Goolab. Findings from the independent satisfaction survey conducted in 2014 indicated that 78% of GEMS' members are satisfied with the Scheme. The overall level of satisfaction implies a high level of confidence and trust in GEMS and strong brand loyalty.

Most of the members who were dissatisfied with the Scheme believed that they were not receiving good value for money, which primarily stemmed from the fact that they had run out of funds or had exhausted their benefits and therefore had to fund certain services out of their own pockets. This confirmed increasing affordability constraints witnessed throughout the healthcare funding industry.

"In 2014 GEMS recorded a deficit of R219 million. Such deficits are a challenge, which happens within the industry from time to time and which has occurred once before in 2010. This was mainly attributable to high claims ratios which occurred because of three primary factors including the ageing population of the Scheme, the increasing disease burden and the fact that GEMS is at present not attracting a sufficient number of younger, healthier members."

"While the Scheme collected R26.4 billion in contributions, medical claims to the value of R24.5 billion were paid during 2014. This equates to approximately R93 of every R100 when compared to the industry average of R85 for every R100. The accumulated funds held in reserve by the Scheme in line with CMS approved business plan now total R2,6 billion while the reserve ratio is 10,02%, which means that we remain in a fairly solid financial position. In the interest of members GEMS, unlike other medical scheme, do not apply waiting periods or underwriting exclusions," says Dr Goolab.

"Like many other medical schemes, GEMS is faced with challenges such as rapidly rising healthcare costs, a more stringent regulatory environment, and needs from multiple stakeholders," he observes. 

Over the past decade GEMS has grown steadily and has developed into a central pillar within the healthcare funding sector.