The Government Employees Medical Scheme (GEMS) was registered with effect from 1 January 2005 as a means to address the challenges in respect of the current provision of medical assistance to public service employees by government.
Medical assistance is one of the macro employee benefits in the Public Service that was identified for restructuring through the 1999 Wage Policy and Review of Personnel Expenditure Framework. In addition, the Public Service Co-ordinating Bargaining Council's Resolution 7/2000, between government and the public sector trade unions, provided for an investigation into the use of the collective purchasing power of the employees and Resolution 2/2004 makes provision for the implementation of a revised medical assistance dispensation with effect from 1 January 2006.
The shortcomings in the existing system which were identified through the Remuneration review include:
Inequality in access to medical cover based on the income levels of employees
Research over the past few years has consistently shown that income is the main barrier to medical scheme membership. Affordability, related to income levels, has resulted in the present situation where more than 40% of all public service employees do not enjoy the benefits of medical scheme membership. Since low-income employees cannot afford medical scheme membership, they forfeit the employer subsidy and do not enjoy the same levels of health care enjoyed by higher income employees.
Unchecked increases in expenditure on medical assistance
Government has experienced exceptionally high increases in expenditure related to the employer subsidy during recent times and research preformed over the years demonstrates clearly that the current patterns of cost increases are unsustainable for both the State as employer and its employees.
Lack of value for money
The high increases in government's expenditure on the medical subsidy are viewed in a particularly negative light because of the absence of value added. The increased government expenditure is not accompanied by the extension of the medical scheme benefits to low income employees and employees who do access cover continually report that their available scheme benefits are being reduced.
Lack of integration with the public health system
Government has not been seen to be actively pursuing the rehabilitation of the public heath system because it has simply paid the employer subsidy and not participated in the governance of the relevant medical schemes.
Lack of employer control
Government spent R5,1 billion providing medical assistance to approximately 60% (550 000) of its employees in 2004 -and as a result, government is the single largest contributor to private healthcare in South Africa. Furthermore, this R5,1 billion was spent on monthly contributions to many different medical schemes of which the employer has no Board representation; no control over the governance and operations of the scheme; no control over the pricing of benefits; and no control over the quality of benefits offered to employees.
In 2002, Cabinet approved a framework policy on a restricted medical scheme for further development by an interdepartmental working group (Departments of Public Service and Administration, National Treasury, Health, Education, Correctional Services and SAPS). The approved framework policy centered on the principles of:
Equity where employees have equal access to the most extensive set of equal basic benefits under equitable remuneration structures, subject to affordability);
Efficiency in respect of costs and delivery of benefits; and
Differentiation, where employees opting for more extensive cover have equal access to such higher benefits subject to their needs.
On 3 November 2004 after careful consideration of the findings of a detailed feasibility study conducted in the same year, Cabinet approved that the Department of Public Service continue work on the:
Registration of a restricted membership medical scheme for public service employees;
The establishment of the scheme's governance and management structure;
The development of a member enrolment strategy in consultation with National Treasury; and
Enhancing an understanding of the possible risks and costs involved.
In accordance with the approval given by Cabinet, the Government Employees Medical Scheme, or GEMS, was successfully registered on January 1 2005 following the Council for Medical Schemes consideration of the scheme's business plan and rules.
GEMS' is a restricted membership medical scheme where membership is limited to current public service employees and those public service employees who have since retired. The business of GEMS is currently directed by the interim Board of Trustees, chaired by Prof Levin (the Director-General of the Department of Public Service and Administration) and the scheme's Principal Officer, Dr Eugene Watson. Members of the scheme will be given an opportunity to elect further trustees at the scheme's inaugural Annual General Meeting.
GEMS' product offering consists of five dynamic benefit options that offer comprehensive healthcare benefits in a manner that is familiar to most employees. The five benefit options, named after precious gems, are Onyx, Ruby, Emerald, BERYL and Sapphire. The packages range from the very affordable Sapphire option that will provide essential cover, to the more expensive Onyx option where public service employees will enjoy more extensive cover. Even the lowest earner in the public service is hereby afforded the opportunity to access comprehensive medical scheme benefits by making a personal contribution of as little as R112 per month.
The monthly membership contribution payable by an employee who elects to enroll on GEMS will depend on their income and the benefit option they select. To further promote access and affordability, GEMS also employs income related contributions. A lower earning employee is therefore able to pay less than a higher earner for access to the same benefit option on GEMS.
On 25 May 2005, Cabinet approved an incremental member enrolment plan that will enable public service employees to enroll on GEMS over a particular period of time. Importantly, the intended enrolment of employees on GEMS is currently the subject of collective bargaining in the PSCBC.
Substantial progress has been made in respect of investigating and establishing GEMS. It is important not only to note the progress that has been made, but also to appreciate the range of synergistic benefits which are also realized through the implementation of GEMS. Whilst the implementation of GEMS is a unique process that has been undertaken by our democratically elected government, it should also be seen in the light of the President's request for all of us, who are involved in the public service, to 'think out the box'.
The implementation of GEMS sees the fulfillment of government's stated policy objectives regarding the restructuring of the medical assistance dispensation. GEMS' achieves the promotion of equitable access to comprehensive and affordable healthcare benefits by all public service employees and promotes greater access to this employee benefit by our lower income earners. The implementation of GEMS also sets an example to other employers by demonstrating that innovative medical benefits can be made available to all employees.
Implementing GEMS affords government the opportunity to exercise greater control over the large sums of money it currently contributes to the private healthcare sector and also over the selection and quality of healthcare benefits that its employees elect to contribute towards. Government will be able to directly influence the governance of the schemes it contributes toward because it will now be represented on the board of trustees of the scheme and it will be represented during the annual revision of benefits and contributions.
Government will be empowered through GEMS to provide more employees with an opportunity to improve their health and well being - in turn impacting positively on improved productivity levels in the public service.
The provision of a comprehensive HIV disease management programme, which includes antiretroviral therapy, counseling and clinical care, also presents dynamic opportunities for the extension of the current HIV workplace programmes - programmes that have already received international recognition and accolades. GEMS' also allows us to extend the scope of the HIV programme to employees and their family members.
Additionally, GEMS also achieves unique synergies with the work currently being performed by the Department of Health. GEMS may ultimately see the enrolment of an additional 1 million medical scheme beneficiaries, through the promotion of greater access to the employer subsidy by 380 000 of our employees and their families who are currently not enrolled on a medical scheme. The introduction of these additional beneficiaries into the medical scheme environment will result in a reduced public sector patient load and the reciprocal reduction in the demand on the public sector's finite resources. By enrolling members on GEMS' Sapphire option, additional revenue streams for public healthcare facilities and the public private partnerships will be created.
Lastly, the implementation of GEMS supports the work performed by the Department of Health with regard to Social Health Insurance and the establishment of the Risk Equalisation Fund. Both policy options, GEMS and Social Health Insurance, share the key policy principle of the promotion of equitable access to comprehensive benefits by more people. Synergies between the two policies are based on the fact that GEMS will:
Increase the size of the medical scheme beneficiary population;
Create large risk pools that will participate in the REF;
Demonstrate that affordable healthcare funding can be made available to the large numbers of lower income earners; and
Demonstrate that employers are able to extend medical cover to all their employees.
Eleven years in to our new democracy, it is apparent that our society is still characterized by two poles - one pole requiring government interventions that support economic growth and another pole requiring government intervention to deliver basic services that so many of our citizens depend on.
Government believes that it is imperative that equitable access to comprehensive healthcare benefits by our employees is promoted, as this will result in:
The expansion of medical scheme beneficiaries and the increased revenue generated in the private healthcare sector; and
A reduction in the pressure on many of our public sector facilities that so many of our citizens are dependent on for the provision of essential healthcare services.
The development and implementation of GEMS has been informed by substantial bodies of research, sound data analyses and intense consideration by Cabinet. The progress that has been made during the implementation of GEMS is further evidence of government's desire to apply unique and innovative measures to ensure that all our employees are awarded equitable access to their conditions of service in the public service.
The implementation of the Government Employees Medical Scheme is a positive development that clearly positions government as an employer of choice that truly cares for the health and wellbeing of its employees.
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