Treating costs

The Financial Mail  speaks to Council for Medical Schemes Registrar, Monwabisi Gantsho, about South African medical scheme reform

Is the medical scheme industry shrinking?
We have 105 registered schemes compared to over 150 in 2005, but this is not a sign of the end of medical schemes. Current mergers and consolidation are a combined effort by medical schemes to become more viable, efficient and effective in future.

What measures are there to protect members from the results of consolidation?
There are consolidation guidelines to ensure member benefits are not compromised as a result of mergers. If taken too far, consolidation threatens competition and can result in an oligopoly (a market/industry dominated by a small number of sellers/providers). Competition in the industry maintains the benefit for members.

What is the most pressing issue?
Cost containment is my current key focus. I am not convinced that investment in new technology is the cause of rising costs. Investment in technology, especially for large schemes, should be improving efficiency and contributing to a reduction in costs.

Is the medical scheme 25% solvency ratio requirement not part of the problem?
Schemes would argue that to have reserves of 25% does not work as a model, but at the moment it has been the most reliable method to protect the finances of medical schemes and their members.

Is the requirement for schemes to pay prescribed minimum benefits (PMB) in full not a contributor to increased costs?
A void exists since the scrapping of the national health reference price list (NHRPL). This makes it difficult to determine the true costs of health in the private sector. As long as medical scheme tariffs and provider fees do not have balanced billing, PMBs are there to protect members.

How far is the process of establishing a statutory pricing authority?
It will take at least another three years to have full legislation to determine private health costs. This is only possible through a fully consultative stakeholder interest process. Fortunately the current Health Ministry has taken an open-minded approach, allowing the industry to consult and debate pricing products and options instead of taking an autocratic approach to price determination.

Are gate-keeping policies an option to reduce medical scheme abuse?
We favour the process but there is not enough expertise currently to monitor gate-keeping and you need to have those fundamentals at all levels for fairness.
Are medical schemes threatened by the proposed National Health Insurance (NHI) scheme?
The majority in both the private and public sectors agree that health is an overall public good and you need both sides to be strong. Many schemes are aligning themselves to assist the NHI process to ensure overall benefits. Consumers have not lost faith in medical cover despite the recession, and membership numbers are growing.

Xolile Bhengu: The Financial Mail