MEDICAL schemes services are viewed by the majority of prospective lower-income members as a luxury rather than a necessity. Making it even more difficult to reach this market are the dramatic increases in medical aid rates, which are consistently above that of consumer inflation, so says Dr Johan Pretorius, CEO of Universal Healthcare.
According to Pretorius, costs in the medical scheme industry have been driven particularly by hospital admission, which currently comprises 37 percent of the medical aid spend.
"This can be attributed to the so-called 'technology creep', where new procedures and technology offer more accurate diagnosis and more effective treatment, but always at an additional cost. Other contributing factors to increased medical costs include fraud where members and providers are partners in crime in abusing medical funds, and an ageing population."
However, Pretorious says that one of the biggest barriers to affordable healthcare is the cost of treatment for Prescribed Minimum Benefits (PMBs). These currently include any emergency medical condition, 271 diseases and 26 chronic conditions. By law medical schemes are obliged to cover all in full, irrespective of the amount charged.
"PMB codes are therefore open to abuse by unscrupulous healthcare practitioners who manipulate the codes in order to charge higher fees than necessary resulting in massive additional costs, " he explains.
In order to survive, healthcare administrators are under pressure to find better, more affordable ways to provide health care cover. Pretorius believes that one of the most effective ways of doing this is by networking providers and gainfully engaging them.
"In the case of network products, providers are incentivised to keep patients healthy, as opposed to simply treating diseases. Where members are kept healthy, and where the costs are kept within predefined parameters, the practitioners are rewarded for good health outcomes."
CompCare Wellness Medical Scheme, an affordable open medical scheme administered by Universal Healthcare, has experienced strong interest in its Networx option, says Pretorius
Loraine Tulleken: Business Report, 28 May 2010
