THE merger last year between Liberty Health Medical Scheme (LHMS) and Medicover Medical Scheme has brought far-ranging benefits to the members of the new scheme, known as Liberty Medical Scheme (LMS). So says Andrew Edwards, executive principal officer of LMS.
"There are four or five very important aspects to the merger," he says. "The first is that it improves the financial stability of the scheme, because of the combined reserves - it has gone from good to great.
"Secondly, members now have more choice in terms of the benefit options available, and thirdly, there's a bigger risk pool, which gives the scheme much greater stability - there's a more stable claiming pattern, and on the whole, increases are often lower than the market average."
He highlights the fact that LMS has a very strong governance structure which should give members greater peace of mind. "Liberty has been in the industry for a number of years, and is a great proponent of strong governance," he says. "There are many checks and balances in place to prevent abuse of power."
Finally, he points out that the scheme is much more representative of the demographics of SA, making it far more appealing to a broader spectrum of members.
The merger has also meant the scheme has moved from being the country's 11th largest scheme to fourth largest. "That gives us more buying power, more leverage to negotiate with third party providers," he says.
LMS has a unique feature in the form of its crime trauma benefits. Edwards says: "What has happened with a number of other schemes is that they have a risk benefit and a savings benefit, and the risk benefits have been degraded over the years.
"This means that increasingly, members have to use their savings for things that were previously risk benefits, so they pay more and more out of their savings or back pockets.
"So, for example, if a female member of one of those schemes was sexually assaulted, she would have to pay for her own trauma counselling, HIV/AIDS prophylaxis and so on, either out of her savings account, or out of her pocket if there were no savings left. Extrapolate that to a family traumatised by a home invasion, and you begin to see the impact.
"Often, people who suffer trauma as a result of crime end up emptying out their savings accounts completely," says Edwards. "But at LMS we do things a little differently, and the crime trauma benefit is a separate risk benefit. This means that members who are victims of traumatic crimes can get what they need without depleting their savings. And this unique feature is available on most of the options to varying degrees."
LMS has a pro-active HIV/AIDS programme in place, which Edwards describes as essentially a disease management programme.
"What many people still don't realise is that HIV/AIDS is a chronic, manageable disease, one that often costs less to manage than something like hypertension," he says.
"As well as helping members with HIV/AIDS to manage their disease, we also focus on prevention, and part of our risk benefits includes cover for needlestick injuries and mother-to-child transmission.
The merger has also had a direct effect on this year's benefits.
Edwards says: "While some of our competitors have increased premiums without increasing their benefit limits, or have even cut benefits, at LMS the benefit limits on all options have been increased by 8%, and our Medical Savings Facility benefits have been increased by an average of 10,6%.
"Then, on our Titan option, which is the biggest and most competitive option we offer, because of the merger we are able to provide unlimited hospitalisation cover, making this option more competitive.
"Members on the Platinum Plus, Platinum Focus and Platinum Complete options will continue to have freedom of choice when it comes to visiting their medical specialist of choice, and those specialists will be remunerated at 300% of the scheme's rate," he says.
Edwards concludes: "This is the first merger in the scheme's strategy to accumulate members by acquisition and organic growth. The actual merger has proceeded extremely well when one considers the size of the business deal, which provides a useful template for similar transactions.
"Clearly with the National Health Insurance scheme pending, and some of the disruptions in the rest of the healthcare market, the South African public is looking for a scheme and administrator that offer good benefits, are financially stable and have strong governance principles built into their business philosophy."
Mandy Collins: Health News Supplement: Business Day, 17 February 2010
