Open house as Open schemes start to announce their Contribution increases for 2015

The trend for the past number of years continues and supports the Minister of Health’s call for an investigation into the ever increasing costs of private health care. Sadly the announcements made so far continue the past trend of a number of years now wherein medical scheme member contributions increase well above the normal inflation rate namely CPI -consumer price index. Healthcare inflation has been higher than CPI-linked inflation for most of the past decade.

So how does the state of the land of increases look for now?

  • Discovery – 9.9% (Executive option 10.9 %)
  • Bonitas – 7.2% (Range between options 5.7 % to 9.8%)
  • Momentum – 7.9% (Range between options 3.5 % to 10.8% top option)
  • Genesis – 5.5% (Maybe bigger is not better for future increases? The smallest scheme has the lowest increase so far for 2015) Well done Genesis

Other increases also announced are listed below.

  • Bestmed – 8.6%
  • Medshield – 9.5%
  • Liberty Medical Scheme – 10.4%
  • Fedhealth – 10.6%
  • Medihelp – 12.5%

Trends I am observing are that many schemes are getting more involved in wellness or encouraging their members by incentivising some good behaviour change. Some schemes apply a Robin Hood approach by charging more on their top plans and less on their low cost options. A new and interesting trend and one I do believe will grow in years to come is for schemes to structure their offerings around the member and his/er circumstances.

The one lack that I do see is real cost saving initiatives. We need to revisit how the private healthcare system is structured. Schemes have billions in reserve. Why is no one leveraging these funds to drive down costs by getting involved in the supply side or different models of care delivery?

So why blog on this?

All members have a once a year opportunity to review their health plans and most don’t take advantage of the opportunity. I urge scheme members to do their homework to understand how their 2015 benefits have been adjusted which could be some erosions (no adjustment to annual limits) and what the financial increases are. Check whether various limits and sub-limits have stayed the same or dropped because both of these actions are akin to a reduction in benefits. Once all the intricacies of various plans are known, it is a matter of choosing the best fit.

Questions to ask when deciding on a plan for you and/or your family:

  1. Did your lifestyle or life stage change in the last 12 months?
  2. What are your day-to-day out of hospital healthcare needs?
  3. Are you comfortable with being restricted to a specific network of providers?
  4. Do you like the idea of a flexible medical savings account that gives you control over day-to-day benefits?
  5. Do you like the flexibility of a savings account, but also want the security of a ‘safety net’ should your needs increase unexpectedly – threshold benefits?
  6. Or do you prefer out of hospital benefits to be covered by the scheme, subject to insured limits?
  7. Do you use ongoing medication for a chronic condition?
  8. What are your in-hospital needs?
  9. Lastly which plan is affordable for you?

Happy hunting for the right medical benefit option for 2015.

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4 thoughts on “Open house as Open schemes start to announce their Contribution increases for 2015

  1. Thank you for your thoughts on the ever increasing burden of medical aids on the pocked of the man on the street. I just want to comment on some comments that was quoted in an Article in one of the local newspapers in Bloemfontein, that doctors were one of the main reasons why medical aids keep on raising their contributions above the expected inflation rate every year. I quote ” all medical schemes are obliged to pay whatever amounts the doctors charge” and hence the raise in their contributions. I beg to differ – the medical schemes have price reference lists- if a doctor claims above that rate- they do not pay the extra rate- it is for the patient’s pocket. These list are given out in December or early January to the doctors and if you ask more for the consultations or any other service- the Schemes do not pay more! These price lists are made up by each medical scheme and they are the ones that have the say in the amount a doctor is allowed to ask- not the doctor themselves. I would ask the general public to ask their medical schemes to report on exactly how much they spend on direct medical costs and how much is spent on Administration – the percentages are shocking- some medical schemes spend about 70% of the monthly contribution of a member on administration- only a mere 30% is spent on direct medical cost – Where to save more????? I wonder!

  2. Hello Carla.
    I am intrigue by your comments around Medical scheme paying 70% of contributions on administration.. Can you give our readers an example as I am not aware of such numbers?
    I have been interested and involved in private healthcare for over 30 Years and have not come across such a situation. I am an independent healthcare strategist so these matters interest me. So I am not part of any group.
    I look forward to your reply.
    Kind regards Len

    • I attended a seminar that was about medico legal issues,PMB conditions and the legal obligations that medical schemes have when it comes to paying for related treatment a time back. A specialist when it comes to the medical schemes and related issues of payment of conditions and the rights of the patient, gave us alot of very interesting facts when it comes to the percentages if what is spend on what by medical schemes. I will contact her and get the stats. I challenge you to get stats that proves me wrong. On the other main topic of doctors being one of the role players in the rising costs- doctors gets ‘peer reviewed’ by some medical schemes every quarter. This means they are rated on their cost effectiveness- how much their scripts cost,how much the tests cost that they send patients for, and even on the costs specialists ask that the patient was referred to by that doctor. If you are found not to be cost effective, the scheme can decide to take you of the list of providers and thus recommend someone else instead of that doctor. GP’s in general, is expected to manage patients and their benefits and cannot just ask what they want to and the schemes “have to” pay for it. Even the hospitals are price listed. Ask patients that has been in the hospital how many accounts came back unpaid because the schemes did not cover the full amount. Yes, medical costs are high,yes, we all have to look at ways to make it more cost effective,but please,blame the right people……

      • Carla. a good place for you to get the facts on actual medical scheme costs in all areas including administration is from the Council for Medical schemes. they publish a annual report which is available to the public on their website. It makes very interesting reading and you will see that most medical schemes non health care costs are well under 17% if not closer to 10%. it details what is admin expenses what is used to manage networks and manage care etc.

        What you say on Doctor and in particular GP profiling is correct. When I was at Bankmed we started the GP Foundation which put this profiling in the hands of the providers directly and not the medical scheme administrators as was the case for many years. This enable GP/Doctors to establish the best criteria for assessment and also measurement too. I believe it works well that way.

        For me the interest change that occurred was the Competition commissions ruling that resulted in the current situation where there is really no maximum scale of benefit for doctor costs as they relate to PMB’s. hence the specialist out of Medical scheme rate has resulted in large out of pocket expenses for many of us medical scheme members. You will find that the out of pocket cost for the actual hospital stay if pre-authorised is very small. Unless you choose a private room.

        The real issue if that health is a social good and is very complex for the average person. Cost are resulting in it becoming not affordable for many. I agree with you we need to re-look at how it all works and how the money is used and divided. Albert Einstein said “You cannot solve the problems you face today with the same mindset that created them”. I am sure you agree and hence we have to create a platform to discuss how we can resolve the challenges we all face in Healthcare. I believe we need to have a Health CODESA with all role players to see how we can find win/win solutions to move forward for all citizens tom have access to rational, cost effective healthcare. this needs to be on a principle I would like to suggest of Coordinated care with the GP in the middle.

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