How Important is a Medical Aid in South Africa?
When estimating the importance of a medical aid to South Africans, it pays to take note of some statistics compiled by the World Health Organisation just two years ago in 2013. Firstly, their survey revealed that the average life expectancy at birth for males is 57 and that for females is 64, and that 76% of the population can be expected to die before reaching the age of 60. Although better than some countries, these figures are worrying in a nation that ranks as the most technologically advanced on the continent
Although the details of the report do not include any assessment of the adequacy of the medical aid industry, it does make it clear that illness is the cause of most of these deaths and that many of them could have been prevented with the treatments available today. The impact of illnesses such as tuberculosis and HIV/AIDS, as well as work-related disease, such as pneumoconiosis, is well known and is being addressed both locally and with the help of overseas health workers and funding.
The root of the problem, however, is to be seen in two other WHO stats. While the gross per capita income nationally is $12, the annual per capita expenditure on health is $1 121, leaving most citizens dependent upon free, state healthcare. Without medical aid, the burden on state-funded hospitals and clinics would be even more crippling. In fact, as things stand today, many are already restricted, by a lack of supplies, equipment and trained staff, to providing primary healthcare services.
The reality is that more than close to nine million South Africans now rely on the private sector for their healthcare needs and that the services they receive are, by virtues of the superior facilities and higher staffing ratios, inevitably even more costly than those of the public sector. To subsidise these costs sufficiently to make them affordable to the patient, around 87 South African medical aid schemes contribute almost R130 billion every year. If they did not, more than 90% of current beneficiaries would be unable to afford private healthcare, thus leaving no doubt about their importance.
As with insurance policies, monthly premiums determine the extent of benefits, and these vary both between schemes and their individual products. Keeping premiums affordable in the light of rising costs requires careful management. This is especially true given that South African schemes are mandated to operate as not-for-profit companies and are also legally required to include numerous prescribed minimum benefits in all their products. Some compensate by maintaining huge membership, attracting new recruits to their medical aid schemes with various incentives, such as loyalty points that earn retail discounts. Ultimately, of course, such perks come at a cost and so benefits must be compromised to keep premiums down.
Other schemes, like us at KeyHealth, adopt a different approach, seeking innovative ways in which to cut costs and focussing, instead, on maximising the value and the relevance of the benefits that we offer our members. Our range of 5 well-designed products ensures something to meet the needs and the budgets of more families than most competing schemes. We don’t offer non-core perquisites. Instead, our network of preferred suppliers limits costs, allowing us to include additional health-related benefits with our medical aid.
