Why Medical Aids are so Important in South Africa
No one is likely to deny the importance of good health or of the need for easy access to quality healthcare. The latter, however, is no longer as freely available as was once the case. At the time of its inception, our state health service was a model of excellence on which many other countries chose to base their own government-funded hospitals and clinics. It was not too long, however, before the growing cost of treatments and the matching growth in demand for those treatments led to difficulties that today have resulted in severe cutbacks to public healthcare in South Africa.
Since the early signs of inadequacy, those who could afford it began turning to the private sector for their care, while medical aid schemes, designed to provide financial assistance for those who could not, began to proliferate, reaching a peak during the ‘60s. To understand why these schemes are so necessary, it will help to take a closer look at the actual cost of some of the more common procedures undertaken by physicians, surgeons, and other specialists today.
While SA is still one of the cheapest places in which to buy a house or a fillet steak, according to an international survey conducted in 2012, we have the unenviable reputation as one of the most expensive places in the world for private healthcare. For someone in need of hospitalisation, and even before any form of treatment is administered, the average daily cost of hospital accommodation in South Africa was found to be between R5K and R6K. If you had required an abdominal CAT scan or an MRI at that time, most local medical aids would have been presented with bills for R3 800 and R8 800, respectively – double the price of the same procedures in Chile and over 15% more than in the tiny nation of Switzerland.
All is not doom and gloom, however. In fact, some basic procedures, such as an appendectomy and a routine natural delivery were found to be relatively inexpensive when compared with many international rates. At today’s figures, having your appendix out in Johannesburg or Pretoria carries an average price tag of just $3 408 although, given the current Rand/Dollar exchange rate, one can be forgiven for thinking that this is actually not much of a bargain.
If you still need a more convincing argument to support the importance of the 90 or so medical aids operating in South Africa today, try signing up for a cardiac bypass. In 2012, the procedure alone would have set you back a cool R304 000 and would probably have required you to sell your home to pay for it. In the 4 years since that survey, inflation has continued to affect healthcare expenses and tax the ingenuity of those who manage the country’s medical aids to provide financial assistance with which to meet these expenses that is both adequate and affordable.
Nevertheless, many companies have achieved som degree of success through strategies such as being more selective with benefits, limiting the amounts claimable and broadening the risk base by offering incentives to new members. Our policy at KeyHealth, however, has been to focus on core benefits and reduce costs through good governance and an extensive network of preferred service providers.