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South African Medical Aids and Healthcare


A Brief History of South African Medical Aids and Healthcare

South African medical aids have been in existence for a good deal longer than most people are aware of. They first made their appearance during the ‘60s, although their offering at that time was markedly different from that of today. Although the state health service today is underfunded, overburdened and, in many cases, unable to deliver more than primary healthcare, this was not always the case. Following its launch, the excellent standards it maintained soon became the model for the state health schemes of several other countries.

In time, however, it became apparent that, given the sheer volume of patients, many experienced long delays before receiving treatment. Consequently, even before the advent of South African medical aids, private healthcare facilities began to spring up. The alternative facility was aimed at those who preferred not to be assigned to a waiting list and had a sufficient income to pay for their treatment. Because private clinics charged for their services, they acquired the capital to expand and improve their staff and facilities, while the burden on state-funded establishments meant their development was slower and, to a large extent, confined to the larger, key establishments, such as the teaching hospitals.

Gradually, more of those who depended upon the state’s healthcare service became eager to seek private treatment but lacked the finances. It was to assist these individuals that South African medical aids were eventually established. However, while the early offerings of these private healthcare funds were of help, they were by today’s standards, somewhat restricted and more closely resembled an insurance policy than the comprehensive schemes of later years.

In practice, it was the traditional insurers who first dominated this specialised field. However, rather than offering benefits that were directly related to the costs incurred, as in the case of motor insurance for instance, their healthcare policies paid a fixed sum and left the policyholder to cover the inevitable shortfall. This remained the nature of cover provided by the South African medical aids for some time and it was only in the ‘80s that companies with a greater insight into the nature of and the costs associated with healthcare that their more comprehensive cover finally ended the insurance industry’s dominance of this sector.

The new schemes were still not under the control of a formal regulatory body and the requirements for membership often precluded or penalised those with pre-existing conditions. Only in 1998, following the formation of the Council for Medical Schemes (CMS), did this change, and the provision of prescribed minimum benefits (PMBs) to all members become a legal requirement.

Since then, healthcare costs have escalated steeply and the managers of South African medical aids have needed to find innovative new packages to keep premiums affordable and attract the membership numbers that are essential to finance a viable scheme. New products include an updated hospital plan that addresses actual costs and includes cover for PMBs – a vast improvement on the insurance companies’ hospital cash plans.

At KeyHealth, we offer a refreshing new approach. By stripping all the irrelevant fringe benefits and add-ons with which other schemes compete for membership, we are able to offer a simple, transparent product focussed entirely upon patient needs, yet still maintain competitive premiums – a new standard for South African medical aids.