Business Day, 26 November 2002, Affordable Care Is The Challenge

Medical schemes have been buffeted by the force of the regulator and the consolidation of administrators, while at the same time technological advances and a weak rand have spurred on medical inflation.

Escalating costs have raised contributions year after year, widening the gap between those who can afford healthcare cover and those who cannot. Increases have exceeded normal inflation by at least 5% over the last decade.

Dr Leighton McDonald, executive manager of Qualsa Healthcare, says that in the medium term additional costs to medical schemes, including those associated with HIV/AIDS, can be covered only by raising member contributions or by managing existing costs effectively.

The challenge for SA's private healthcare industry is to offer good, quality healthcare in an affordable and cost-effective manner, including a realignment of how benefits are controlled and claims paid.

"Cost continues to be the most common barrier to entry into private medical schemes and will need to be addressed by lowering the costs of options available to low- income earners along with securing increased employer subsidies," says McDonald, who serves on the board of governors of the SA Business Coalition of HIV/AIDS.

For consumers already reeling from price rises of day-to-day essentials, the regular rise in annual medical contributions is a blow.

Several tariff increases have been announced in recent weeks by a number of schemes. These range from one at 11,11% to several at about 14,9%. Still, some schemes are managing to keep increases below the market average, while improving their benefits.

Leon Laubscher, principal officer of OpenPlan Medical Scheme, says the benefit improvements include raising overall annual limits from R100000 to R500000 on its primary and principal plans, while making them unlimited on certain options. "We recognised that there was a lack of affordable entry-level products in the industry that do not compromise the quality of care. Through initiatives with Afrox and Medi-Clinic, OpenPlan has adapted its lower cost options to offer members greater choice," he says.

Members on OpenPlan's lowcost options now have access to some of the top private hospital facilities in the country at reduced rates, says Laubscher.