Members’ expectations not being met, according to index
Medical schemes are largely failing to impress consumers when it comes to customer satisfaction. According to the South African Customer Satisfaction Index, conducted by Consulta, there is no one scheme that has clearly differentiated itself in terms of customer satisfaction.
The index provides insights into the overall level of satisfaction of members of SA’s major medical schemes and is the only independent benchmark of customer experience in this sector. Consulta polled 1,707 medical scheme members across five of the leading schemes by membership numbers.
The index is based on a causal model that links member expectations, perceived quality and perceived value to member satisfaction, which in turn is linked to member complaints (and complaint resolution) and loyalty intentions.
“Consumers tend to have very high expectations of their medical schemes,” says Ineke Prinsloo, senior partner at Consulta. “However, in most instances, these high expectations are not met when it comes to experience.”
Surprisingly, medical cover is not deemed by consumers to be a grudge purchase but is rather an emotional buy which perhaps explains why expectations of a medical scheme tend to be high.
Medical schemes don’t fare much better when it comes to perceptions of value for money on their offerings. Average scheme contribution increases for 2020 are about 10%, significantly above inflation. Some schemes are introducing higher premium increases.
Consumer perceptions of value for money across the category are poor given that in most instances premiums charged do not match the comprehensiveness of healthcare that members expect. A number of schemes have introduced the perception of customisation through more benefit option while perhaps not disclosing the concurrent reduction of benefits.
“Perceptions of value are best defined as members getting what they think they paid for,” says Prinsloo.
Low scores in this area, she says, are the result of scheme members not fully understanding exactly what they are covered for. When they found out they are not covered for something usually when a claim is repudiated or find out they are liable for a co-payment, their satisfaction levels and perceptions of value for money take a nosedive.
“The medical cover landscape is a complex world for consumers to navigate. As schemes offer more choice to consumers, this landscape becomes correspondingly even more complex,” she says.
Incidents of complaints in the medical schemes industry are higher than any other financial services category. Consulta’s research revealed there is a correlation between complaints and customer satisfaction with those making complaints typically less satisfied.
One of the challenges facing consumers as they compare medical schemes and various plans on offer is that it’s virtually impossible to measure like for like in terms of hospital care, benefit options and the levels at which prescribed minimum benefits are covered.
“Consumers don’t always understand the benefits on offer, particularly around loyalty rewards, which are adding an additional layer of complexity to an already complex plan,” she says. “If they perceive that they have to jump through hoops to earn rewards, this lowers their perception of value. Effort kills value.”
While loyalty and reward programmes do play a role in encouraging consumers to consider a certain scheme, if the scheme fails to meet their expectations it won’t be sufficient to retain them as members, says Prinsloo.
Escalating contribution costs, unexpected co-payments and complexity in terms of cover were the biggest complaints members have about their medical schemes, according to the latest index.
“Even members who downgrade their plans to a more affordable option expect the same level of cover and resent making co-payments which leads to reduced customer satisfaction.
“This indicates that even those buying down have not reduced their expectations correspondingly. The challenge facing schemes is how to recalibrate the expectations of members when they downgrade their plans.”