Putting members back in control of their healthcare – and finances
Lack of flexibility regarding their unique healthcare needs is listed as the single biggest concern of medical scheme members. Jeremy Yatt, Principal Officer of Fedhealth Medical Scheme, explains that while medical schemes are generally limited by legislation from personalising benefits in a way the market would ideally prefer, over the last six months Fedhealth has carried out extensive research among its member base to see how far it can go. It is poised to respond to the call from members that they want to be in control; they want flexibility and they want choice.
On 12 September, says Yatt, Fedhealth will launch the most advanced innovation to the current medical scheme model seen in 20 years – since the introduction of savings accounts. “Members are generally not happy with the way medical schemes are structured at the moment. Some are healthy but pay for benefits that they don’t need, and consequently feel they get nothing from their scheme while others would prefer to access richer benefits. In an environment of tight regulation, medical schemes products to date have been unable to satisfy the nuances of members who are calling for benefits tailored to their exact life circumstances,” says Yatt.
Medical schemes have been content to do the same thing for decades with no differentiation between them, safe in the knowledge that no-one has the courage to introduce a disruptive game changer. Yatt believes Fedhealth is poised to break that mould.
“Members have a misconception of networks, believing them to be restrictive and poor quality. At the same time they find that savings accounts are not flexible enough. They want more of a say over what their cover should be and how their daily benefits are used. They also want some control over how they pay for it. Therein lies the opportunity we have recognised. There is not one medical scheme in South Africa that offers the level of flexibility we are about to announce,” says Yatt.
“Our launch will be a first in South Africa and will directly address member choice. Currently, medical schemes claim to be personalised to an individual – knowing full well that’s what members want – but the reality is that personalisation stretches only as far as placing that individual into a generic category and benefit group that more or less fits one facet of their lives. They still have, at best, limited control over how their money is allocated,” he says.
Unlike other forms of insurance, medical schemes are prohibited from rewarding or penalising members for modifying their behavior. Fedhealth proposes to redouble its efforts to educate members. There are a number of claims trends which can be curbed through consumer education, says Yatt. There is an increasing incidence of members opting as their first course to visit an expensive specialist when a general practitioner would more than suffice. Lifestyle diseases such as diabetes and heart disease – the common results of obesity – are rampant all over the world.
“Underpinning our innovation is the desire for people to take charge of their health and their finances – but also to educate people who irresponsibly abuse their health that they must face the consequences. We are looking at what we call a ‘financing’ model as opposed to a ‘funding’ model. There remain financing options whereby an individual can set aside money for a health catastrophe – either by saving the money for it, or by borrowing and repaying. We believe we have cracked the mould by developing a mechanism whereby members can access a type of financing when they need it, but don’t have to fork out money if they don’t,” says Yatt.
“This will be a massive departure from how other medical schemes in South Africa currently manage their medical aid savings accounts, where members are usually charged for day-to-day savings at the beginning of the year, before they’ve even seen a doctor or purchased medicine. These funds can be up to 25% of the monthly premium,” he says.