Is medical aid a rip-off?
OK, Tell Me More?
After some delay, the Competition Commission released its Health Market Inquiry, which takes a hard look at South Africa’s private healthcare market.
Hmm, Go On?
The report was born from questions around rising costs within the industry. It has the dual purpose to both gain insight into how SA’s private healthcare sector truly operates and investigate the factors that influence its competitiveness.
Give Me The Highlights?
Findings point to a market with frighteningly high medical scheme premiums and increasing out of pocket payments for the insured. All this while the range of services available to consumers decreases. On the ground, that means you’re paying more for medical aid than in the past, but getting less. Doctors in SA have also been admitting patients into the hospital at a much higher rate than some comparable countries. This leads to unnecessary use of benefits and ultimately increases costs to medical aid providers – who tend to pass those costs along to us in one way or another.
Friends, as a consumer, you’ve probably found it difficult to compare various medical aid options, the exact benefits they each offer and the value you stand to gain. These complexities are at least somewhat intentional and can be overwhelming – often leading us to be taken advantage of. Stay on your toes.
So Is There Competition?
Of the 22 medical schemes in SA, Discovery has the greatest share of the market at 55%. It comes as no surprise that Discovery has been able to earn sustained profits well in excess to that of its peers.
At the same time, three hospital groups (Netcare, Mediclinic and Life) account for 90% of admissions. As you can imagine, this makes it difficult for medical aid schemes to bargain and ultimately hurts the consumer. More choice would improve competition and pricing.
Among other factors, the Commission is hopeful that improving the comparability of schemes and fee model interventions can improve the competitive landscape. Let’s see what comes of this.