Medical-aid scheme payments to brokers increased by 21% last year to R704-million without any perceptible increase in the number of new members joining, the Medical Schemes Council said on Monday.
The rise was probably caused by a misguided sense of competition and new services charged by brokers, council head Patrick Masobe told reporters in Pretoria.
He was speaking at the release of an annual report into medical-aid schemes.
Schemes felt they had to pay ”more than the next guy” to move members to join, although the numbers showed this was not happening.
”In the past, schemes only paid brokers for members introduced, but now an ongoing service fee is also paid,” Masobe said.
The report found brokers’ fees made up 12,2% of total non-health expenditure by medical schemes. The fees had increased by 206,4% between 2000 and 2003.
The council plans to investigate brokers’ fees further and give recommendations to Minister of Health Manto Tshabalala-Msimang on dealing with the increases, said Masobe.
He said, however, the year-on-year increase in belonging to a medical scheme has been decreasing since 2000.
The largest increase in benefits paid went to private hospitals, which rose by 16,9% to R15,7-billion.
Masobe said one of the challenges revealed by the report is how to deal with the ”high and exploding” cost of services in private hospitals.
”There are no clear tools on how to address the increase in private hospital fees. Right now we are trying to conscientise policymakers, researching what causes it and advising policymakers on how to deal with it.”
Masobe said the private hospital market is not a competitive one and a multipronged strategy is needed to deal with that.
The council is to start discussing how medical cover could be expanded to ensure people with low incomes have access, he said.
Masobe estimated more than 2,5-million South Africans earning between R2 000 and R6 000, are for one reason or another unable to obtain medical cover.
He said a report on the issue is expected at the beginning of next year.
”We will then look at what government, employers and medical schemes can do to facilitate access to medical cover for low-income earners.”
Another challenge, Masobe said, has been the fair treatment of members by schemes. He said there have been cases where members registered for the same option of a medical scheme are paying different prices.
Recommendations to rectify this have been initiated and are to continue, he said.
The report found the medical-scheme sector to have stabilised since 2000, when it started making an operating profit for the first time. Schemes are also more financially viable, meaning members are better protected from schemes’ insolvency. — Sapa