THE HEALTH OF SA'S MEDICAL SCHEMES

As the Covid-19 pandemic abates, finweek takes a look at the financial performance of some of the largest players.

- Timothy Rangongo

Every now and then, some global phenomenon or event thrusts a sector into the spotlight. It was the oil and gas industry with the first oil crisis in 1973. The local construction, travel, tourism, and hospitality sectors immediately after South Africa won the bid to host the 2010 Fifa World Cup. The finance industry when the global financial crisis of 2007/2008 hit.

In 2020, the world looked to the pharmaceutical, healthcare and insurance sectors for solutions. Both the local and global healthcare systems underwent significant pressures following the outbreak of the novel coronavirus. Medical schemes were caught off-guard with good reason, as just about everything about the ongoing pandemic was, indeed, novel.

Impact on listed medical schemes

Assessing the impact of this virus on overall claims experience, considering the incidence or infection rates, severity levels, treatment costs, duration and levels of premium member benefits that apply, were among key areas of challenge for medical schemes, says Ashleigh Theophanides and Rachaad Omar, directors at Deloitte.

Other challenges included assessing the impact of claims on solvency levels, which are linked to initial assessments and ongoing assessments around increased claims levels. Theophanides and Omar also flagged the challenge of communication to members around costs and benefits related to Covid-19 tests and where this will be funded from. This included the number of tests to be funded (from risk or savings pools, for instance), which medical schemes had to get right for claims containment purposes.