20 May 2009

Recession threat to med schemes

The medical scheme industry could be affected by the global financial crisis, the Council for Medical Aid Schemes (CMS) said.


The medical scheme industry could be affected by the global financial crisis, the Council for Medical Aid Schemes (CMS) said on Wednesday.

Presenting its 2007-2008 annual report, senior advisor to the council, Alex van den Heever, said there could be a drop in membership, however this would only be noticeable in the next annual report.

"We haven't seen a slowdown in the membership despite the recession."

However, acting registrar Patrick Matshidze said indications were that the sector which could be hardest hit would be the mining industry as it was expected to shed jobs. He said medical aid schemes had also been consolidated since the previous annual report. "It doesn't appear as if that consolidation has led to an outflow in terms of members," he said.

Operational challenges
Some of the problems still facing medical aid schemes were largely operational, however some members were being affected. "We do not think the problem is as extreme, but we are aware that there are certain operational challenges.

"There are some instances where some medical schemes go beserk, but in the midst of that there are a lot of medical schemes that are giving members value for money."

Medical aid schemes where problems were most likely experienced, were open schemes in which the bottom dollar was a priority. "In the open scheme environment there is that encroachment of commerce that sometimes seems to muddy the waters."

A total of 7.8 million people are members of medical aid schemes, of this five million belong to open schemes. Restricted schemes were packages facilitated through a company and therefore quality of service was emphasised. – (Sapa, May 2009)


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