At a time when many medical aid members are feeling the economic pinch and schemes are becoming increasingly stretched by high hospital and specialist costs, Fedhealth, one of the larger medical schemes in the country, yesterday announced a modest weighted average contribution increase of only 8.9% for 2014.
Peter Jordan, Principal Officer for Fedhealth, says the scheme has managed to retain a healthy surplus of R152 million with over R1 billion in reserves. At the end of July reserves stood at 38% with a target of reducing these to between 28% – 32% to provide a buffer for new membership growth. Jordan said that while the scheme had grown only marginally over the last year with a total of 74 600 principal members, it was nevertheless encouraging to see that most of this growth had come from the corporate market in line with the scheme’s future strategy.
“Once again we retained our AA- Global Credit Rating which we have held since 2007. Retaining the rating is proof of our very high claims paying ability, that our protection factors are strong and that Risk is only modest. Our solid partnership model also ensures every necessary step has been taken to ensure that Risk is maintained at the most conservative of levels,” he says. “The focus remains to provide members with the assurance of predictable and affordable increases into the future. We have tried to keep inflationary increases across all options as low as possible without any reduction in benefits.”
To remain competitive and ensure growth, Fedhealth continues to steer its focus from the individual market to that of groups within the corporate sector. “We are increasingly being considered as the preferred second scheme of choice in the corporate market and this should bode well for future growth,” says Jordan. Jordan says technology and service will remain key differentiators in the largely “vanilla” market and making the transition process for corporates from a current scheme to Fedhealth as easy and hassle-free as possible will continue to be the scheme’s focus.
Jordan reports that Fedhealth’s Networks have consolidated with more than 4 400 doctors currently belonging to the Fedhealth GP Network. 75% of members are currently using these Network GPs and 83% of claim costs emanate from the GP network. In 2012 Fedhealth first introduced the benefit that all GP visits would be paid purely from Risk, without ever touching the member’s savings. This continued for the 2013 year and will continue into 2014 as well.
The specialist network has also progressed well with 58% of members utilising the services of the 3 400 specialists on the network. Again over 75% of claim costs are from network specialists showing the success of the network. “Using a Fedhealth Network Specialist means no co-payments for members in-hospital and price certainty out-of-hospital. “Our objective is to ensure that members are able to access meaningful benefits without having to resort to out-of-pocket payments. Our long term strategy is all about improving health outcomes and bending the cost curve by leveraging our partnerships for mutual benefit.”
In terms of innovation, Fedhealth launched its digital strategy this year. Jordan believes there will be an increasing move by consumer-savvy members to demand more honest interactions and meaningful engagements with their schemes.
“I believe that in the future we are going to see more of a move towards preventative healthcare and the introduction of programmes which support this.
This will involve more member education and a genuine commitment from schemes to generate conversations with members. Not only will this enable the scheme to address its members’ concerns directly, but also to gain a better understanding of their wants and needs. Medical aids have a massive responsibility towards their members and transparency will be a key differentiator in future. Live chat rooms, online log in facilities for queries and innovative new apps are all very much a part of the future medical scheme landscape,” he says.
Looking forward Jordan says as always, stability and sustainability of the scheme will remain its top priorities to ensure individual and corporate members enjoy peace of mind as they look to the future and their medical needs. “We are optimistic about the year ahead and all it has to offer,” concludes Jordan.
Compiled on behalf of Fedhealth by Cathy Findley Public Relations