The state of flux the private healthcare industry currently finds itself in is reflected in the declining scores in the 2018 South African Customer Satisfaction Index (The SA-csi) for Medical Schemes.
Professor Adré Schreuder, Consulta CEO
According to the report, the sector average dropped from 74.2 in 2017 to 72.7 in 2018. This is primarily due to two of the large brands included in this year’s benchmark showing declining scores. Bonitas’ score declined from 73.1 to 70.2 and Discovery Health also reported a decline from 74.8 to 73.1 over the year.
Medihelp was the only open scheme in this year's benchmark to see an improved SA-csi score, continuing to reap the benefits of its turnaround strategy noted in 2017. It consistently improved from 70.7 in 2015 to 72.6 in 2017 and 75.1 in 2018 to lead the industry in customer satisfaction. It is noted that Momentum Health maintained its SA-csi score of 2017 - now on 72.0.
Overall, however, South Africans are increasingly frustrated by rising premiums and shrinking benefits, as well as a feeling of lower value for money in comparison to other financial service products.
“While the market’s dominant heavyweights remain strong competitors, pack leader Discovery seem to have shifted focus to other business offerings in its product suite, including the launch of its anticipated banking services and its long- and short-term insurance offerings. This has allowed its competitors to even out the playing field in the medical product suite by delivering simpler, traditional medical insurance that is seen to be less expensive and easier to understand,” says Professor Adré Schreuder, Consulta CEO.
Medical Schemes Amendment Bill
In June, Minister of Health Aaron Motsoaledi announced the NHI and Medical Schemes Amendment Bill, proposing sweeping changes to the running of medical schemes. These changes are aimed at benefitting a wider range of members and paving the way for the NHI financing system for all South African citizens, not just those who can afford medical aid products. Opponents of the plan point to various challenges to the viability of the NHI, should it be implemented.
There are also concerns that the changes announced will have a significant effect on increasing premiums for 2019 and medical aid schemes will have to deliver commensurate improvement in their service offerings to neutralise the potential negative impact in customer satisfaction levels.
“Over the years we have noted the impact of organisational changes, including restructures and changes in management on customer experience as the organisational focus and energy tend to shift towards internal developments rather than on customer delivery.
“Medihelp’s strategy to focus on leveraging the contributions and focused delivery from its strong leadership team, which is underpinned by targeting a niche audience and offering exactly what members want and understand, is working,” says Schreuder.
Now in its sixth year, the SA-csi for Medical Schemes offers impartial insights into South African medical aid schemes by measuring customers’ overall satisfaction out of 100. This satisfaction score is based on medical schemes exceeding or falling short of customer expectations and the respondents’ perception of the ideal service provider. The index also includes, among other measures, a customer expectations index, a perceived quality index and a perceived value index. The 2018 sample included 1,675 respondents who were randomly selected from five medical schemes to participate in the survey.
“Medical premiums rose past inflation increasing on average by 9% this year, and are significantly higher than premium increases in short-term insurance and life insurance,” Schreuder says. “The cost of medical services continues to increase at a rapid rate as consumers are challenged with a supply-induced demand scenario, where medical schemes are forced to carry the cost of unnecessary treatments or admissions by doctors, which is ultimately passed on to members.”
The effect of this can best be seen in the perceived value index, where Medihelp and Momentum Health share the leadership position in 2018. For both brands this came from showing remarkable increases in the year. The Medihelp score from 70.9 to 73.6 in 2018 and Momentum Health increased its score from 70.5 to 72.3 over the same period. Although not to be compared with open schemes, GEMS, which is still behind the industry average of 69.4, scored 67.5 in this measure, which was a 3.9-point jump from its 2017 score of 63.6 marking notable improvements in this year’s survey. Bonitas fell from 70.7 to 68.3 and Discovery Health dropped from 72 to 69 in its perceived value score.
With more than 270 options available, choosing medical insurance products is even more confusing to customers. Many are left feeling frustrated when their claims aren’t covered and the general customer experience of medical schemes remains one of capped benefits and rising premiums.
To remain relevant in the face of NHI, private medical schemes need to assess the value they provide to customers, such as quality, affordability, transparency and ease of use, which should be integrated into their daily operations.
“As the government takes steps to roll out healthcare financing for the entire population, the central issue it will have to address is ensuring that it operates to the same level currently delivered by the private health care industry, and customer experience will be the driving force behind this,” concludes Schreuder.
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