Medical schemes performance underwhelming

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The South African Customer Satisfaction Index (SA-csi) for Medical Schemes (2019) provides insights into the overall level of satisfaction of customers of medical scheme providers – Bonitas, Discovery, Gems, Medihelp and Momentum. Gems is the only closed medical scheme included in the survey. Consulta, which conducted the survey, polled 1,707 medical scheme members across five of the leading schemes by membership numbers.

Overall, customers indicated that they do not believe that the premiums paid match the quality of cover and experience on offer. Across the board, the industry is struggling to meet the needs of customers in terms of benefit design that meets the needs of customers in a simple and transparent manner. No outright leader was identified in this year’s index, with Bonitas and Discovery obtaining a joint leadership position, Medihelp coming in on par with the industry average (72.9) while Momentum is just below par and Gems lagging in last place.

Customer satisfaction – overall index

Bonitas (75.1) and Discovery (74.8) lead the industry, Medihelp (73.5) come in on par with the industry average score of (72.9), while Momentum scores just below and Gems with the lowest score at 68.3. Overall customer satisfaction for the industry has increased to 72.9 compared with 71.6 in 2018.

Bonitas and Discovery were the only two schemes to show an improvement on 2018 scores, with Bonitas showing a big improvement of 4.9 index points in 2019, followed by Discovery with 1.7 index points.

Gems (-0.5), Medihelp (-1.6) and Momentum (-1.3) showed a decline on overall customer satisfaction compared with 2018 scores.

While Discovery, Gmes, Medihelp and Momentum have stayed relatively stagnant on overall customer satisfaction scores for the last two years, Bonitas has made a significant improvement in 2019, suggesting that recent strategic reviews of its benefit options and member focus are starting to pay dividends.

Customer expectations and perceived quality

Across all brands, customer expectations are not being met consistently. South African customers have very high expectations of their medical scheme providers (industry average of 80.6) given the fact that it’s an expensive buy and communication around benefits is often not done clearly.

Bonitas and Medihelp are the only two brands that showed a positive gap - albeit marginal - where perceived quality meets customer expectations.

Perceived value

Perceived value is a measure of the quality, relative to the price paid. The perception of value for money is a very strong predictor of future usage and company growth.

In terms of the value index, Medihelp (71.6) takes the lead, Bonitas (70.9), Discovery (70.6) and Momentum (71.4) are all on par with the industry (69.6). Gems is below par at 66.1. Bonitas and Discovery are the only two schemes that saw a marginal increase in perceived value score compared with 2018.

However, when perceived value is overlaid with the price-quality alignment, customers of all brands feel that the premiums charged do not match the quality of the cover and experience on offer. In this regard, Discovery has the biggest gap (-6.2) in perceived value and price-quality alignment, followed by Bonitas (-5.8), Medihelp (-4.9), Momentum (-3.9) and Gems (-2.3).

Complaints incidence and resolution

Of the complaint incidence across the industry, customers complained most about fees and charges (22%), claims issues (19%), terms of cover or scheme rules (13%), feedback (9%) and waiting time (7%).

Discovery and Medihelp have the most complaints about fees and charges, both at 28% and above industry average (22%).

Medihelp has the highest incidence of claims-related complaints at 26% and well above industry par of 19%.

In terms of complaints incidence and handling the industry average of complaints incidence is 15.9/100 and complaint handling is 48.6/100.

Discovery has the lowest complaint incidence at 13.2/100 and complaint handling of 51/100. Bonitas’ complaint incidence is at 14.3/100 and complaint handling of 51.5/100. While Medihelp has a complaint incidence slightly higher than industry par at 15.8/100, its complaint handling score is well above industry par at 55.7.

Momentum and GEMS perform below average in this category.

Customer loyalty

Bonitas has the most loyal customers at 69.4%, above industry par of 64.0%, and has also seen a big improvement of 7.5% in loyalty score compared with 2018 (61.9%).

Discovery, Medihelp and Momentum all saw a decline in customer loyalty scores.

Net promoter score

This measures the likelihood of a person recommending a brand.

Bonitas has the highest net promoter score (NPS) at 21.6%, which is well above the industry average (9.5%). Customers are active promoters of the brand to others, with 45% of customers recommending the brand. It also has the lowest number of detractors at 24%.

Compared with 2018, Bonitas has seen a radical increase in NPS score when it came in at a low of 2.6%, suggesting that its focus on benefit simplification and customer satisfaction and complaints handling have had a marked impact on how customers perceive the brand, and their willingness to endorse it to others.

Discovery follows with an NPS of 14.5% which is on industry par and marginally up on its 2018 score of 12.2%. 41% of Discovery customers actively promote the brand, and 27% are detractors.

The balance of scores see a big drop-off on NPS performance well below industry par - Medihelp (10.9%), Momentum (8.4%) and Gems (-6.7%).
Gems has a high percentage of detractors at 43%, well above its promoters at 36%.

Treating Customers Fairly (TCF)

The degree to which customers feel they are being treated fairly by their medical scheme is highest with Medihelp (78.2) and Bonitas (78.9) – both above the industry score of 76.2.

Discovery follows with a score of 77.1 which is in line with the industry.

Gems (73.6) and Momentum (72.9) are lower than the rest of the industry.

Overall score

The make-up of the overall TCF score looks at seven key aspects including:

• Fair treatment of customers
• products and services that address customer needs
• Transparent and easy to understand information
• Advice that is suitable for the customer’s circumstances
• Products and services deliver as expected
• It is easy for customers to claim, change provides, complain or consider other providers
• Customers are treated with respect and there is an open relationship

Annual private healthcare increases have been well above, if not double inflation, for more than two decades now which has steadily eroded the benefits that consumers can afford, with many forking out as much as 20% of their monthly income for medical aid. In response, consumers have opted to downgrade to more affordable benefit options.