Bestmed, Sappi medical scheme merger

This merger, which was approved by the Council for Medical Schemes in March this year, will increase the Bestmed's membership by 3500, growing its membership to just over 81 000 principal members and positioning the scheme as a strong competitive player in the healthcare sector.

La Grange said that there are two ways for a scheme to grow: through organic growth or amalgamating with other schemes. "Amalgamations of closed schemes with open schemes are a growing trend in medical schemes industry, as it is proving increasingly difficult for closed schemes to survive. After a rigorous selection process, involving intense actuarial processes, administration and presentations by all candidates, we are pleased to partner with a reputable and well established company of Sappi's stature and welcome its members on board."

Sappi Southern Africa's Finance Director, Colin Mowatt, comments on the merger, "The restructuring of Sappi Southern Africa and the changing landscape regarding medical schemes prompted Sappi to compare continuing as a closed scheme versus an amalgamation with an open scheme. After intensive research and comparative studies, Sappi opted to merge its scheme with an open scheme. Our top priorities were meeting the needs of our members and affordability.

"We eventually shortlisted three suitable candidates. Bestmed was selected as the scheme of choice due to its similar values, best practices, financial stability as well as their national footprint. Our staff will continue to enjoy access to top class medical services while also enjoying greater flexibility in coverage options and in most cases significant savings."

La Grange says that the scheme's client-intimacy approach and service excellence strategies to enhance our members' experience, have earned Bestmed the reputation as a scheme of integrity, where the focus is on people. "We have designed products to accommodate the new members, which have boosted our pool of offerings. All the new members will be enrolled and will receive a hearty welcome to their new scheme, Bestmed, by 1st April."

Medical scheme landscape

Between 1994 and 2006, the number of medical schemes declined from 170 to 124 in the country. Currently, there are over 100 medical schemes, 26 of which are open schemes. The viability of medical schemes with smaller risk pools and higher claims ratio has played a major role in some schemes' closures. Smaller schemes were taken over by stronger and more financially stable ones.

"Bestmed kept its head above the water even when times were tough. Despite the decrease in the number of schemes, membership increased considerably over the years. We have acquired some schemes to strengthen our base and this strategy still continues. We are currently talking to other potential schemes with which we can amalgamate, and if these transactions are successful, our presence in this industry will once again strengthen," says La Grange.