Medical scheme pricing is not an affordability crisis

Varsha Vala, CEO and principal officer at Medihelp Medical Scheme

Speaking at Navigating the Medical Aid Crisis in South Africa, a recent industry round-table hosted by Total Reward Knowledge Hub in collaboration with Medihelp, Vala explained that businesses can overcome the medical scheme affordability crisis by transitioning from reactive healthcare funding to proactive, AI-driven preventive wellness models. This approach addresses rising contributions by shifting the focus from managing chronic illness to early and data-driven preventive measures.

Moderated by Norma Mazibuko, partner at Bowmans, the round-table also featured insights from Riefdah Ajam, general secretary of the Federation of Unions of South Africa (Fedusa), and Dr Reinder Nauta, executive chairperson of the National HealthCare Group.

Dismantling the 'sickness system'

As an industry, healthcare providers have spent decades building, funding, and perfecting a legacy 'sickness system' rather than a true healthcare system. According to Vala, “traditional models are entirely reactive: schemes wait for an illness event to occur, authorise a hospital stay, and pay the subsequent claim”.

That reactive cycle comes at a price, and it isn't arbitrary. Medical schemes do not randomly decide to inflate their premiums. The curve is driven entirely by utilisation. South Africa is witnessing an unprecedented surge in chronic lifestyle diseases. Conditions such as diabetes are now among the leading causes of death in the country and rank as its fastest-growing chronic burdens. When the workforce transitions from preventive health into long-term chronic illness, the costs shift drastically towards specialist interventions and hospitalisation.

Catastrophic human cost

The financial cost of corporate inertia is massive, but the human cost is catastrophic.

Absenteeism and presenteeism are stalling the economic engine. Yet, if you ask the average employer about the actual baseline health status of their employees, the room falls silent.

Working towards prevention

This trajectory is not inevitable.

The future model of corporate wellness must prioritise person-centric, continuous healthcare engagement rather than waiting for an emergency room admission.

“To achieve this, organisations must focus their energy on preventive care to catch serious illness before it escalates into a medical scheme claim. Artificial intelligence makes this possible: by moving from raw actuarial predictions to prescriptive analytics, businesses can map out workforce health vulnerabilities and intervene before problems take hold. This means identifying adverse health risks hiding around the corner and giving employees a literal script for well-being before a claim happens,” said Vala.

Companies must also maintain continuous engagement, implementing routine health check-ins (ideally of a digital nature to cover both on-site and work-from-home staff) so that employee well-being is monitored long before an emergency room admission is ever needed.

A framework for meaningful access

Employers can't afford to sit around and do nothing, but they also can't afford to break the bank. The path forward requires a structural shift towards an integrated total reward framework.

To build a resilient workforce, an upgraded corporate healthcare model must actively do the following:

• Cultivate employee health: Shift standard operating procedures to actively build physical resilience within the workforce;

• Pre-empt claims: Direct organisational energy towards early intervention rather than reactive treatment;

• Personalise care: Structure health benefits to be person-centric rather than relying on generalised or rigid corporate packages;

• Stay engaged: Build regular touchpoints into the employee experience so well-being is tracked as a matter of course, not only in a crisis; and

• Put data to work: Use predictive modelling to flag risk early and act on it before it becomes a claim.

The industry must look past legacy top-tier medical aid constructs and embrace innovative primary care models. Real-world, low-cost models – starting from as little as R200 per employee – can democratise healthcare access for the millions of workers who are currently entirely uncovered.

From HR conversation to lived crisis

“Providing healthcare access to the workforce is no longer a siloed HR conversation. Affordability is not a future threat; it is today's lived crisis. By shifting corporate toolsets towards preventive care, outcome-based health surveillance, and modular primary health portfolios, South African businesses can finally secure both their financial bottom lines and the human lives that power them,” Vala concluded.