Report reflects medical scheme industry woes

THE private healthcare system in South Africa is failing consumers, and the medical scheme industry is unsustainable.

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The latest Industry Report for 2024 by the Council for Medical Schemes (CMS), released last week, confirmed for me these unpleasant truths.Medical scheme membership has been growing more slowly than the South African population for some years now, and the average age of membership is rising. Long-term prospects are looking poor unless the government and private sector can put their differences aside for the sake of the consumer. From my viewpoint, each is as bad as the other.

Healthcare providers should not be able to charge what they like. There is virtually zero control over the pricing of medicines, treatments and specialist consultation fees. Efforts by the government over the years to regulate pricing have gone nowhere. How the government can even think of National Health Insurance before tackling uncontrolled pricing is beyond my comprehension.

Too many unviable schemes

According to the report, the industry is consolidating to some extent, with the number of schemes decreasing. But there are still too many small, unviable schemes, while some of the larger ones are failing to exploit economies of scale to improve their offerings to members.

There were 71 schemes in 2024, of which 55 had restricted membership (serving a particular company or industry sector), and 16 were open. These numbers are down from 60 restricted and 23 open schemes in 2014. Only six schemes saw an increase in membership, including the biggest, the Government Employees' Medical Scheme (GEMS). The remaining 65 schemes, including the large open schemes, saw membership declines, with the drops ranging from 5% to a staggering 36.6%.