Report Coverage
The report on the medical aid funding sector describes the current market, the latest regulatory developments and discusses factors influencing the success of the sector. The report profiles nine medical fund administrators and 23 medical aid companies including market leader, Discovery Health which increased its market share in the open medical schemes segment from 52.4% in 2013 to 53.4% in 2014, and the Government Employees’ Medical Scheme (GEMS), the largest of the restricted medical schemes.
Medical Aid Funding Sector
This report focuses on South Africa’s medical aid funding industry. The sector comprises 83 registered medical schemes, 23 open and 60 restricted, and currently serves almost 8.8 million beneficiaries. With scheme contributions of R140.2bn and healthcare expenditure of R124.1bn for the financial year ending 31 March 2015, the industry plays a critical role in South Africa’s private health sector, which is currently the subject of a Competition Commission inquiry.
Consolidation and Growing Pressure
During the past fifteen years, the South African medical aid funding industry has consolidated, with numerous small medical schemes amalgamating with larger schemes. Between 2000 and 2015, the total number of registered medical schemes decreased by 42%. According to the Council for Medical Schemes (CMS), consolidation is viewed as “a response to market forces and is not necessarily a negative development or an indication of instability in the South African medical schemes environment.” However, the medical aid funding industry is a sector under increasing pressure. Regulatory uncertainty continues to undermine the industry. Challenges identified by stakeholders include demarcation regulations and regulations governing Prescribed Minimum Benefits (PMBs). Many role players have called for a review of regulations relating to solvency calculation, risk equalisation and governance. While the number of beneficiaries receiving treatment for chronic diseases rises, the number of new members is decreasing, a trend that is expected to continue. Role players have cited unemployment and the lack of disposable income as the major contributing factors.
Historical Reports
Table of Contents
| PAGE | ||
|---|---|---|
| 1. | INTRODUCTION | 1 |
| 2. | DESCRIPTION OF THE INDUSTRY | 1 |
| 2.1. | Value Chain | 3 |
| 2.2. | Geographic Position | 4 |
| 3. | SIZE OF THE INDUSTRY | 6 |
| 4. | STATE OF THE INDUSTRY | 11 |
| 4.1. | Local | 11 |
| 4.1.1. | Corporate Actions | 15 |
| 4.1.2. | Regulations | 16 |
| 4.1.3. | Enterprise Development and Socio-Economic Development Initiatives | 19 |
| 4.2. | Continental | 21 |
| 4.3. | International | 22 |
| 5. | INFLUENCING FACTORS | 24 |
| 5.1. | Economic Environment | 24 |
| 5.2. | Government Intervention | 25 |
| 5.3. | Input Costs | 26 |
| 5.4. | Commercial Health Insurance | 28 |
| 5.5. | Managed Health Care | 28 |
| 5.6. | Technology, Research and Development (R&D) and Innovation | 29 |
| 5.7. | Labour Resources | 31 |
| 5.8. | Environmental Concerns | 33 |
| 5.9. | Cyclicality | 34 |
| 6. | COMPETITION | 35 |
| 6.1. | Barriers to Entry | 36 |
| 7. | SWOT ANALYSIS | 37 |
| 8. | OUTLOOK | 38 |
| 9. | INDUSTRY ASSOCIATIONS | 39 |
| 10. | REFERENCES | 39 |
| 10.1. | Publications | 39 |
| 10.2. | Websites | 40 |
| APPENDIX 1 | 42 | |
| Registered Medical Schemes – 2014/2015 | 42 | |
| APPENDIX 2 | 44 | |
| Medical Scheme Administrators | 44 | |
| APPENDIX 3 | 45 | |
| Managed Care Organisations (MCOs) – 2014/2015 | 45 | |
| COMPANY PROFILES – OPEN MEDICAL SCHEMES | 48 | |
| BESTMED MEDICAL SCHEME | 48 | |
| BONITAS MEDICAL FUND | 51 | |
| DISCOVERY HEALTH MEDICAL SCHEME | 53 | |
| FEDHEALTH MEDICAL SCHEME | 56 | |
| KEYHEALTH MEDICAL SCHEME | 58 | |
| LIBERTY MEDICAL SCHEME | 60 | |
| MEDIHELP MEDICAL SCHEME | 62 | |
| MEDSHIELD MEDICAL SCHEME | 64 | |
| MOMENTUM HEALTH | 66 | |
| SIZWE MEDICAL FUND | 68 | |
| SPECTRAMED MEDICAL SCHEME | 70 | |
| COMPANY PROFILES – RESTRICTED MEDICAL SCHEMES | 72 | |
| BANKMED MEDICAL SCHEME | 72 | |
| CHARTERED ACCOUNTANTS MEDICAL AID FUND | 74 | |
| GOVERNMENT EMPLOYEES MEDICAL SCHEME | 76 | |
| LA-HEALTH MEDICAL SCHEME | 79 | |
| MOTO HEALTH CARE | 81 | |
| NEDGROUP MEDICAL AID SCHEME | 83 | |
| PLATINUM HEALTH | 85 | |
| PROFMED MEDICAL SCHEME | 87 | |
| SAMWU NATIONAL MEDICAL SCHEME | 89 | |
| SASOLMED MEDICAL SCHEME | 92 | |
| SOUTH AFRICAN POLICE SERVICE MEDICAL SCHEME | 94 | |
| TRANSMED MEDICAL SCHEME | 96 | |
| COMPANY PROFILES – FUND ADMINISTRATORS | 98 | |
| AGILITY HOLDINGS (RF) (PTY) LTD | 98 | |
| DISCOVERY HEALTH (PTY) LTD | 100 | |
| MEDSCHEME LTD | 103 | |
| METROPOLITAN HEALTH CORPORATE (PTY) LTD | 106 | |
| MMI HEALTH (PTY) LTD | 108 | |
| PROFESSIONAL PROVIDENT SOCIETY HEALTHCARE ADMINISTRATORS (PTY) LTD | 110 | |
| PROVIDENCE HEALTHCARE RISK MANAGERS (PTY) LTD | 111 | |
| SECHABA MEDICAL SOLUTIONS (PTY) LTD | 113 | |
| STRATA HEALTHCARE MANAGEMENT (PTY) LTD | 115 | |
| UNIVERSAL HEALTHCARE ADMINISTRATORS (PTY) LTD | 117 | |
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