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MEDICAL AID ADMINISTRATION, RISK MANAGEMENT AND TECHNOLOGY

AfroCentric primarily operates in administration and health risk management through Medscheme. Leading medical schemes in Southern Africa rely on the Group for effective, client-focused administration services. Furthermore, by recognising and managing clinical and financial risks for our client schemes, we may lower healthcare costs, reduce scheme contributions, and improve the quality of treatment.

OVER R2.7 BILLION IN CLAIMS COSTS WERE SAVED FOR OUR SCHEMES DUE TO MANAGED CARE PROGRAMMES (2020: R3.2 BILLION)

MEDSCHEME WAS AWARDED THE GEMS MANAGED CARE CONTRACT, AND THE POLMED CONTRACT WAS RENEWED

OUR AUTOMATION RATE HAS INCREASED STRAIGHT-THROUGH PROCESSING, WITH A 15% INCREASE IN SELF-SERVICE CHANNELS

AID FOR AIDS WON A DIAMOND ARROW AWARD IN THE CATEGORY FOR DISEASE MANAGEMENT (HIV/AIDS) FOR THE SECOND YEAR IN A ROW

AUTOMATION AND PROCESS IMPROVEMENTS HAVE ENHANCED OPERATIONAL EXCELLENCE TO THE BENEFIT OF SCHEMES AND THEIR MEMBERS

LOSS OF THE SASOLMED CONTRACT

Client scheme value under management (R'bn)
Revenue (R'm)
Operating costs (R'm)
Operating profit (R'm)
Overview

Medical schemes have transitioned from being solely claims administrators to actively monitoring their members' health. Furthermore, the ease with which members and healthcare professionals expect to interact with medical plans is now significantly influenced by the technology that is already a part of our daily lives. The COVID-19 pandemic has illustrated how quickly the healthcare environment can change, as well as the vital need for healthcare systems to be able to adapt and do so swiftly.

Our performance

The administration business, in particular, is concentrating on improving the operational delivery of services. Technology was used to enhance interaction with members and providers, including online and mobile technologies for their day-to-day administrative needs. Increased usage of automation, machine learning, and artificial intelligence have also been areas of focus.

Our capabilities in executing on our priorities
  • robotic process automation
  • agile project management
  • improved business sustainability
  • decision services
  • data-driven insights
  • data management
  • accuracy and consistency
Operations

The medical aid administration, health risk management, and technology cluster has remained focused on cost reduction through increased efficiency and an enhanced operating model. This included a 4% reduction in permanent staff per 1 000 lives while improving service levels. This has resulted in Medscheme achieving a positive budget variance while absorbing new costs.

Membership

Despite the reduction in the medical scheme membership base and/or members downgrading their medical aid options due to significant economic pressure in the current environment, the cluster was able to increase its operating profit by a pleasing 15.3%. This performance can be largely attributed to our stable and consistent fee structures, as well as new measures to enhance operational excellence and more effective cost controls.

Weighted scheme solvency grew by 39%, which is good news for the sustainability of our clients. We observed that during the pandemic, medical schemes continued to see considerably lower claims, owing to the deferral of discretionary and elective healthcare procedures. After the peak of COVID-19 in South Africa, a recovery in discretionary and elective healthcare utilisation is envisaged and is being included in our decisionmaking processes, particularly in managed care.

New contracts

Medscheme was awarded the GEMS managed care contract, which includes additional services previously not included in the managed care contract, such as HIV and maternity management, and enhanced medicine management services. The contract became effective on 1 January 2021. Pleasingly, the POLMED contract was also extended this year. Sasolmed, unfortunately, gave notice during the 2020 financial year, with effect from December 2020.

Health risk management

Successful collective bargaining was conducted on behalf of our schemes for hospital-based treatments, enabling the negotiation of reduced rates, thereby lowering the cost of care.

We continued to harness our Group-wide strengths through our integrated architecture, resulting in creative solutions that satisfy vital demands while enhancing healthcare savings. Smart Care is one such new solution, aiming to deliver a full managed care concept to lower members' health risks, detect risk quickly, and cover the cost of care in an efficient way. In addition, the programme's goal is to establish a supporting structure to deliver a comprehensive care plan and improve members' quality of life.

Innovation

Medscheme also concluded the development of a new Hospital Benefit Management system that enables digital engagement with providers and members seeking hospital authorisations. This system leverages the latest technology in decisioning and, when integrated with the claims decision engine, will make the hospital admission and claims process almost immediate at first submission.

VirtualCareTM is an innovative platform from Allegra that gives patients access to safe, affordable virtual consultations with registered medical professionals. Bonitas was the first to roll out VirtualCareTM through its mobile app, offering free virtual COVID-19 related consultations for all South Africans – including non-Bonitas Medical Aid members too. The team is working hard to keep improving this service, offering more people safe healthcare, and investing in various business solutions to deliver service excellence in real-time and on-demand.

The acquisition of DENIS enables us to focus specifically on cost-effective treatment and innovation in the dental treatment offerings to medical scheme members. In DENIS, we have gained a partner to fast-track our strategic business objectives and expand our expertise.

Outlook

To reduce the cost of care, we will maintain our focus on supporting members' health, with a greater emphasis on lifestyle risk management and mental wellbeing. We will also ramp up our work on the delivery of care. In addition, we are leveraging the lessons learnt during the COVID-19 pandemic to create more efficient and affordable digital models of care.

From an administration perspective, our focus is on customer service models that are excellent and equally leverage the accelerated digital transformation at this stage.

We are looking forward to the roll out of additional programmes in the new year and the benefits these will supply to members.

Information from the World Health Organization and South Africa's NDoH show that the proportion of visual impairment due to untreated cataracts is higher in emerging countries such as South Africa. In response, Medscheme introduced a network structure that aims to reduce the costs of these operations.

With an average cost of R30 000 per procedure and over 30 000 cases per annum, Medscheme observed significant data variations that point to inefficiencies in the value chain, which can be resolved through collaborations and models that are mutually beneficial to healthcare providers and customers.

"Through the network, members needing the procedure have the assurance of high-quality care while healthcare providers are assured of the member's affordability through the medical schemes," says Managing Executive of Medscheme's Clinical Risk and Advisory Division, Dr Lungi Nyathi. "Overall, the costs are stabilised, leading to greater access to care. By collaborating and finding sustainable interventions, we can prevent South Africa from lagging behind and ensure that cataract surgery waiting lists are reduced."

As the country moves towards NHI, coupled with the challenges around providing access to sustainable healthcare, and a need to ensure that healthcare providers can sustain their practices and bring much-needed skills to society, we encourage all role players to take part in this new approach and be open to ongoing engagements to further sustain healthcare in our society.

Initiatives like this, together with a collaboration with healthcare providers aimed at reducing costs, are important in responding to the health burden of our country.

 

Over the past year, Medscheme has observed an increasing trend in mental health-related hospital admissions. As a result, the Mental Health Project was launched to help manage the associated financial risk for our clients and ensure that members have access to the care they need.

Progress to date
  • Medscheme's online Mental Health Resource Hub was launched to support members in the understanding of, and self-management with regards to, their mental wellbeing. For more information, see http://www.medscheme.com/mental-wellness-resource-hub/
  • A select group of GPs participated in an online mental health upskilling course, which will enable a broader base of primary care providers
  • The Mental Health Screening Tool has been launched on the Mental Health Resource Hub to help members identify potential mental health strain or illness early