Simeka Health’s client base reflects healthcare industry trends.
Research conducted within the Simeka Health client base indicated a clear trend of employers relaxing compulsory medical scheme participation policies to allow more freedom of choice and access to more affordable alternatives.
This trend is confirmed when looking at industry wide medical scheme memberships and the shift towards more affordable healthcare solutions. Over the past decade, medical scheme memberships remained flat as younger people defer the age at which they join and some employers stepping back from guiding/subsidising access to medical schemes.
Several alternative health solutions have entered the market to fill the gap left by decreasing medical scheme memberships. These range from on-site clinics to primary health insurance, employee assistance programmes (EAPs), corporate nurses, and virtual consults. These solutions make it more cost effective for employers to offer some form of healthcare to their employees, but also complicates the employer’s process of deciding what is the correct product mix and how to extract cost and health outcome synergies across complementary health solutions. Companies such as Sanlam, through Sanlam Corporate Wellness, is developing integrated solutions for employers to simplify the advice process and pre-package solutions designed to extract these cost and health outcome synergies.
This trend is confirmed for the South African medical scheme industry as a whole when observing membership trends published in the Council for Medical Schemes (CMS) Report of 2021, indicating that only 14.95% or 8.9 million South Africans are covered by medical schemes. Over 50% of these beneficiaries are dependants on either their spouse or parents’ cover and 9% of this group are over the age of 65 or pensioners. That means that approximately 4.5 million principal members, which is only 25% of the 16 million economically active South Africans, buy medical aid.
An analysis of Simeka Health’s medical scheme clients shows that almost half of employees are not participating in a medical scheme. This does not take employees into account who are covered by medical schemes where their spouse is a principal member.
In addition to the above, there has been a reduction in employers who make participation in a medical scheme a compulsory condition of employment. Even the COVID-19 pandemic could not reverse this trend. It can be argued that had it not been for COVID-19, the shrinkage percentage could have been worse.
It is clear from Graph 2 that more employers are making employee participation voluntary. This is a worrying trend as many employees (specifically the younger ages) elect to not join the medical scheme. Often, these younger employees do not understand that waiting periods and Late Joiner Penalties can be applied should they wish to join at a later stage when they need the cover.
Both Simeka Health’s client base and industry data suggests good growth in the numbers of primary care as an alternative to medical scheme cover.
In addition to low corporate wellness take-up by employers, employees do not take advantage of the value these services provide in terms of preventative care and/or early detection leading to early disease management if a condition already exists.
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