The survey comprised 1002 face-to-face interviews with members or beneficiaries who are significantly involved in decision-making regarding healthcare expenditure in the household, revealed that three quarters of respondents felt that their medical schemes were too expensive.
Margaret Hulme, head of Healthcare Consulting at OMAC Actuaries & Consultants, says that this is probably because many members are on too rich an option for their benefit needs. "It seems that members are adopting a 'rather safe than sorry' approach when selecting medical schemes and options, instead of trying to improve their understanding. This would exacerbate the feeling that medical schemes are expensive," she says.
Furthermore, cost-saving initiatives by schemes, particularly the introduction of Designated Service Providers (DSPs), actually have a negative effect on member perceptions of the scheme. Hulme says the current direction taken by schemes to control costs is to introduce more controls, e.g. the appointment of DSPs. This could be detrimental to schemes unless they can alter member perception in this regard. "Members do not like DSPs. This is not because of any problem with the concept itself, but rather owing to the perceived lack of freedom of choice - particularly when it comes to GPs."
Hulme explains that although 84% of members believe that their scheme offers good value for money, they also believe that more expensive options with more benefits and without DSPs are providing the best value for money. This is in spite of the rich set of PMBs that must, by law, be provided by all schemes and benefit options.
"In reality, the options with lower benefits and DSPs are probably providing the better value for money because these options generally contain a healthier pool of lives and must also cover the full list of PMBs," she says.
Members surveyed prefer higher monthly contributions and fewer co-payments to lower monthly contributions and more co-payments. This may explain part of the preference for more comprehensive and expensive options.
Hulme believes that improved understanding would close the gap between what members expect and what they get. "A lack of understanding is driving the current unhappiness they experience; mainly owing to their expectations being higher," she says.
Hulme advises schemes to communicate the positive reasons for controls such as DSPs in order to avoid alienating members. However, she warns that current methods of communication are not effective. According to the results of the survey, only 44% of members read their member guides thoroughly. Nearly half of members said that they did not make any use of their broker, member guides or the internet to improve their understanding and decision-making ability. Call centres were the worst-rated area of service, which might contribute towards members' lack of understanding.
As a result of ineffective communication methods, awareness of medical scheme offerings is alarmingly low among members. "According to the survey, one third of members said they did not know what they were covered for and that they only find out what they are covered for once they claim. A third of members complained that they found the benefit structure confusing," says Hulme.
Furthermore, the fact that members are not reading their member guides is causing unnecessary discontent among members. For example, members who reported unhappiness with the claim payment of a recent major event were asked what they would do differently next time in order to limit their out-of-pocket expenses.
"Interestingly, the majority of these suggestions would have been unnecessary if members had read the member guide or had had a better understanding of the cover offered by their scheme and the administration procedures employed by their scheme," says Hulme.
Switching to other schemes or options does not seem a prevalent choice. "Of the members surveyed, 91% had not changed scheme or scheme options in the last three years - however, when comparing the price and their benefits of their old versus the new options, it emerged that members favour better value rather than lower cost," says Hulme.
