Bonitas Member Magazine December 2016 | Page 4

Looking ahead to a stronger, healthier 2017 2016 has been a tough year for the healthcare industry. Increases in interest rates, inflation and basic cost of living have resulted in significant financial strain on consumers, already burdened with high personal debt levels. These factors coupled with a fluctuating Rand, a flirtation with a junk status credit rating and adverse global developments such as Brexit, have painted a bleak picture for the economy. Over the past decade medical inflation has ranged between 3 and 5% higher than the Consumer Price Index. The main reasons for this increased expenditure have been private hospitals, specialists and medicines. This is compounded by increased costs for PMBs. It is estimated that 82% of physicians order more tests and procedures than are medically necessary – and almost on a daily basis. Managed care initiatives aimed at actively managing disease, ensuring the coordination of care, strategic purchasing and wellness will go a long way in managing the increasing disease burden and contributing to the continued sustainability of the current healthcare funding model. Fraud, wastage and abuse of medical aid benefits is a serious challenge that seriously hampers efforts to solve one of the biggest challenges facing our country – providing affordable, quality healthcare to all South Africans. This makes an integrated approach to fraud essential. It is estimated that medical aids lose between R9 and R19 billion rand every year due to fraud, abuse and waste. Our partnership with Helios IT Solutions and international analytics software company FICO, has put Bonitas at the forefront of the industry’s fight against fraud, wastage and abuse. We estimate that this new partnership could bring about potential savings of 8.7% of all claims paid. The local healthcare industry continues to follow a global trend of mergers and amalgamations; a trend that is expected to continue. This is a result of various developments in the industry, including optimising economies of scale, weathering economic storms and a population with a high burden of diseases. Small to medium schemes have been amalgamated into bigger schemes, mainly because their risk pools were not big enough to absorb the claims’ propensity of members. Our amalgamation with LMS will have a positive impact, allowing us to negotiate more efficiently with various providers. This may potentially result in lower fees, higher service levels and better returns over the long term. This year, Bonitas was awarded some of the industry’s most prestigious awards: • 2016/2017 ICON Brands Survey Winner of the Medical Aid category • Titanium Award for excellent service to members from the Board of Healthcare Funders • 2nd place in the GTC Medical Aid Survey Our current financial indicators are within legislated minimums. We boast R3 billion Rand in reserves and low expense ratios – testament to our affirmation to act in the best interest of our members at all times. However, with increasing healthcare inflation and bleak economic times projected for South Africa, we do foresee a high-claims cycle continuing. Rest assured, we have a range of strategies in place to address this and ensure we continue to provide you with access to affordable, quality healthcare. We wish you and your loved ones a happy and healthy 2017! Kind regards Bonitas Medical Fund Tell us how you feel Share your stories about how Bonitas Medical Fund has impacted on your life and it could be featured in our next Member Magazine. Email your stories to [email protected] Page 3 Bonitas Member Magazine 2016 Issue 4