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
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Page 3
Bonitas Member Magazine 2016 Issue 4