Most Medical Schemes fail to meet member expectations

Most schemes’ satisfaction continues on a downward trend, with exception to Discovery and Medihelp

The latest South African Customer Satisfaction Index (SAcsi) for Medical Schemes, conducted by Consulta, reports that South African medical scheme customers are the most satisfied with Discovery’s offering.

With an overall SAcsi score of 74.8, Discovery is well in line with the industry average of 74.2 and has improved its score marginally from 74.1 in both 2014 and 2015. Discovery overtook Liberty Health, which had merged with Bonitas during 2016. Medihelp achieved a SAcsi score of 72.6, significantly up from its score of 70.7 in 2015.

Satisfaction by Government Employees Medical Scheme (GEMS) members deteriorated further as members are the least satisifed. Its score fell from 74.3 in 2014 to 64.3 in 2017.

Bonitas scored 73.1, which was 2.1 points down from its 2015 score and almost three points down from its 2014 score of 75.9. Momentum fell to 72.2 from 75.6 in 2015.

“The decline in Bonitas’ score could possibly be attributed to its merger with Liberty Health. It could have put strain on the business as it would be managing a much larger member base,” says Consulta CEO and founder, Professor Adré Schreuder.

“Medihelp’s recent turnaround strategy seems to be paying off. While it previously offered low premiums, customers were often faced with surprisingly high co-payments. It has since increased premiums and moderated co-payments to make their service more predictable,” says Prof Schreuder. “GEMS, on the other hand, failed to meet its customers’ expectations (with a gap score of -5.2%), evident by the verbatim commentary on complaints and problems experienced by members.”

Now in its fifth year, the SAcsi Benchmark for Medical Schemes offers impartial insights into the South African medical schemes industry by blending a Customer Expectations Index, Perceived Quality Index and a Perceived Value Index to achieve an overall result out of 100. South Africa’s top five medical schemes are included in the industry index: Discovery, Bonitas, Medihelp, Momentum and GEMS. The sample included 1,757 consumers who were randomly selected for inclusion in the 2017 survey.

The SAcsi survey for Medical Schemes was not conducted in 2016, with the 2017 data measured against the 2015 and 2014 surveys.

“The medical schemes industry has one of the lowest overall satisfaction scores compared to other SAcsi surveys, as medical aid is one of South Africans’ most costly monthly expenses. Many customers experience poor or low value for money, with many referring to complex rules, exclusions and co-payments. It is often considered a grudge purchase,” says Prof Schreuder.

“Industry premiums increased by around 8 to 10%, which is well above inflation. Expectations around value for money will come under even more pressure when consumers are expected to contribute to the Government’s proposed National Health Insurance (NHI) if it is launched as expected in the coming years,” he says.

Overall customer loyalty is at its lowest for the industry, down to 66.7% in 2017, from 69.0% in 2015, and still below the 2014 score of 68.4%. This decline is true for all but Medihelp, whose score improved from 62.5% in 2015 to 68.4%.

A vital metric for medical schemes is the Net Promoter Score (NPS), which measures the likelihood that customers will recommend a brand to their family and friends, becoming promoters, compared to customers who would actively discourage a relationship with a medical scheme, known as detractors.

The industry achieved a low NPS of 11.7% compared to other sectors, meaning that people are less likely to promote these brands compared to other industries. Discovery achieved the highest NPS score of 13%, followed by Medihelp and Momentum, each scoring 12% and Bonitas, which scored 8%. GEMS scored an NPS of -18%.

The medical schemes were also measured against the Treating Customer Fairly (TCF) code, used to measure how well service providers have incorporated customer engagement outcomes into their brand culture. For the last five years, the SAcsi has shown a significant statistical correlation in perceived fairness and customer satisfaction.

Discovery was the highest performer on this metric, with a TCF score of 76.5 compared to an industry average score of 75.8. In line with the SAcsi index score and other metrics measured, GEMS had the lowest TCF score of 69.8.

“While customers indicated various complaints, the primary pressure point is around the cost of cover and the payment of claims. This is amplified by the perception that medical schemes continue to increase premiums while reducing benefits,” concludes Prof Schreuder.

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