It is a fact of life that few members of medical aids understand how their schemes work or are confident enough to challenge the decisions made by their trustees. This is true of medical matters in general, perhaps because the average member does not feel qualified to challenge authority figures in fields as complex as medicine or private healthcare funding. Patients’ confidence in their doctors’ healthcare advice tends to be extended to accepting their fees without complaint too.
And make no mistake, medical schemes’ rules and procedures can seem as complex and confusing as brain surgery; some would argue deliberately so.
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Whatever the reason for this, the upshot is that members tend to be both unengaged - apart from submitting claims and complaining when they are not paid out in full - and apathetic. Precious few even know they have a right to attend the scheme’s annual general meeting, let alone vote on matters as mundane as electing trustees.
But with tough times putting the squeeze on household finances, all that may be about to change. Just as there are signs that shareholder activism is starting to come of age in South Africa, with individual as well as institutional shareholders increasingly demanding accountability from board members and greater transparency on the part of management, so members of medical schemes are coming to the realisation that the funds collected by such schemes belong to them, not the trustees or administrators, and they have both rights and powers over how their money is spent.
The resolution passed by members of Discovery Health Medical Scheme at last month’s annual general meeting is therefore as welcome as it is unusual.
A majority of those who attended the meeting - barely more than 100 out of 2,4-million members - resolved that the scheme’s trustees actively seek to reduce administration fees over the next three years. They asked for a detailed breakdown of the R2,8bn spent on administration last year, instructed the trustees to commission an independent review of the value for money provided by the administrator, Discovery Health, and moved that the potential benefits of "regularly placing the administration and managed care contracts of the scheme out for tender in the open market" be investigated.
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