New generation of medical insurance cover
Staff Writer | Friday May 8, 2015 15:20
In this interview, Symphony Health Managing director Rose Tatedi explains to BusinessWeek how the their ‘new generation’ or savings type scheme might be the most suitable medical insurance cover option
BusinessWeek: How has Symphony performed in the market since its launch?
Tatedi: Symphony Health was officially launched in May 2013 and since then, it has invested significantly in creating awareness in the market, at the same time attracting members into the Scheme. Whilst there is still a lot to do, we are pleased to state that there is significant level of awareness about the Scheme and its offering. To this extent, a number of organisations are now aware of and have understood our value-proposition and the fact that we are indeed a viable alternative in medical aid provision.
The uptake is increasing though we would be much happier with a faster growth. Medical aid is a business of numbers and as such, until we reach the critical masses we require, we cannot relax. We are cognisant of the fact that it will take time for people to fully understand our product (which is different from the others) and get comfort that they can indeed trust us as a new entrant into the market; but thus far we are happy with what we have achieved and hope to achieve going forward.
BusinessWeek: Can you please share on the financial performance of the company?
Tatedi: At this point in time, we are not in a position to share our financial results with the general public. However, what we can state is that we have been able to pay our financial obligations, including the claims from both Members and Service providers.
When it comes to the Service Provider Tariffs, ours are the most competitive. Furthermore, as part of our risk management strategy, we have put in place a reinsurance cover (for hospital claims) which provides peace of mind to the members that though our Scheme is relatively new, they would be able to pay that high hospital claims when they come through.
BusinessWeek: Can you briefly describe the products offered by Symphony?
Tatedi: Symphony Health offers a different type of product to the market. Unlike other schemes that are “traditional”, Symphony Health is a new “generation medical aid scheme”. The difference between a traditional scheme and a new generation mainly lies in the fact that in a traditional scheme, all the premiums go towards risk and are pooled together for members. On the other hand, in a new generation scheme, part of the premium (25% for Symphony Health) goes towards a Medical Savings Account (MSA) and the remaining portion (75% in our case) goes to the risk pool.
The MSA is used to pay for outpatient services e.g. doctor consultation and the risk pool is used to pay for inpatient services such as hospitalisation expenses.
In the event any portion of the MSA is not spent in a given financial year, it is carried forward to the next financial year.
When a member terminates their membership, they are refunded all his accumulated Savings. The risk pool works in the same way as the traditional schemes and is not refundable.
BusinessWeek: Any other difference to the traditional schemes?
Tatedi: We are different in that we are an innovative and customer-centric medical aid company. In the two years that we have been in operation, we have made a number of changes to our benefit offering as a response to feedback from our existing and potential members.
These changes include introduction of a fourth benefit option, changes to our legal cover, changes in our membership application forms and changes in child dependants premiums. We offer our members more than the medical aid cover as we also offer legal and international travel cover; and road assistance that comes as an add-on benefit to the legal cover. Furthermore, our premiums are age-based; the younger members pay less in terms of premiums.
Otherwise, our benefits are comprehensive and in some instances much better that the competition and examples include maternity, hospitalisation and optical benefits.
BusinessWeek: We understand there has been other adjustment to the claims procedures! Tatedi: It is not really changes in claims procedures, but underwriting processes. When we started in 2013, we did not have waiting periods for some categories of benefits for those that would be joining Symphony Health from other recognised medical aid schemes. These benefits included optical and maternity benefits. However, from experience, we noted that one would join the Scheme and after a month of membership, they would for example ask for pre-authorisation of say P5,000 spectacles though by then they would have contributed only one month premium. With regard to maternity, we were getting a significant number of expectant women wanting to join Symphony Health, mainly because of the rich Maternity Benefit we have. This obviously posed a risk of having to pay significant claims during the initial months of one’s membership, which were not matched by significant or reasonable premiums. In order to manage the risk, we had to introduce waiting periods in these categories to mitigate the risk. The other change that has been approved by the board but is still to be implemented is the requirement for all applicants’ 55 years and above, to undergo a medical examination as part of the application process.
This decision was made mainly because not all applicants disclose all pre-existing conditions and this is a risk to the scheme.
As a result, it is expected that the medical exam report will provide the scheme with the full medical history and condition of the applicant to ensure that underwriting is done with full information about the applicant such that where applicable, the necessary waiting periods are instituted.
BusinessWeek: How has the tighter economic environment affected you?
Tatedi: To some extent it has, as we see memberships being terminated as a result of companies closing down and others terminating as they can no longer afford the premiums as they are either no longer employed or have moved to a low paying job.
BusinessWeek: Do you think Batswana fully understand the importance of medical insurance?
Tatedi: A large majority of Batswana still does not understand the importance of medical aid and even those on medical aid; many of them do not understand what they are really entitled to in their medical aid cover.
More often than not, when one has the need to use the medical aid, that is when they will ask what their entitlement is. As Symphony Health, we have taken a deliberate step to educate the market about the importance of medical aid. This process started last year with media training as the media is the one that takes the information to the public.
Through the training, we wish to equip the media with the necessary skills and understanding of among others, the terminology used in the industry, how to choose medical aid, and responsibilities of the member.
Hopefully we will do the training on a regular basis. Furthermore, as we engage with members and potential members, either as groups or individually and also in their own offices or through the media, we educate them on a number of issues regarding the industry.