Bomaid strives on with service excellence
Pauline Dikuelo | Friday August 11, 2017 15:26
BusinessWeek: What schemes do Bomaid offer and how many members does it have?
Mokgosana: Bomaid is the largest open medical aid fund in Botswana commanding 51% market share, with over 39,000 principal members and 85,000 total lives. The fund offers health insurance to corporate and individual members across various income and age groups with the most innovative and diverse products, which are highly competitive and affordable. The fund has a number of inpatient and outpatient schemes for a broad range of conditions.
BusinessWeek: What is Bomaid’s strategic focus in terms of product offering?
Mokgosana: Bomaid has recently developed a strategic focus aimed at positioning ourselves as companion to our clients to assist them in all their healthcare needs. In fact, the fund’s new vision is to be a companion for healthier, happier lives. We aim to continue to differentiate our product offerings through an improved value proposition.
It is key for us to address the unmet client requirements by improving the value proposition to enhance all products through the intergration of wellness enhancements.
BusinessWeek: Does Bomaid have plans to go beyond medical aid insurance perhaps going into a clinic?
Mokgosana: No. However, Bomaid currently has investments into a company that is in the emergency medial services, pharmaceutical and clinics business. The strategic focus of the fund will be to continue to offer diverse and competitive products in medical insurance through innovation and service excellence.
BusinessWeek: What is the stability of the fund considering that many medical aid funds are falling apart?
Mokgosana: The fund has been very stable despite the economic challenges that are adversely affecting membership growth, along with a healthcare inflation that is higher than domestic consumer price index. The fund still has robust financial reserves that will be helpful through these challenging times and has more than adequate reserves to cover claim costs.
BusinessWeek: What impact does non-communicable diseases have on the fund?
Mokgosana: These are lifestyle conditions that are prevalent in today’s society and we have noted that we have had incidence occurrence of 15.1% of our membership with chronic conditions like hypertension, diabetes and cancer. These have a serious impact on the fund such that in 2016 medication costs for NCC, excluding consultations and hospitalisation account for seven percent of total claims payout.
However, as a medical aid fund we have been proactive in ensuring that we position ourselves to partner with our members to meet their short and long term wellness needs. Through product offerings such as the Managed Care programme – that aims to provide patient oversight of members with these chronic ailments.
In order to improve the quality of lives of our members and to assist them in living longer, happier, healthier lives, we have been encouraging our members to test for these chronic conditions so as to enrol on our managed care programme for treatment earlier. We expect that through this, members will also live longer once diagnosed with these conditions.
We have also introduced generic reference pricing on our drugs in order to reduce the burden of the cost of drugs and out of pocket payments for our members.
BusinessWeek: What threats do the fund face?
Mokgosana: There is a proliferation of new medical aids in the country. Currently there are 11 medical aid funds in the country, which suggests that this may be too many players for a market our size. The positive, however, is that this benefits the members by offering them access to a wider variety of products and services. The prevailing economic conditions also present a challenge in that we have seen a significant number of job losses in the recent past. This tends to affect the insurable lives in the market and may have adverse financial effects where membership numbers start to wane. The reduced buying power of some of the employees is also a concern since a large portion of the workforce contribute partly or wholly to medical insurance. Since medical aid tends to be a grudge purchase, people tend to sacrifice their insurance when they have less disposable income.
Healthcare insurance also presents a challenge since it tends to be higher than consumer price index (CPI). This creates a challenge for funds where the market inflationary adjustments to be aligned to CPI. As at the end of 2016, healthcare inflation was at five percent while consumer price index was at 2.8%.
BusinessWeek: Tell us about the recent price increment, why now and what does the fund intends to achieve?
Mokgosana: In determining price increases medical aid funds typically take into account utilisation patterns, product enhancements and medical inflation. This is an interative process that is embarked upon at the end of every year in collaboration with our actuaries.
In arriving at the magnitude of the adjustment, we consider the above for the year that is ending and adjust for the following year. Generally, the adjustments will differ among member groups depending on their utilisation patterns. The overarching principle in arriving at these is that the fund must remain financially sustainable.
BusinessWeek: Has Bomaid ever considered listing on the Botswana Stock Exchange?
Mokgosana: No. Bomaid is registered as a not-for-profit society owned by its members and would not be able to pay out dividends if it were to list.