Slow economic growth has affected the affordability of healthcare in SA
As a result of a rapid increase in the number of mergers and closures, the number of medical schemes has declined between 2000 and 2017, according to analysis from South African consultancy Alexander Forbes. The existing schemes now have an increasing pool of resources at their disposal.
South Africa’s economy has been struggling in recent years, resulting from a combination of political instability and a disproportional reliance on the oil and commodity trade, which has resulted in substantial dents to the country’s revenues after a dip in global oil and commodity prices in 2014.
The sluggish economy has had an impact on all sectors, including healthcare as per new analysis from Alexander Forbes’ Healthcare division. According to the firm, the number of medical schemes in South Africa stood at only 80 in 2017, which is substantially lower than the number in 2000.
The slow down has been concentrated in the latter stages of the period in question, particularly since 2016. While the number of principal members in the healthcare sector grew by 1% between 2015 and 2016, the growth rate fell to 0.5% between 2016 and 2017.
As per the firm, the decline in the number of schemes has corresponded with a substantial increase in the costs of healthcare. Affordability has been falling constantly, which has had repercussions as far as on the demographic constitution of the country. According to Zaid Saeed, a specialist at the firm, the dip in affordability has been accompanied by a decrease in the family size.
“For those in formal employment private medical cover is usually a condition of service, but in a struggling economy, members are removing one or more of their children from cover before cancelling their own membership. Overall, the demographic profile and financial strength of the industry remain stable,” he said.
”In the open schemes industry, the sustainability index for the top 10 schemes has improved since 2006, meaning that the medical schemes industry has become stronger,” he added. A number of consulting firms in the country have been working to develop innovative solutions for the healthcare sector.
