Top Companies asked NMG-Levy CEO Andrew Sykes what medical schemes would look like in five years and how this should influence a person's choice of scheme today.
Sykes says the largest schemes will be able to negotiate better deals with hospital and doctor networks and hence price their plans more competitively. The big schemes will get bigger and the small ones will find it harder to survive.
In choosing a scheme for the next five years, members should look at:
- Scheme size. Schemes with fewer than 60 000 members may battle to get the same economies of scale as the larger schemes.
- Rate of growth. Growing schemes are generally doing things better than average.
- Quality of administration. Brokers can testify to service indicators such as a scheme's claims payment times, query rates and membership lapse rates.
Other clear market trends that members should be alert to include:
- A continued move towards medical saving account-type plans;
- The growth of plans that make use of prepaid or capitated deals with hospitals and doctors to reduce costs;
- Copayments and deductibles (members paying a small proportion of the bill) ;
- Medicine formularies (a list of medicines covered by the plan); and
- Average annual contribution increases of 15%-17% over the next five years.
