A leader in the South African health industry

The South African health insurance industry is under pressure from a turbelant financial environment and strict regulations.


The South African health insurance industry is under pressure from a turbelant financial environment and strict regulations. Mr Glen Sikosana, Marketing and New Business Development Executive of Medshield Medical Scheme, talks with us about the challenges faced by the industry and gives advice to people planning to sign up for a medical aid.

Please tell us about your background and rise to the top, and who have been some of your mentors?

I am a Medical Technologist by qualification and further acquired an MBA, majoring in International Marketing. I started my career serving in pathology laboratories for a short while and then had my sales breakthrough in the pharmaceutical industry in 1999. Starting in a junior position, I quickly moved through the ranks to a Specialist Senior Representative position and then branched out into marketing as a product manager in 2008.

My Dad and my brother were instrumental in my development. From an early age they taught me that discipline, tenacity and hard work are the pillars of success. In the working environment I was blessed to be mentored by April Roseweir; she taught me to be genuine when dealing with people. Frank Aswane was my mentor when I starting working in Sub-Saharan countries and the first lesson he taught me was ‘Adapt, be agile and flexible’ which helped me navigate my career.

What have been some of the keys to Medshield’s success over the last 50 years?

In my opinion there are three very clear keys to Medshield’s success. The first is sustainable partnerships. Medshield believes in our partners who deliver and support us when it counts the most. Secondly, Medshield continuously delivers on the brand promise. The Scheme’s value based offering is subject to members’ judgement; with our exceptional growth since 2017 it is evident that we are being judged favourably. The final key to our success is our ability to adapt with an intent to be relevant in an uncertain yet constantly evolving environment.

When deciding on a option/plan, what should one look out for?

Medshield Medical Scheme offers seven benefit options ranging from an affordable low cost option with network limitations to the most comprehensive benefit option. If you are in the market to sign-up for medical cover you should first and clearly outline your medical needs. This is where medical history comes in handy and can assist as a guide. Remember, people are aging every year which then suggest that your medical needs five years from now may have changed. Brokers are well trained to assist in this aspect.

After completing your medical needs analysis you should shop around for what is available in the market to fulfil your specific need. This second step will assist you in soliciting good value for money options. In real terms, hospital plans do not have GP visits or have very limited access, this means that the costs of GPs on this option would come out of the member’s pocket.

What are some of the common mistakes when choosing medical cover?

Due to economic pressures in South Africa people are tempted, if not forced, to think with their pockets about what they can/cannot afford. Yet expectations always remain high in proportion to what they are willing to pay. So typical mistakes would potentially include:

Signing up for the cheapest benefit option within a scheme. Buying on price always undermines the member’s medical needs. The member will therefore only experience the real opportunity cost at the time of wanting to access benefits or lodge a claim.

Being over or under insured. This can happen if a member does not do a proper needs analysis. On one end, a member can be insured above the actual risk coverage or they can have a gap in the actual cover needed.

Failing to declare medical history. Any important details of your medical history should not be kept concealed or undeclared at the time of buying anoption/plan. Keeping such information concealed will act against you at the time of claim settlement.

Failing to understand your benefit option. Member education is a major challenge in the medical scheme industry simply because benefit options are complex to explain to the ordinary man on the street, let alone the medical terminology.

What are the key challenges to membership growth within the healthcare industry?

The South African medical scheme industry is dependent on labour market movements. Therefore, one cannot speak about healthcare access in the current model without taking into account job losses and unemployment rates. The regulatory environment, in the form of the Medical Schemes Acts, presents a major limitation on schemes attracting the unemployed. This challenge comes from the prescribed minimum benefits, which are mandatory by law. It is therefore not a surprise that the total number of the covered lives in South Africa is not growing at a desired rate. Although the scope for expansion into uncovered lives is enormous, the market is highly competitive with very little variation between schemes and benefit options. Affordability of medical aid is a major concern in the industry and will remain as such for as long as the cost drivers (rising healthcare costs) are not efficiently, if at all, regulated. This includes hospitals, specialists and medicines costs.

With an impressive 7.4% membership growth in 2017, which of your products is most popular and why and what influenced the growth?

2017 was a great year for Medshield for a number of reasons. In a stagnant industry we managed to deliver an unbelievable growth. This was real growth as opposed to growth stimulated by amalgamations. 2017 also marked a significant milestone in the history of the Scheme as we managed to turn around a trend of deteriorating membership. We managed to conclude an elective AGM which saw a successful transition into a new Board of Trustees. The 7.4% growth was influenced by visionary leadership remaining focused on the goal, field intelligence in terms of what members need, and finally disciplined implementation of the strategy.

The majority of the new entrants come through our MediValue and MediPhila benefit options, although MediPhila is growing off a markedly smaller base. Interestingly, new entrants had on average a lower age than those who do not move from the respective options. These two options are definitely the most popular because members perceive them as value for money when compared to competitor options.

What are some of the key differentiators that set Medshield apart from the competition in a tight and highly regulated market?

Medshield’s ability to withstand turbulent times, especially economic challenges where members and/or consumers have to choose between bread or healthcare cover. This sets us apart from our competition. We have time and again proved that the Scheme is a viable healthcare partner who will remain a strong healthcare entity even in a turbulent environment. Our value for money products and the level of benefits members receive in return, ensure that we are able to fulfil our vision of ‘Caring about you towards a healthier nation’.

How is technology changing the future of medical aid plans?

Because of regulations around medical scheme products and the business of a medical scheme, there is very limited scope to innovate at an affordable price. The Medical Schemes Act indicates that a medical scheme’s non-healthcare expenses should remain under 10%. Therefore, innovation has been driven through augmented products in the form of loyalty offerings. These are merely additional features with built-in value and are intended to distinguish the core product (benefit option) from the competitor’s offering.

That being said, technology in the healthcare space is advancing. This is definitely a fact in relation to medicines and medical equipment. South Africa, and the world at large, has been exposed to isolated cases of innovative medical ideas and solutions. The main challenge is scalability of these technologies without compromising quality and human health.

For you, what does good leadership entail, and how to get the best out of one’s staff?

I have adopted a philosophy that says ‘follow me, I am right behind you’. It requires a great deal of trust in subordinates and leaves no room for micromanagement. This approach allows staff members that are at different levels of their management careers to be independent and results driven. Ultimately the measurement of good is evidenced by business success and the individual achievement of goals.

Are we seeing more transformation in the medical insurance sector, and what are the areas to improve?

The pronouncement of the Medical Scheme’s Amendment bill will drive the new era of transformation in the industry. The most crucial aspect of the bill was a proposal to introduce uniform tariffs for services and prohibit co-payments, potentially heralding a sea of change for industry players and consumers alike. Currently, each medical scheme negotiates its own rates with service providers such as hospitals and doctors. This really needs intervention in order to influence the ultimate cost of healthcare and potentially improve access.

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