Customer satisfaction at six-year low: index

The latest South African Customer Satisfaction Index (SA-csi) for Medical Schemes reveals the gap between what customers want from their medical schemes and what they perceive to receive in return for their premium has been steadily widening since 2019.

According to the SA-csi, a study which is conducted by Consulta on the overall satisfaction of members of the country’s largest open medical scheme providers, overall customer satisfaction of members of SA’s largest medical schemes has sharply declined in 2021 with some recording their lowest customer loyalty scores over a six-year period. The study includes Bestmed, Bonitas, Discovery, Medihelp, Momentum and the only closed medical scheme included in the survey, GEMS.

The 2021 index found that Bestmed emerges as the leader on overall customer satisfaction, with all other schemes performing on or below industry par. Ineke Prinsloo, head of Customer Insights at Consulta, says these findings are significant, particularly as medical schemes enter the renewal season when they announce their benefit changes and premium increases for 2022.

“With customer satisfaction levels and loyalty scores at one of their lowest points in years, and with consumer price tolerance at equally low levels, there’s likely to be significant shifts of members to lower-cost benefit plans and between medical schemes as customers try to balance value, quality, necessity and affordability.”

She says what is notable is that the customer expectation is not adjusted commensurate to the buying down in benefits. In other words, while members look for cheaper options, they don’t “buy down” on their expectations and this is where the incongruence with medical schemes increases.

“The impact of the pandemic on household income looms larger than ever, and as reluctant as members are to cut their medical scheme contributions, many have no other recourse. The decline in customer expectations of their medical schemes in the latest index is a worrying trend. Lower expectations should not

be misinterpreted as a positive outcome as a decline in this metric is typically the driver of drops in all other metrics of customer satisfaction including overall quality — as perceived by the customer — meeting their needs and reliability.”

This drop in expectations, she says, could be a precursor to more significant numbers of people opting out entirely or downgrading their benefits to basic core plans as they don’t perceive their current use as meeting their requirements or being reliable in their time of need. “There is a definite disjoin between quality and value versus price paid,” she says.

The downgrading or opting out trend is already putting the funding model of medical schemes under pressure given that schemes operate on the principle of social solidarity where all members contribute equally to a pool of funds, expecting that they will all derive equal utility value from the scheme.

“The latest index shows healthy and younger members with lower or even minimal benefit utilisation are least satisfied and loyal,” says Prinsloo. “Without focused intervention from medical schemes to address the drivers of customer satisfaction in this key demographic, medical schemes will soon find the pool of funds to subsidise older, less healthy, higher utilisation members is shrinking, bringing the sustainability of the entire private health care funding model into question.”

Between 2000 and 2012, private health care costs doubled in real terms and, on the current trajectory, will have doubled again by 2028. Medical schemes carry the bulk of these costs and are required by law to cover prescribed minimum benefits (PMBs).

“SA faces a dire shortage of health care professionals which means most providers charge at rates way above inflation and way above what is sustainable for medical schemes or consumers,” explains Prinsloo. “To manage these hyperinflationary costs, schemes have established provider networks and capped the benefits members can claim for on lower cost options.”

But schemes and their members are between a rock and a hard place. “Members can’t rely on an overburdened and underresourced public health care sector, so having some form of medical scheme benefit is a necessity. Medical schemes have little choice but to keep increasing the cost of membership to keep pace with hyperinflation and high utilisation of benefits and reduce benefits by offering less comprehensive, core options at more affordable premiums.”

She says while medical scheme contributions increase every year to keep pace, the reality is that the benefits for members are decreasing. This means members are paying more for medical scheme membership but are also paying more for co-payments, out-ofpocket health care costs and penalty fees, especially if they don’t use a network or contracted health care provider.

“Medical schemes need to focus on customer experience and loyalty for all members, but especially healthier members who claim less,” she says, adding that the complexity of medical scheme benefits adds to the challenge of how schemes demonstrate value to customers who don’t grasp the regulatory environment.

“It is essential schemes address the discontent among a significant portion of their member base who are essential for the scheme’s financial

sustainability and viability.”

THIS DROP IN EXPECTATIONS COULD BE A PRECURSOR TO MORE PEOPLE OPTING OUT ENTIRELY OR DOWNGRADING