CMS raps medical schemes for splurging on AGM functions

South African medical aid schemes have been found to splurge on annual general meetings (AGM), with Sizwe Medical Fund the biggest culprit.

This is according to the Council for Medical Schemes' (CMS) report on the past financial year released this week.

“Of the 71 schemes, 33 incurred AGM-related expenses totalling R29.2m. The aggregate number of lives covered by the schemes that incurred expenditure amounted to 8.1-million, whereas those without AGM-related costs covered 850,248 lives.

“Sizwe Medical Fund had an extreme value with a relative ratio of 46, a substantial deviation from the benchmark value of four. Medipos Medical Scheme followed with a relative ratio of 20 and Engen Medical Benefit Fund and Motohealth Care at 11, indicating comparatively higher AGM-related expenditures.

“In identifying these schemes, particularly the Sizwe Hosmed Medical Fund, further exploration is warranted into the potential factors contributing to their exceptionally high AGM fees,” the report said.

A secondary list of schemes with relative ratios falling between five and nine included Foodmed Medical Scheme, University of KwaZulu-Natal Medical Scheme, TFG Medical Aid Scheme, Cape Medical Plan, SAMWUMed and Discovery Health Medical Scheme.

“While not as extreme as the first set of schemes, these entities also exhibit noteworthy relative ratios, prompting consideration for further investigation into the drivers of their AGM-related expenditures.

“The comparative analysis of these schemes against the computed benchmark provides a valuable perspective on the variations in AGM costs within the broader context of medical schemes,” the report said.

The CMS found AGMs have problems, including limited member awareness, accessibility barriers and perceived irrelevance, prompting the need for strategic approaches.

In 2022, large schemes constituted a substantial 96% of the overall spending, while medium and small schemes contributed modestly with 3% and 1% respectively.

“These proportions remained consistent throughout the review period, underscoring the enduring pattern of larger schemes' predominant role in the total expenditure.”

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