Medical schemes’ customer satisfaction levels reach six-year low

Medical schemes saw customer satisfaction hit a six-year low in 2021, with the gap between what customers expect and what they think they get for their premiums and loyalty steadily widening since 2019.

According to the findings of the latest South African Customer Satisfaction Index (SA-csi) for Medical Schemes conducted by Consulta, Bestmed emerged as the leader in overall customer satisfaction, with all the other largest open medical scheme providers, Bonitas, Discovery, Medihelp and Momentum performing on or below par.

GEMS was the only closed medical scheme included in the survey where Consulta polled 1 950 medical scheme members during the first half of 2021, and found under the overall customer satisfaction index that Bestmed was the leader at 76,7, above the industry par of 73,5, followed by Bonitas (73,7), Discovery (73,7) and Medihelp (72,3). GEMS (69,4) and Momentum (69,9) were below par.

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Customer satisfaction

All medical schemes showed a decline in customer satisfaction scores compared to 2020.

The index shows that the least satisfied customers have minimal benefit use and face co-payments and out-of-pocket expenses on day-to-day primary healthcare and chronic medication. Members on network plans (71.0) and hospital plans (72.5) are less satisfied than those on comprehensive plans (75.5).

When it came to customer expectations, the par score decreased to 82,2 from 85,0 in 2020, while perceived quality declined to 79,4 from 83,0 in 2020, its lowest index point over a five-year period. Bestmed came closest to meeting customer expectations and perceived quality, with the lowest expectation-quality gap of -0,5, compared to the industry par score of -2.8.

Momentum and GEMS are second, with an expectation-quality gap of -1,3 and Medihelp with -1,7. Discovery (-3,4) and Bonitas (2,2) have a considerable gap.

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Perceived value and quality

The index also measured perceived value of the quality relative to the price paid. Bestmed scored highest at 74,1 with the industry par on 70,5, followed by Bonitas (71,1), Discovery (70,5), GEMS (69,0), Medihelp (70,6) and Momentum (67,0). All schemes declined on this score compared to 2020.

Medical scheme members also still feel that they are paying too much for a benefit that does not fulfil their needs, driven by the fact that many members do not understand the specific scope of their cover.

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Medical scheme complaints

When it comes to the number of complaints and how these complaints are handled, all medical schemes consistently recorded a rise in complaints over five years, except for Bestmed. Discovery, GEMS and Momentum showed significant increases their number of complaints during 2021.

In addition, this negative trend was made even worse by highly inconsistent complaint handling on an industry level. The average score for the 2021 complaints rate is at an alarming 20.8%, while the international best practice score is below 10%.

The industry average score for complaint handling is 43,7, with most members complaining about slow pay-outs, declined benefits or total non-payment. Bestmed had the lowest complaints rate with a score of 11.6% and a complaint handling score of 47,6.

Medihelp scored 14,6 for complaints rate and 45,8 for handling complaints. For complaints rate, Bonitas scored 22,3%, Discovery 21.0%, GEMS 25,1% and Momentum 26,1%, a significant increase compared to 2020, except for Bonitas, which was slightly down.

Momentum Health had the highest number of complaints (26.1%), but also the highest complaints handling score (53.6). Bonitas (42,6) and Discovery (42,3) were below the industry par of 43,7 when it comes to handling complaints, while GEMS (45,8) was slightly above par. This shows that a significant proportion of complaints are not resolved.

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Customer loyalty

Bestmed had the most loyal customers at 68,9% and above the industry par of 65,7%, although it was slightly down from its 2020 score of 70,6%. Discovery followed at 66,4%, with a decline from its 2020 score of 69,9%. Bonitas (64,3%) and Medihelp (64,8%) also scored less than in 2020, while GEMS (61,1%) and Momentum (61,6%) increased marginally.

The Net Promoter Score, that measures the likelihood of someone recommending a brand, declined from 22,1% in 2020 for the industry par to 11,8%, its lowest points in five years.

Bestmed had the highest score at 28,5%, with 52% of customers recommending the brand. Bestmed also has the lowest number of detractors at 24%.

Bonitas scored 20,2%, with 47% of customers endorsing it, while Medihelp scored 11%, a significant decline from its 2020 score of 21,4%. Only 40% of customers actively promote the brand and 29% are detractors.

Discovery was next with a score of 9,7%, its lowest in the last five years and a significant drop from its 2020 score of 21,4%. Only 40% of customers actively promote the brand, while 30% are detractors.

Momentum scored 1,2%, a considerable decline from its 2020 score of 13,3%, while 35% of customers are detractors. GEMS crashed to -9,2%, with 41% of customers as detractors.

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Fair treatment

The degree to which customers feel they are treated fairly by their medical schemes is highest with Bestmed (80,6) and Bonitas (79,3), while the industry average is 76,4, followed by Medihelp (76,4), Discovery (75,9), GEMS (74,0) and Momentum (72,4).

“As medical schemes enter renewal season in October, when they announce benefit changes and premium increases for 2022, the findings of the latest index are significant. 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 will likely be significant shifts of members to lower cost-benefit plans and between medical schemes as customers try to balance value, quality, necessity and affordability,” Ineke Prinsloo, head of customer insights at Consulta, says.

“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 also 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.”

Prinsloo says this drop in expectations could be a precursor to more significant numbers of people opting out entirely or downgrading their benefits to basic core plans in the coming months, 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.