Two top medical aids to amalgamate

TWO of South Africa’s most prominent medical schemes, Bonitas Medical Fund (Bonitas) and Liberty Medical Scheme (LMS), are in discussions to amalgamate.

The strategic move is to help create an even stronger and more sustainable medical scheme that will provide enhanced cover and benefits to its members.

With combined experience of more than 50 years, the amalgamated scheme will have an intricate understanding of the needs of the consumer in the complex healthcare market as well as underlying financial resources to offer more cost-effective options to its members.

Andrew Edwards, executive principal officer for LMS, said, “While negotiations are at an advanced stage, member consultation is imperative and various regulatory processes still need to be satisfied for the transaction to be concluded.”

Dr Bobby Ramasia, principal executive officer for Bonitas, agreed. “We will liaise with the Council for Medical Schemes (CMS) to ensure that due process is followed and all necessary regulatory approvals are obtained.”

The LMS and Bonitas boards of trustees commissioned preliminary investigations into a possible amalgamation between the two schemes. The positive outcomes of the initial feasibility studies provided sufficient motivation for both boards to explore an amalgamation process.

Consolidation among medical schemes is an increasing trend which is indicative of the current healthcare industry. “Bonitas is committed to acting in the best interests of our members at all times. This amalgamation will reinforce our size and enhance our ability to negotiate improved benefits and services with healthcare providers to ensure our members have access to affordable, quality healthcare,” said Ramasia.

According to Ramasia and Edwards, the benefits of the potential amalgamation are numerous. Bonitas, currently administered by Medscheme, is South Africa’s second-largest open medical aid. “The scheme’s financial indicators are above the legislated requirements and industry average. Bonitas has one of the highest credit ratings in the industry, which is synonymous with a high claims-paying ability, in turn ensuring members access to quality healthcare,” said Ramasia.

The new scheme is set to have a broader national footprint, better economies of scale to negotiate better rates and improved provider networks. The Bonitas and LMS product offerings will remain unchanged for the rest of 2016.

“The boards of LMS and Bonitas entered into these amalgamation negotiations with the best interests of our members at heart. We believe this venture will be to their advantage and benefit,” said Ramasia.

Members of both schemes will be approached for consent on the amalgamation, and if member approval is obtained, then both schemes will begin the formal regulatory processes to obtain the necessary regulatory approvals. The schemes will continue to operate independently until all legal requirements are met.