The Sunday Mail
IT is not a secret that with the current economic challenges, the medical aid sector was not going to be spared.
Medical insurance in Zimbabwe has hugely been funded by employers.
With lack of funding, liquidity challenges and deflation, many companies have been battling to sustain their operations, pay wages on time and worse still afford to pay medical aid for their employees.
As a result, companies pulled out of medical aid due to lack of sustainability whilst individuals pulled out due to lack of disposable income.
The current economic situation left medical aid companies competing for a dwindling cake.
The only reasonable strategy for most players was to discount their rates to gain a competitive edge.
This initiated price wars in the sector, where there was a replication of products just given different names like mukwa, private, sapphire, platinum to name a few with the same benefits but different prices.
This in the end compromised the sustainability of these models as the funds were not accumulating enough to build reserves against an industry average claims contribution ratio which was pegged at over 80 percent by the Association of Health Funders of Zimbabwe.
This was further compounded by the unexpected move by the Ministry of Health and Child Care of gazetting a 75 percent increase in doctors’ tariffs against all odds.
With a myriad of challenges facing the medical aid sector, the only solution to survive has been to simply innovate or to face death.
Different companies are now trying to come up with different models in order to ensure that they gain a foothold of the market.
Products that are now being sold in the market were considered inconceivable years back.
Fledgling medical business Corporate 24, for example, recently fused medical aid and funeral cover in order to try and lure a market that has become increasingly sensitive to prices.
Market trends and demands have changed towards convenience-based products and services.
Corporate 24 chief executive Dr Mike Joka said last week there was scope to launch more products.
“The market uptake of the budget medifuneral products has been satisfactory.
We have managed to meet our targets for the year with tens of thousands of members registered.
“ We have also managed to maintain good relationship with the over 500 service providers on our network by timeous payments. We look forward to launching more exciting products in 2015,” said Dr Joka.
Many companies are now angling for the informal market where most of the economic activities are taking place.
It is also estimated that more than US$7 billion is circulating outside the mainstream economy.
With a depressed economy, consumers are looking at ways of cutting operational costs and overheads.
Other exciting products that have come after the medifuneral plans from Corporate 24 are Telecare by Telecel which is offering funeral and medical cover and Ecohealth, which is offering mobile advisory health services.
