The Sunday Mail
Business Editor’s Brief
WITH the tussle between Government, as the regulator of medical insurance, and Cimas, the country’s second-biggest medical aid society, playing out in court, there are fundamental issues of the medical insurance business that cannot be ignored.
A fortnight ago, Cimas – whose licence Government intended to cancel for repeated infractions of several laws governing the operations of medical aid societies – successfully sought relief from the High Court to stop the State from carrying through its threat.
And indications that Government, which says it wasn’t afforded sufficient time to prepare to argue against issues raised in Cimas’ application, has filed opposing papers, means the tug of war will be drawn out.
But before the issue can be settled, it means that Cimas’ subscribers, particularly those who seek the services of Corporate 24 (the latest health insurer to have a tiff with the seemingly belligerent medical aid society) will have to pay cash only to be refunded at a later date that suits the convenience of their society.
This is in clear violation of the law.
For the record, Cimas has had run-ins with the National Physicians Association of Zimbabwe, Lancet Laboratories, Q Pharmacies, the Zimbabwe Hospital Doctors Association and the Retail Pharmacists Association of Zimbabwe.
In fact, in October 2012 the Competition and Tariffs Commission conducted a full-scale investigation into alleged “restrictive practices” the business.
Restricting this argument to Cimas only might be called biased because it is not the only player guilty of such offences – though its peers might arguably not be doing it on as grand a scale as Cimas.
It is, however, important to restrict the argument to the import of the actions that have been taken thus far by the society and their implications, not only to subscribers, but the medical insurance business as a whole.
There are clear regulations that discourage medical insurance businesses from owning clinics and other services to which they refer their subscribers.
In fact, the law, in black and white, makes it illegal for medical aid societies to direct subscribers to their own businesses or to any particular service provider.
Putting subscribers on cash when seeking services can be interpreted as meaning the same.
Yet this has been rampant in the industry.
It defeats the essence of the business, which is one of assuring subscribers of access to medical services at times when they need them most.
Insurance by its very nature acknowledges that not many people readily have cash when they need it.
So, by pooling resources of subscribers through premiums, those that are covered are empowered to seek even specialist services that they might not ordinary be able to afford.
Insisting that subscribers pay cash clearly disempowers them and is nothing short of scandalous.
It is using humans as pawns in a grander scheme of settling scores.
Granted, there might be disputes between medical aid societies and health service providers, but these are hygiene issues between two parties that do not have to involve ordinary premium-paying subscribers.
In the case between Cimas and Corporate 24, the tiff has been occasioned by disputed claims that do not amount to even US$500.
What is also absurd is the fact that Cimas has gone to great lengths to outsource the services of a South AfricaN company – ironically using monies from the Society – to conduct a forensic audit on the claims.
But abuse of subscribers is what the law has been designed to protect.
As was restated earlier by Government, any medical AID card carrying member has the right to be attended to without being interrogated.
The law exist and it needs to be enforced – and enforced forcefully. Sanity in such a crucial sector has to prevail at all costs.
While it might be understandable that the cake is getting small as the rate of uptake of insurance products slows with a shrinking formal sector, players in the business need to compete fairly.
It is not only in their interest but in the interest of national economy.
Traditionally, funds that are pooled together through the industry have been used to support key market instruments that prop up the economy.
Economists believe that savings need to be at least 30 percent of the country’s gross domestic product for the economy to be able to support productive sectors of the economy.
At a time when national savings are as good as non-existent, it is also in our interest to ensure that the insurance business, not least the medical insurance business, thrives.
But it can only thrive if it is orderly.
Government, in its endeavour to enforce the spirit and letter of the law, should not be discouraged. It must decisively deal with the escalating problems in the industry, without fear or favour, lest the sector continues to unravel.
Doing nothing will only guarantee mutually-assured self destruction. It is a ticking time bomb and Government is better advised to get on top of the situation before it gets the better of us.
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