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Bonitas empowering members during Covid-19
EMPOWERING MEMBERS DURING COVID-19
CFO Luke Woodhouse shares that, despite the difficult circumstances surrounding 2020, Bonitas Medical Fund remains strong with good financials to back it.
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In 2020 the global pandemic put healthcare and access to private medical aid in the spotlight. We spoke to Luke Woodhouse, CFO of Bonitas Medical Fund, about the Scheme’s financial strength during difficult economic times, the impact of Covid-19, the way forward for healthcare as well as increases and plans for 2021.
Can you begin by giving an overview of Bonitas financially over the last year?
Despite difficult trading conditions, a weak economic outlook, rising unemployment and healthcare service above inflation, we are financially solid. When we released our annual results for 2019 (in July 2020), we reported bolstered reserves of R4.3 billion. The Fund reported a net surplus of R186.1 million for 2019 on the back of consistent and credible financial policies. This surplus will be invested back into the Fund to ensure our members continue to access affordable, quality healthcare.
It has not been an investors’ market – how did the Fund fare in terms of investments?
For 2019, the investment return was significant – R420.1 million (2018: R197.4 million). This was achieved by following a comprehensive investment strategy to maximise returns on members’ funds and to guarantee the long term sustainability of the Fund.
Was Bonitas able to achieve the 25% solvency ratio as required by the CMS?
The solvency ratio was 24.9 percent at the end of 2019. This was largely due to fast-growth during the year, with 7 758 new members joining the Scheme. The reality is that schemes that grow quickly usually experience a drop in solvency which normalises in the following 12 to 18 months.
We note that for 2021 Bonitas announced a weighted increase of 4.6 percent. Was it not possible to adhere to CMS’s request to keep contribution increases in line with the CPI?
We worked tirelessly to find the sweet-spot between sustainability and ensuring affordability – offering plan increases from 0 percent. We took a responsible stance, with a long-term view, to ensure that our members wouldn’t have to pay the price of a low increase for 2021 in the coming years. One of our core considerations was finding ways to ensure members could get access to full healthcare cover and avoid out-of-pocket expenses and co-payments.
There were calls during the first lockdown of the pandemic for medical aids to use reserves to assist members. Did Bonitas do this, if not, why not?
The medical schemes industry is highly regulated, this means any relief we offer members has to be in line with the guidelines of the Medical Schemes Act and approved by the Council for Medical Schemes (CMS). The use of reserves in this regard is unfortunately not permitted.
Bonitas has spoken about collaboration during the pandemic – do you see collaboration being an ongoing strategy in the next few years?
Collaboration across the healthcare value chain is a critical component of our strategy. We engage regularly with the CMS, the Board of Healthcare Funders (BHF), hospital groups and healthcare practitioners to ensure we make informed decisions and will continue to do so going forward.
Covid has highlighted the need for quality healthcare, what changes do you anticipate in the medical aid landscape in the years ahead? How is Bonitas addressing this?
We are looking forward to new and innovative ways of empowering members to manage their health in 2021 and beyond. Our focus is on more primary health-
care, utilisation of preventative care benefits, digitally enabled solutions and self-help facilities for members who want access to their benefits 24/7.
We have a number of strategies for 2021. • Edge
We introduced a new category – Edge – driven by technology, intelligence and innovation. The new plan under this category, BonStart, is designed for economically active singles or couples, living in the larger metros.
• Managed Care
The pandemic has highlighted the impact of lifestyle diseases and comorbidities on Covid-19 patients. 20 percent of our members have multiple comorbidities which means, even without the pandemic, we need a stronger focus on preventing and managing lifestyle behaviours.
• Home-based care
During Covid-19, home-based care received renewed focus as it’s a cost effective delivery of care and promotes healing. Studies show that patients recover faster in their comfort of their own home.
• Virtual Care
There was a positive response to the launch of the new Bonitas Member Mobile App and virtual care. This provided access to free GP consultations, not just for Covid-19, until 31 December 2020. At the heart of the model is the GP. This aligns to our care coordination initiatives, allows access to a virtual nurse, advice in an emergency, auxiliary and home- based care, ensuring members have comprehensive support for any condition, in any circumstance, through our virtual based model.
• Day hospitals
Day hospitals result in minimum disruption to members, speedier recovery times, less risk of infection and are also a more cost effective alternative.
• Technology
Virtual technology is the way forward. The WhatsApp channel we introduced has the most potential. This platform is convenient for members and allows them to manage their medical aid through live chats.
• Mental health
Is fast becoming the next pandemic and is a significant Managed Care risk. Studies show that around 20 – 25 percent of patients with pre-existing mental health issues feel they are coping badly or deteriorating due to the pandemic. We have built a resource hub – with a screening tool – to help people understand the condition and steps they can take to remain mentally healthy. It’s challenging to be different – to innovate, disrupt – to be better. But not impossible. Our primary focus is to ensure Bonitas remains sustainable, while making quality and affordable healthcare accessible to all South Africa. l
Luke Woodhouse, CFO of Bonitas is a qualified Chartered Accountant (CA) SA and holds a BCOMPT (HONS) Accounting Science degree. He has over 10 years’ experience in the healthcare sector, previously heading up finance and operational roles within the AfroCentric Group. He has a wealth of practical experience when managing technical finance matters relating to the medical scheme environment. For more information, visit www.bonitas.co.za
