Performance indicators

This section analyses the key statistics influencing the performance of medical schemes.

When evaluating the performance of medical schemes, the key factors to consider are:

Size and scale

Larger schemes tend to have a more stable and more predictable claims experience. They should also have greater negotiating power when setting prices.

Membership growth

Increasing membership reduces the volatility of a scheme’s claims and improves the profile, as new members tend to claim less than the average member in their first year of membership.

Membership profile

Claims experience will be more favourable for younger populations with lower chronic prevalence.

Financial results

The trend in a scheme’s financial results illustrates the adequacy of their pricing.

Solvency levels

Although the current statutory solvency level of 25% of gross contribution income may be inappropriate, each scheme should have sufficient reserves after considering each of the previous factors.