In 2000, the authorities governing our industry placed restrictions on medical aid fees. It was 3% with a cap of R50. Some 14 years later the cap is R69 (last I looked). I have no problem with the 3%, but what is disturbing is that the cap has only increased at a rate of 2.3% p.a. Considering medical inflation, this is scandalous. Intermediary costs are increasing at a phenomenal rate. Surely the powers that be could at least apply a CPI rate of increase to the cap? Using a CPI rate of 6% our capped fees should by now have been R118.80. Our current cap is far below what one would call reasonable and fair.
If the industry buzzword is about TCF then surely the dictum should apply to everyone in the service chain as well? It should be about fairness to everyone.
Clyde
Editor’s comments:
- The Regulator’s views, as far as life and investment business is concerned, is that there should be equitable reward for services rendered. This was clearly stated in the feedback to the industry on the current investigation into the remuneration of financial advisors in this section of the industry. Why should the same not apply to those in the Healthcare business?
- Should the same authorities not regulate remuneration under the Twin Peaks model? Perhaps the Council for Medical Schemes should consider delegating this function to “Market Conduct Authority” which is scheduled to replace the FSB?
- How do services rendered in respect of healthcare advice compare with those concerning investments/life cover? Less work, hence less remuneration, or are the FAIS requirements such that there is no difference?
- If financial advice and intermediary services in respect of short-term insurance and healthcare products are so similar, should the commission not also be?
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