In her article “The broker system is broken” (On My Mind, March 13-19), Tracey Davies proposed certain safeguards that, in her view, are lacking in relation to the role of brokers in the medical scheme industry. The article, prompted by her recent experience of unexpectedly being asked to confirm a new broker on her medical aid policy, which she had neither requested nor authorised, highlights the need to protect medical scheme members from instances of potential fraud (regardless of how isolated these are). It also emphasises the need to continuously ensure stringent adherence to industry standards and regulations.
Discovery Health maintains the highest possible standards regarding broker conduct for the medical schemes it administers. Safeguards include managing the integrity of broker appointments — a signed request and written confirmation is required for the appointment of a broker and/or change to any broker appointments. Forensic investigations are carried out into any reports of irregularities, including unauthorised appointments, as happened in Ms Davies’s case.
Across the medical scheme industry, broker accreditation and remuneration are strictly regulated by the Council for Medical Schemes (CMS) and broker conduct is continuously monitored in collaboration with regulatory bodies and industry associations such as the Financial Sector Conduct Authority.
In addressing Ms Davies’s suggestion that the broker system is broken, I must clarify some critical points.
Her allegation that the industry makes it difficult to understand products, to the extent that professional help is needed, is misplaced. Health care is complex and there is no one-size-fits-all approach to selecting appropriate medical scheme cover.
While the industry attempts to provide easy-to-understand and standardised packages of care, ongoing innovation is essential to being able to offer health care that is personalised, comprehensive and effective. Moreover, a person’s health-care needs evolve over time, making ongoing professional guidance and advice essential. Taking these factors into account, alongside every effort to simplify access to information and care, there is a crucial role for brokers not just in helping members choose the right cover initially, but in continuously advising them as their medical and financial needs change.
Health care is complex and there is no one-size-fits-all approach to selecting appropriate medical scheme cover
A well-informed medical scheme membership base strengthens the entire system and promotes competition among medical schemes. By assisting members in selecting the most appropriate cover and accessing the right benefits when members need them, brokers not only enhance individual health outcomes but also contribute to the long-term sustainability of the industry. Without professional advice from brokers, many individuals risk paying for benefits they don’t need or are potentially left exposed to financial shortfalls when accessing care.
Beyond providing professional advice on medical scheme cover, brokers also provide crucial advice on life insurance, short-term insurance and retirement planning — all essential elements for holistic financial planning and risk mitigation.
Nearly 60% of the Discovery Health Medical Scheme membership is through employers, where a broker’s main relationship is with a central representative at that particular company, providing advice at an organisational level. While these brokers won’t necessarily be visible to employees, they play a critical role in supporting employers and their workforce, advising on structuring appropriate benefits for their employees and implementing effective health and wellness benefit strategies. At the same time, employees can seek individual advice and support from these brokers. The name and contact number of one’s financial adviser is available in the member zone on the Discovery website.
In terms of fees, broker commissions have been deflationary over time and do not contribute to annual premium increases. Furthermore, broker remuneration is strictly regulated by the CMS, and Discovery Health pays broker commission in compliance with these regulations. Medical inflation, which drives medical scheme inflation, is the result of other factors that include ageing populations and the rising cost of new medicines and technology — not broker commissions.
Discovery Health remains fully committed to safeguarding the interests of members of the medical schemes it administers and to ensuring that brokers provide valuable, ethical and professional advice and service, strictly in accordance with regulatory requirements and industry standards.
Whelan is CEO of Discovery Health
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