Report of the Registrar of Medical Schemes

Transcription

1 eport of the egistrar of Medical Schemes

2 Vision To regulate fairly and effectively in order to protect the interests of members and to promote equity in access to medical schemes. Mission The Council will act in an administratively fair and transparent manner, with integrity and professionalism and will achieve this vision by Informing the public about their rights and obligations in respect of access to medical schemes; Ensuring that all entities conducting the business of medical schemes comply with the Act; Ensuring that complaints raised by members and the public are handled appropriately and speedily; Contributing to improved management and governance of medical schemes; and Advising the Minister of appropriate regulatory interventions that will assist in attaining national health policy objectives.

3 Contents Chairperson s foreword egistrar s review eport of the Auditor-General Balance sheet Income statement Statement of changes of equity Cash flow statement Notes to the financial statements eview of operations of Medical Schemes Annexures Physical Address: 1267 Pretorius Street Hadefields Block E Hatfield Pretoria Postal Address: Private Bag X34 Hatfield 0028 Telephone: Telefax: Internet: 1

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5 CChairperson s foreword Professor N Padayachee Chairperson of the Council for Medical Schemes The first year of the new millennium was especially significant for the Council for Medical Schemes ("the Council"), and for the medical schemes industry in general. On a personal note, it was a year of sadness for members of the Council, as we mourned the passing away of Tony Leveton who had contributed much to the work of the Council. From a regulatory perspective, the year was very important as it saw full implementation of the Medical Schemes Act, 131 of This brought with it critical reform of the medical schemes industry, relating to such issues as open enrolment, community rating and improved governance and financial oversight of medical schemes. In practical terms, for Council this meant the re-evaluation of its mission, vision and strategic objectives, and the alignment of its operational activities with these objectives. I am very grateful to all the members of the Council for participating so fully in this role. In addition, the year saw the appointment by Health Minister Dr Manto Tshabalala Msimang of Patrick Masobe as egistrar in April, and the subsequent appointment of other highly skilled personnel to support the egistrar in his work. These staff worked tirelessly with Council in the course of the year to get to grips with key issues in the industry, including such issues as reinsurance and demarcation, and to eliminate huge backlogs which had developed in preceding years in the registration of rules, preparation of annual reports and the resolution of complaints. Crucial funding for the work of the office was secured by passage of the Council for Medical Schemes Levies Act, 58 of, which effectively provided for the Council to be funded in future by nominal levies imposed upon medical schemes. I have every confidence in the ability of the egistrar and his team to continue to implement the mandate set for them by the Council in the years to come. One of the ongoing challenges to confront the egistrar, and indeed Council as a whole, is the need to communicate effectively with medical schemes and other stakeholders in the industry. The publication of this report is one of the important means to share information on developments within the Council as well as trends in the industry. I trust that it will prove to be as useful a source document to readers as it has been to us, especially as it highlights many encouraging signs in the industry, while at the same time pointing to areas requiring further growth and development. I would like to thank the egistrar and his team for the hard work that has gone into preparing this report. I would also like to thank the medical schemes, administrators and auditors who cooperated in providing the data that makes up this report. The general level of cooperation was particularly encouraging given the implementation of changes during to both the content and the format of the statutory returns. I trust that we can depend on ongoing cooperation in future years as we develop the annual report into an instrument of optimal value to industry, government and research entities. Finally, I would like to express the hope that as a regulator and an industry, we can work together to build on the strengths and resolve the problems of the private health industry, in recognition of the important role that this industry plays, and must continue to play, in bringing health care to the people of South Africa. Professor N Padayachee 3

6 egistrar s review The year has been an important one for the Council for Medical Schemes, which has been an independent Council since April. The Council s remit is to regulate private medical schemes in a fair and effective manner. In keeping with this, the Council spent a lot of time during the year in setting up a functional and adequately staffed Office of the egistrar of Medical Schemes. The Council was made up, during this period, of the following members: Professor Nicky Padayachee Chairperson Dr. Jud Cornell Deputy Chairperson Mr. Stranger Kgampe Professor Heather McLeod Dr. Siva Pillay Dr. eno Morar Ms. Debbie Pearmain Dr. Ayanda Ntsaluba Mr. Blamo Brooks Ms. iah Phiyega Ms. Gando Matyumza Mr. Tony Leveton (until July ) Dr. Jakes Jekwa Dr. Thandi Tsotetsi Ms. Fatima Hassan T Patrick Masobe egistrar of Medical Schemes The key functions of the Council, as set out in section 7 of the Medical Schemes Act (Act 131 of 1998) are: To protect the interests of members (of medical schemes) at all times; To coordinate the functioning of medical schemes in a manner consistent with national health policy; To measure quality of care provided by schemes and make recommendations to the Minister in this regard; To investigate, and as far as possible, resolve complaints raised by members of schemes; To collect and disseminate information about private health care; and To advise the Minister on any matters concerning medical schemes. In order to carry out these functions, Council has established four business units. These are egistration and Accreditation; Financial Supervision; esearch and Monitoring and Corporate Services. The Council s Vision and Strategic Mandate We took some time during the year to agree on a vision and mandate for the Council. Our key vision is To regulate fairly and effectively in order to protect the interests of members and to promote equity in access to medical schemes The key objective of Council s regulatory work is to ensure that medical schemes operate fairly and remain viable and sustainable in the interests of everybody involved in the industry. egulatory Activity In order to achieve this, our registration and accreditation unit, headed by Danie Kolver, has focused on ensuring that all entities that conduct the business of a medical scheme are registered, and that their rules comply with the law. During we processed a large backlog on registration of schemes rules, and carefully checked the benefit options offered by schemes 4

7 egistrar s review to ensure that these were consistent with the principles of community rating, open enrolment and prescribed minimum benefits required by the Act. This unit also achieved a first in the South African regulatory environment with the accreditation of health brokers and advisors and the development of a code of conduct for brokers. Key to this code has been a requirement that brokers make full disclosure to clients and provide best advice. Staff of the unit also held numerous discussions with Principal Officers and Administrators of schemes to deal with complexities in proposed rule amendments and to provide guidance in the process of interpreting the provisions of the new Act and egulations. A key part of ensuring a viable medical schemes industry is the review of financial performance and soundness of schemes, and the development and enforcement of standards for solvency. Our Financial Supervision Unit, headed by Ms. Fikile Mothobi, has the main responsibility in this regard. Like the egistration unit, we started off here by clearing a backlog with the publication of the 1997 and 1998 annual reports on the operations of medical schemes. We also finalised the 1999 report, which has since been published on the Council website. Two initiatives were undertaken to enhance the quality of data available to trustees and to the Office of the egistrar. First, it was our view that the nature of reporting of scheme s data had not been sufficient for quality decision making by management and members. We therefore worked very closely with the South African Institute of Chartered Accountants (SAICA) to draft a new Audit and Accounting Guide on Medical Schemes. Both the egistrar and SAICA subsequently endorsed the accounting guide. Second, the unit undertook a large-scale modification of the statutory return required to be submitted by medical schemes in terms of section 37(2) of the Act. These changes were occasioned both by the requirements of the new Act, and by the new SAICA Guide. The statutory return now provides greater financial and demographic details, strengthening the egistrar s capacity to monitor the financial soundness and regulatory compliance of medical schemes. The statutory return has also been made available in an electronic format to facilitate easy submission and analysis. The monitoring of solvency in line with egulation 29 has been subject to various interpretations, such as instances where savings account contributions were excluded from gross contributions. In addition, the inappropriate classification of reserves made the calculation of solvency inconsistent. The Financial Supervision Unit has, during the year, clarified the purpose and calculation of the solvency requirement, and this was communicated to the industry in Circular 13. The egistrar initiated a number of inspections of schemes during the year, on the advice of the unit and primarily due to concerns around governance issues and the business practices of schemes as well as the potential impact on the solvency of schemes and the interests of members. Many of these investigations were resolved satisfactorily without the need to resort to legal action. The esearch and Monitoring unit was established with a view to monitoring the impact of the Act and making recommendations for regulatory changes where unintended consequences were being seen. The Unit has a staff of six, and is headed by Stephen Harrison. The Unit commissioned a comprehensive stakeholder analysis to MarkData (Pty) Ltd with a view to supporting the development of strategic direction for 5

8 egistrar s review the Council and providing consolidated research in respect of stakeholder positions vis-à-vis the strategic options available to Council. The process included interviews with some 217 stakeholders, and a survey of 2201 households. The unit also conducted a survey to evaluate data collection practices in the medical schemes industry and focused primarily on indicators for access to health, utilisation, cost and quality of care. The results revealed less than pleasing collection of key data and a lack of standardisation of data. Many schemes did not collect data on demographic characteristics of members and member movement. The emphasis in data collection by schemes appeared to be on expenditure. The collection of information on the application of general waiting periods and pre-existing condition exclusions by medical schemes was also poor. A large number of schemes did not collect data on utilization of services, including public and private hospitals, MI, CT scans and the number of women delivering through caesarean sections. A third of medical schemes did not collect data on preventative care and health promotion issues such as mammograms and on pap smears paid for. The study has helped identify gaps in the data needed to adequately monitor and evaluate the impact of the Act. This has allowed the Council to develop strategies for improved data collection and standardisation. An interim membership survey of enrolment patterns during the first three quarters of was undertaken to ascertain demographic trends following introduction of the Medical Schemes Act. The results of this survey were published in the Health Annals, Other activities included a process of consultation between the office of the egistrar and the Association of Health Benefit Advisors and the South African Health Intermediaries Association to review and develop recommendations regarding commission structures and the Broker s Code of Conduct. Senior Staff in egistrar s Office Another important part of the work of the Office of the egistrar relates to the resolution of complaints lodged by members of medical schemes and others. The Complaints Unit, headed by Ms. Linda Gabela, was set up to enhance and streamline the egistrar s capacity to deal with complaints. The unit also analyses trends in complaints, which may give insight into developments within the industry with implications beyond the individual member. While the most common complaint relates to unpaid accounts, 6

9 egistrar s review analysis reveals that failure of communication between the scheme and member is a feature of nearly all complaints. Between May and December, a total of 661 complaints were received by phone, fax or post and 591 of them were resolved. In November an online Complaints Form was introduced on the Council website. Staff assisted complainants to bring their concerns to the attention of their medical schemes and advised medical schemes on complaints handling and resolution. In addition, staff were actively involved in the training workshops throughout the country. The broad categories of complaints received during the year under review were as follows: Proportion of type of camplaints May - December % Unpaid Account Governance / Admin Unauthorised premiums Waiting Period Other Termination of Membership ejection / Application Multiple Complaints Enquiries Exclusion Benefits Prescribed Minimum Benefits Suspensions Exclusion Pre-existing Discrimination Age Discrimination Health Withholding / Benefit option efunds estriction / Option The final unit in the egistrar s Office is Corporate Services, and is under the leadership of Ms. Nelly Letsholonyane. This unit spans a range of activities including: Financial Management here the key tasks during included the establishment of a financial management system in line with the requirements of the Public Finance Management Act, and the coordination of the budgeting and expenditure processes. Human esources Management a lot of effort went into developing policies on a number of issues including recruitment and retention of staff, management of consultancy contracts, staff induction, development and training, and development of a performance management system. Information Technology Services our IT division of three very bright people, was instrumental in the design and development of a comprehensive infrastructure of databases, web-enabled services, end-user support services and network management services. The Office s website enables users to interact directly with the Council members and others and provides access to a broad range of information and documents. Coordination of consumer training we were concerned early on that the amount and level of information that consumers and members have about the medical schemes industry was far from adequate. We therefore requested the corporate services unit to coordinate an extensive programme of consumer workshops throughout the country. Initial work focused on an assessment of training needs. We then moved on to conducting provincial 7

10 egistrar s review workshops with trustees of schemes, consumer organisations and trade unions. This has been a very successful programme indeed, judging from the evaluation of these workshops. My Office had the privilege, during this year, of first rate legal advice provided by our Senior Legal Advisor, Craig Burton Durham and our panel of external legal firms. Esann de Kock, our very competent communication manager was also instrumental in setting up our communication strategy and our industry magazine called CMS NEWS. We also run a successful internal staff magazine called Masihambisane. Audit Committee H and emuneration Committee The Audit Committee is made up of two members of Council and three external members. The committee meets once every quarter and reports directly to the Council. The Committee is made up the Chairperson and deputy chairperson of Council, and meets as often as it is necessary to transact its business. In conclusion, I wish to acknowledge the support of the Council in the difficult task of setting up the operations of the new Office during. All Council members gave unselfishly of their time and expertise to make sure that we were successful in our attempts. For this I am grateful. Many members of the Boards of Trustees of schemes, principal officers, administrators and BHF provided assistance in dealing with many issues during the year. I would also like to express my gratitude to the Minister of Health, Dr Manto Tshabalala- Msimang and her Director-General, Dr Ayanda Ntsaluba for their unwavering support of the work of the Council during this first year of our operations. Finally, all our staff contributed enormously to our success, and I value their support. T Patrick Masobe egistrar of Medical Schemes 8

11 eport of the Auditor-General on the financial statements of the Council for Medical Schemes for the period 1 November 1999 to 31 December 1. Audit assignment The financial statements as set out on pages 11 to 16 for the period 1 November 1999 to 31 December, have been audited in terms of section 188 of the Constitution of the epublic of South Africa, 1996 (Act No. 108 of 1996), read with sections 3 and 5 of the Auditor-General Act, 1995 (Act No.12 of 1995). These financial statements, the maintenance of effective control measures and compliance with relevant laws and regulations are the responsibility of the accounting officer. My responsibility is to express an opinion on the financial statements and compliance with relevant laws and regulations, applicable to financial matters, based on the audit. 2. egularity audit 2.1 Nature and scope Financial audit The audit was conducted in accordance with generally accepted government auditing standards, which incorporate generally accepted auditing standards. These standards require the audit to be planned and performed in order to obtain reasonable assurance that the financial statements are free of material misstatement. An audit includes: examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. I believe that the audit provides a reasonable basis for my opinion Compliance audit Furthermore, an audit includes an examination, on a test basis, of evidence supporting compliance in all material respects with the relevant laws and regulations, which came to my attention and are applicable to financial matters. I believe that the audit provides a reasonable basis for my opinion. 2.2 Unqualified audit opinion Financial audit In my opinion, the financial statements fairly present, in all material respects the results of the operations of the Council for Medical Schemes for the year ended 31 December in accordance with prescribed accounting practice Compliance audit Based on the audit work performed, nothing has come to my attention that causes me to believe that material non-compliance with laws and regulations, applicable to financial matters, has occurred. 9

12 eport of the Auditor-General 3. Emphasis of matter Without qualifying the audit opinion expressed above, attention is drawn to the following matter: Post balance sheet event: debt written off During the transitional and setup period of the structures of the Council for Medical Schemes the Department of Health failed to register timeously for Value Added Tax (VAT) purposes. The eceiver of evenue conducted a value added tax audit and raised an amount of as outstanding value added tax for the period December 1999 to May. The Council paid the said amount and considered the recovery thereof from brokers and medical schemes as doubtful and wrote off in the 2001 financial year. 4. Appreciation The assistance rendered by the staff of the Council for Medical Schemes during the audit is sincerely appreciated. J S Grobbelaar for Auditor-General Pretoria 18/6/

13 BBalance sheet of the Council for Medical Schemes for the period 1 November 1999 to 31 December Statement 1 Notes 1999 Assets Non-current assets Property, plant and equipment Current assets Debtors and debit balances Bank balances and cash Total assets Equity and liabilities Capital and reserves Accumulated funds Non-current liabilities Lease obligation Current liabilities Creditors and credit balances Provisions Total equity and liabilities Pretoria 08/05/2001 P Masobe Chief Executive Officer Income statement of the Council for Medical Schemes for the period 1 November 1999 to 31 December Statement 2 Note 1999 Operating surplus before financing costs and interest income Interest income Financing costs (7 475) - Net surplus at the end of the period Accumulated surplus/deficit at the beginning of the period - - Accumulated surplus at the end of the period

14 Statement of changes in equity of the Council for Medical Schemes for the period 1 November 1999 to 31 December Statement 3 Notes 1999 N Balance at 1 November Net surplus for the year Balance at 31 December Cash flow statement of the Council for Medical Schemes for the period 1 November 1999 to 31 December Statement 4 Notes 1999 Cash generated from operating activities Cash received from customers Cash receipts from the Department of Health Cash paid to suppliers and employees ( ) - Cash utilised by operations Interest received Interest paid (7 475) - Net cash outflow from operating activities Cash flow from financial investment activities - Purchase of fixed assets 14 ( ) - Cash flow from financial activities Long term lease - (41 893) - Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period - - Cash and cash equivalents at end of period

15 Notes to the financial statements of the Council for Medical Schemes for the period 1 November 1999 to 31 December Schedule A 1. Legislation The Council for Medical Schemes was established in terms of the Medical Scheme Act, 1998 (Act No. 131 of 1998) and is governed by a council appointed by the Minister of Health in terms of section 4 of the Act. 2. Accounting policy Annual financial statements are prepared on the historical cost basis and incorporate the following accounting policies, which have been consistently applied in all material respects unless otherwise stated: 2.1 Fixed assets All fixed assets are recorded at cost less accumulated depreciation. The depreciation is based on the straightline method over their estimated useful lives at the following rates: Computer equipment and software at 25 % per annum. Office furniture and equipment at 10 % per annum. Lease equipment (per category): Motor vehicle at 20 % per annum. Other assets at 10 % per annum. Expenditure that increases the original value and useful lives of computer software programs are classified as assets and amortised over their useful lives on the straightline method. Development costs for specialised databases are also classified as assets and amortised over their useful lives. Leased assets Leased assets are recorded at their costs as assets and amortised using the straightline method over their respective useful life. 2.2 Debtors and debit balances Debtors and debit balances are reflected at expected realisable value. Where circumstances reveal doubtful recovery of amounts outstanding, bad debt is provided and written off in the year it is identified. 2.3 Provisions Provisions are raised where there is a legal or constructive obligation and an estimate of the obligation can be made. 2.4 ecognition of income and expenditure Income and expenditure are recognised on the accrual basis. 2.5 Cash and cash equivalents For the purpose of the cash flow statement, cash and cash equivalents comprise of cash on hand, cheque, fixed and call accounts at the bank. 2.6 Long term lease The Council acquired a three (3) year term financial lease with Bankfin to finance its information technology (IT) infrastructure. In terms of the lease agreement ownership of the goods vest with the rentor and will only pass to the hirer on payment of the last installment. The capitilised amount of the lease is reduced by the capital portion of the repayments whilst the interest portion of the installment is expensed as financed costs. 2.7 Government assistance Government assistance in the form of start-up capital for operations is treated as income as and when received. The grant received is included under revenue (see note 8). 13

16 Notes to the financial statements Schedule A continued 3. Fixed assets Type Cost at Additions Disposals Cost at Accumulated Book value 1/11/ /12/ depreciation 31/12/ Computer equipment and software Office furniture and equipment Leased equipment Motor vehicle Other assets Bank balances and cash Current account and cash on hand Call account Fixed deposit Long term lease Original capital amount Less: Capital repayment (37 330) - 6. Accounts receivable and other debtors Sundry debtors Accounts receivable Accounts payable and other creditors Accounts payable evenue Accreditation fees egistration fees Start-up funds Penalties Investigation recoveries

17 Notes to the financial statements Schedule A continued 9. Calculation of operating surplus for the period 1 November 1999 to 31 December 1999 evenue Grant received Accreditation fees Investigation recoveries egistration fees Penalties Expenditure Personnel expenses Administration Council member fees Legal fees Media and promotion Training and development Consulting fees Office rental Operating surplus for the year Provisions Leave days Going concern The financial position of the council is such that the council will continue its operations for as long as its mandate remains. In the new year commencing 1 January 2001, the council is to start imposing levies to finance its operational requirements in terms of the new Medical Schemes Levies Act, (Act No. 58 of ). 12. Taxation No provision for taxation is made since the Council for Medical Schemes is exempted from income taxation in terms of section 10 of the Income Tax Act, 1962 (Act No. 58 of 1962). 15

18 Notes to the financial statements Schedule A continued econciliation between net surplus and cash applied to activities Net profit for the year Adjustments for: Depreciation Interest received ( ) - Interest paid Operating loss before working capital changes Increase in accounts receivable ( ) - Increase in accounts payable Cash utilised in operations Purchases of fixed assets Computer equipment and software Office furniture and equipment Motor vehicles Other assets Cash and cash equivalents Current account and cash on hand Call account Fixed deposit

19 eview of operations of Medical Schemes Coverage by Medical Schemes The number of persons covered by all medical schemes increased marginally by 0,4% from during 1999 to during. Open schemes showed an overall increase in membership of 8,9% from to Coverage by Medical Schemes Medical Schemes 1999 % Change egistered Schemes ,8 Open ,9 estricted ,1 Exempted ,3 Total ,4 estricted schemes showed a 12,1% increase largely due to the reclassification of Transmed and Polmed from exempted schemes to restricted schemes in line with policy. As a result, exempted schemes showed a marked decline in membership. Figure 1 Coverage of beneficiaries by Medical Schemes Thousands Beneficiaries Beneficiaries Pensioner atio Figure 1 illustrates the coverage of beneficiaries in the medical scheme industry. Overall, the number of beneficiaries covered by medical schemes has been relatively constant over the past two years, with a marginal increase in bringing the figure to the 7 million mark for the first time. The pensioner ratio also remained constant between 1998 and 1999, however it increased slightly from 4% in 1999 to 6% in. This is also demonstrated by Figure 2, which shows an increasing proportion of older people within schemes, both as a result of aging of existing members and more older people joining medical schemes. This is in line with the Medical Schemes Act s objective of extending access to groups that were previously excluded due to age or health status during the period when individual risk rating by medical schemes was permitted. Some level of normalization in the demographics of medical scheme membership was therefore expected. This was facilitated by the "amnesty period" exempting older people who applied to medical schemes for the first time before 31 March 2001 from late joiner penalties. With the subsequent imposition of late joiner penalties on persons 17

20 eview of operations of Medical Schemes joining medical schemes for the first time only late in life, it can be expected that the increase in numbers of pensioners will level off. In the same period, the dependency ratio remained relatively constant at 1,59 in 1998, 1,61 in 1999 and 1,58 in. Figure 2 Age distribution of Medical Scheme beneficiaries Beneficiaries < >75 Years Figure 3 illustrates trends in medical scheme coverage by type of medical scheme. Open medical schemes have seen a significant growth in membership over time. Exempted schemes on the other hand, have been experiencing a decline in membership and this is in line with policy to bring all entities doing the business of a medical scheme within the purview of the Medical Schemes Act. A different picture emerged with the restricted schemes, which had also been experiencing declining membership numbers until the reclassification of Polmed (total beneficiaries = ) and Transmed (total beneficiaries = ), from exempted schemes to restricted schemes, in early. If it were not for the change in status of Polmed and Transmed, the membership of restricted medical schemes would have continued to decline due to the ongoing trend of a shift of members from restricted to open medical schemes. Figure 3 Distribution of beneficiaries in Medical Schemes Beneficiaries Thousands Jan-98 Mar-98 May-98 Jul-98 Sep-98 Nov-98 Jan-99 Mar-99 May-99 Jul-99 Sep-99 Nov-99 Jan-00 Mar-00 May-00 Jul-00 Sep-00 Nov-00 Open estricted Exempted 18

21 eview of operations of Medical Schemes Number of Medical Schemes by size The table below categorises schemes according to size: small, medium and large depending on the number of members, beneficiaries or both. The table shows that more than half of open schemes could be classified as large while most of the restricted schemes could be classified as small. Overall small schemes constitute almost 60% of all medical schemes. Size of scheme Type of scheme Total schemes Open estricted "Exempted" Small (<6 000 members) Medium ( > members but < beneficiaries) Large ( or more beneficiaries) Total schemes Financial performance of schemes Total gross contribution income for registered and exempt medical schemes increased by 7,25% to billion for the year to 31 December while total benefits paid out increased by 4,30% to billion for the same period. Total contribution income excluding savings plans contributions for registered and exempt medical schemes increased by 10,54% to billion for the year to 31 December, while total benefits paid out increased by 6,87% to billion for the same period. Schemes therefore paid 89,25% of contributions, excluding savings accounts, in benefits. Gross administration costs in respect of registered and exempt medical schemes increased in by 25,85%. At the end of, the gross administration costs of 65 registered medical schemes exceeded 10% of their total gross contribution income. The norm of 10% has been observed for many years as a guideline, but it is clear that the cost of gross administration is increasing steadily. Gross administrative expenses consist of the expenses allocated to the risk pool, savings accounts and managed care : management services. Figure 4 shows the matching of contributions to benefits over a decade in the medical schemes industry. During there were 31 schemes that paid out more in claims than they received in contribution income. These schemes would have experienced financial difficulties were it not for accumulated funds within the schemes. Figure 4 Underwriting results millions % 94% 93% 92% 91% 90% 89% 88% - 87% isk contributions isk benefits incurred Loss ratio (%) 19

22 eview of operations of Medical Schemes The function superimposed on figure 4 shows the loss ratio over the same period. The loss ratio is calculated by dividing risk benefits incurred by total risk contributions for the year, and is expressed as a percentage margin on the right side of the figure. The period between 1991 and 1993 shows matching that was beneficial as claims to contributions (loss ratio) showed a decreasing rate. The loss ratio stabilized in 1994, only to show substantial hikes again until 1999 when it declined. This data provides an indication that the new Medical Schemes Act did not have such an adverse effect on the claims as some had expected. Figure 5 Financial results millions (500) (94) (234) (356) (1 000) (1 500) (739) (1 004) (1 112) Operating results Nett profit/(loss) Figure 5 plots the industry operating results and net results over a ten-year period. When the functions are viewed in relation to each other, they show how other income and investment income have assisted the medical aid industry in bolstering reserves over the period in order not to erode accumulated funds. The operating result function shows moderate fluctuation around the breakeven point from 1991 through to However, with the exception of 1997, from 1995 to 1999 significant losses were experienced. This shows the industry s inability to manage operating expenses after gross underwriting results, especially after considering the improved loss ratio over 1998 to. The gap between the operating result and net profit curves shows how instrumental investment income has been in funding medical schemes into a net profit result. 20

23 eview of operations of Medical Schemes Figure 6 Financial results as % of contributions Percentage 14% 12% 10% 8% 6% 4% 2% 0-2% -4% -6% 0.71% 6.55% 5.71% -1.00% 4.41% 5.34% 5.61% 3.02% 6.16% 5.61% 1.24% 5.70% 5.87% -1.50% 2.54% 6.45% -2.01% 3.88% 7.47% 1.11% 5.89% 7.18% -3.40% 1.09% 9.21% -4.42% 0.87% 11.15% -3.61% 0.69% 12.69% Operating results Nett profit/(loss) Administration expenditure Figure 6 shows industry wide performance margins, calculated as a percentage of contributions over the ten-year period. This figure can be read in conjunction with Figures 4 and 5. Figure 6 also shows the effect of gross administrative expenses on the operating performance of medical schemes. Figure 7 plots contribution, expense and surplus figures on a beneficiary per month basis. It is interesting to note how a trade off has developed since 1997 between gross administrative expenses and annual surpluses per beneficiary per month. Gross administrative expenses per beneficiary appear to have grown at the expense of beneficiary surpluses. Figure 7 Per beneficiary calculations Per month isk benefits PBPM Nett profit/(loss) PBPM isk contributions PBPM Adminstration PBPM 21

24 eview of operations of Medical Schemes Small Medical Schemes (< members) Year e-insurance e-insurance No. of Medical Members Beneficiaries Premium paid ecoveries Schemes 1996 ( ) ( ) ( ) > ( ) ( ) Total ( ) Medium Medical Schemes ( > members but < beneficiaries) 1996 ( ) ( ) ( ) ( ) ( ) Total ( ) Large Medical Schemes ( or more beneficiaries) 1996 ( ) ( ) ( ) ( ) ( ) Total ( ) Figure 8 Total risk benefits paid It is important to note that there was an increasing prevalence of re-insurance in the industry from 1997 onwards. Of the 15 open schemes that were unable to reach the 10% solvency level, 10 had reinsurance losses. It is noteworthy that there are greater losses in open, large schemes than in restricted schemes. 33.7% 33.7% 25.5% 0.2% 0.4% 0.9% 1.6% 4.6% 5.7% 7.6% 25.5% 19.9% Total hospitals Medicines Medical specialists General practitioners Allied and support health professionals Dentists Other benefits Dental specialists 19.9% 7.6% 5.7% 4.6% 1.6% 0.9% Capitated primary care Ex-gratia payments 0.4% 0.2% 22

25 eview of operations of Medical Schemes Figure 8 shows the distribution of expenditure on benefits from the risk pool (as opposed to benefits paid from personal medical savings accounts). A third of the expenditure went to hospitals, 98% of which was paid to private hospitals. This was followed by medicines at 25.5% and medical specialists at 20%. Other benefits included appliances, prostheses, ambulance services and other related benefits. Figure 9 Total savings benefits paid 39.8% 16.5% Medicines Medical specialists General practitioners 39.8% 16.5% 15.9% Allied and support health professionals 13.7% 1.2% 1.6% 2.2% 9.2% 15.9% 13.7% Dentists Dental specialists Other benefits Total hospitals Ex-gratia payments 9.2% 2.2% 1.6% 1.2% 0.0% Figure 9 shows expenditure from medical savings accounts. The largest proportion was spent on medicines (39.8%). Medical specialists, GP consultations, and allied health professionals followed this. A small proportion of the medical savings account has been spent on catastrophic expenses such as hospitalization. Figure 10 Total benefits paid (Excluding provisions) millions General practitioners Medical specialists Dentists (incl. Specialists) x x + x Provincial hospitals Private hospitals Medicines Ex-Gratia payments Other benefits Allied and support health professionals Capitated primary care The trend analysis in figure 10 shows a continued increase in private hospital expenditure and a leveling off of public hospital expenditure. Expenditure on medicines also continues to rise, as does expenditure on medical specialists. General practitioners and dentists, on the other hand, have experienced a drop in the share of total expenditure. The significant drop in "other benefits" in 1999 is as a result of a definitional change, whereby allied and support health professionals were separately reported on. 23

26 eview of operations of Medical Schemes The next two figures (Figures 11 and 12) should be read together. These figures determine whether medical scheme balance sheets are adequately structured to absorb adverse claims fluctuations and other costs within a given financial period. As can be seen in both figures, the net current asset position of schemes has improved significantly from This also creates in the long-term a much reduced dependency on investments to fund claims and other costs. Figure 11 Capital structure millions Total assets Total liabilities Nett assets Investments Figure 12 Nett current position millions Current assets Current liabilities Accounts receivable Provision for O/S claims Cash and cash equivalents Nett current assets/(liabilities) Minimum reserves requirements egulation 29 of the Medical Schemes Act prescribes minimum accumulated funds to be maintained by medical schemes. Accumulated funds, excluding funds set aside for specific purposes and unrealized nondistributable reserves, must at all times be maintained, expressed as a percentage of gross annual contributions for the accounting period under review, at a level not less than 25%. This is subject to a phasing-in period from to During the required reserve ratio was 10% of gross contributions. The reserve ratio provides an indication of the financial soundness and sustainability of a medical scheme. In effect they represent a buffer against unforeseen and adverse fluctuations, and a medical scheme s ability to make good the claims of its members. 24

27 eview of operations of Medical Schemes The minimum accumulated funds (Nett assets) to be maintained for solvency purposes for all registered medical schemes were billion as at 31 December. Open schemes showed accumulated funds of billion while restricted schemes had reserves of billion. This translates into reserve levels of 13,35% for open schemes and 36,20% for restricted membership schemes, well above the statutory requirement of 10% during. Figure 13 Distribution of income (Open schemes with <10% Solvency ratio) 0.80% 1.54% 1.61% 3.15% 76.69% Net claims Administration expenditure 76.69% 12.75% 3.45% Managed care: Management services 3.45% Net increase in accumulated funds 3.15% 12.75% Net reinsurance result 1.61% Broker fees 1.54% Other 0.80% Figure 13 shows the distribution of income of open schemes that are not meeting the regulatory 10% solvency level for. Both administration (risk + savings) and managed care expenditure are higher than the open scheme industry average of 9,57% and 2,91% respectively. Figure 14 Distribution of income (estricted schemes with <10% Solvency ratio) 0.10% 0.23% 1.07% 5.11% 86.73% Net claims Administration expenditure Managed care: Management services Other 86.73% 6.75% 5.11% 1.07% 6.75% Net increase in accumulated funds 0.23% Net reinsurance result Broker fees 0.10% 0.0% Figure 14 shows the distribution of income of restricted schemes that are not meeting the regulatory 10% solvency level for. Both administration (risk and savings) and managed care expenditure are higher than the industry average for restricted schemes of 6,46% and 3,06% respectively. 25

28 eview of operations of Medical Schemes Figure 15 reflects the solvency position of the medical schemes industry. It illustrates the number of schemes and level of membership against different solvency levels. The different solvency levels have been determined in keeping with egulation 29 prescriptions, (10% for and 25% from 2004). Figure 15 Solvency - egistered Medical Scheme 40 Thousands Number of Medical Schemes Members <0% 0%-10% 10%- 25% 25%- 50% >50% No of MS - Open MS No of MS - estricted MS Membership - estricted MS Membership - Open MS The graph shows how open schemes with large membership have lower solvency levels compared with the higher solvency levels displayed by restricted schemes with smaller membership. Solvency levels as at 31 December % Categories Numbers of Medical Schemes Membership per category Open Schemes estricted Schemes Open Schemes estricted Schemes < 0% % - 10% % - 25% % - 50% > 50% Figure 16 Solvency - egistered Medical Schemes Industry average: Open Schemes: 13% estricted Schemes: 36% Number of Medical Schemes Thousands Members 0 - Below industry average Above industry average Below industry average Above industry average Open schemes estricted schemes Number of Medical Schemes Membership 26

29 eview of operations of Medical Schemes Figure 16 offers similar information, but with reference to the industry average solvency levels of 13% and 36%. The figure illustrates the inverse relationship between scheme size and solvency, and gives an appreciation of number of schemes within a particular category. The majority of schemes are restricted, but cover the minority of membership. Conversely, there are a smaller number of open schemes, but they cover the majority of the membership. On an industry basis, restricted scheme members are better covered by accumulated funds than members of open schemes. Compliance with submission of audited financial statements and statutory returns In terms of Section 37 of the Act, every medical scheme is required to submit to the egistrar its audited annual financial statements and statutory returns by 31 April in respect of its financial year. A number of faulty or incomplete returns once again gave rise to delays in the processing of the data. Better co-operation from the schemes in this regard will be appreciated. The following medical schemes were late in the submission of their documentation as required by the Act. The Act requires that penalties be imposed unless good cause can be shown. Annual financial statements Statutory return Deadline 31 May 2001 Deadline 30 June 2001 Aranda Automobile Association Cape Medical Plan CGU CTP Edcon u Erica Fedsure Health Finmed Ingwe Lamaf Meddent (Omnihealth) Medicover Methealth Openplan Natalmed Philips SA Eagle Selfmed The Venda Police and Prisons (Polprismed) Toyomed Vulamed Wooltru Automobile Association CGU CTP Edcon Fedsure Health Free State Lamaf Medicover Methealth Openplan SA Eagle The Venda Police and Prisons (Polprismed) Wooltru 27

30 Consolidated balance sheet Annexure A as at 31 December egistered Exempted Consolidated Assets Non-current Assets Property, Plant and Equipment Investments Current Assets Inventories Accounts eceivable Cash and Cash Equivalents Funds and Liabilities Members' Funds Accumulated Funds evaluation eserve - Investments evaluation eserve - Property, Plant and Equipment eserves set aside for specific projects Other eserves Non-current Liabilities Borrowings Current Liabilities Savings Plan Liability Accounts Payable Provision for Outstanding Claims Notes: * The 1999 closing balances for the following schemes that did not submit documents for financial year were brought forward: - CTP Medical Scheme - CGU Medical Scheme - Edcon Medical Aid Scheme - The Venda Police and Prisons Medical Aid Scheme - Wooltru Healthcare Fund - Building Industry (North & West Boland) - Electrical Industry (Natal) * Publiserve & Union flour were totally omitted due to their non-submission of data. These two schemes went into liquidation in * Please take note that the comparative figures have not been supplied due to the change in the disclosure format as required by SAICA, both definitional and data requirement changes. 28

31 Consolidated income statement Annexure B for the year ended 31 December egistered Exempted Consolidated Average PMPM Average PBPM Gross Contribution Income (Savings Contribution Income) ( ) (989) ( ) (Nett Claims Incurred) ( ) ( ) ( ) Own Facility Profit/(Loss) (15 877) - (15 877) -0-0 Gross Underwriting esults (Administration Expenditure) ( ) (80 420) ( ) (Managed care: Management Services) ( ) (4 642) ( ) (Broker Fees) ( ) - ( ) -7-3 Nett e-insurance Profit/(Loss) ( ) (2 572) ( ) -7-3 Nett Underwriting esults ( ) (85 566) ( ) (Bad Debts Written Off) (80 221) (674) (80 895) -3-1 Bad Debts ecovered Increase/(Decrease) in Provision for Bad Debts (85 557) (361) (85 918) -3-1 Profit/(Loss) from Operations ( ) (86 601) ( ) Other Income/(Loss) Nett Investment Income Profit/(Loss) on Sale of Investments Profit/(Loss) on Sale of Property, Plant and Equipment (Impairment losses on Property, Plant and Equipment) (63) - (63) -0-0 Nett Surplus/(Deficit) (51 174) Notes: * Please take note that the comparative figures have not been supplied due to the change in the disclosure format as required by SAICA, both definitional and data requirement changes. 29

32 Consolidated statement of changes in funds and reserves Annexure C for the year ended 31 December egistered Exempted Consolidated Average PMPM Average PBPM Accumulated Funds Balances at beginning of year As previously reported Prior year adjustment (329) Nett Profit/(Loss) for the year (51 174) Gains on remeasurement of properties and investments Losses on remeasurement of properties and investments Transfer to/(from) accumulated funds (152) Balances at end of year evaluation eserve (Investments) Balances at beginning of year Gains on remeasurement of investments Losses on remeasurement of investments (57 281) - (57 281) -2-1 Transfer (to)/from reserves (62 841) - (62 841) -2-1 Balances at end of year epresenting: - Investments relating to the Accumulated Funds Investments relating to the Savings plan accounts evaluation eserve (Property, Plant and Equipment) Balances at beginning of year Gains on remeasurement of property, plant and equipment (339) - (339) -0-0 Losses on remeasurement of property, plant and equipment (1 500) - (1 500) -0-0 Transfer (to)/from reserves Balances at end of year Other eserves Balances at beginning of year Transfer (to)/from reserves (24 065) - (24 065) -1-0 Balances at end of year eserves set aside for specific projects Balances at beginning of year Transfer (to)/from reserves (6 253) - (6 253) -0-0 Balances at end of year Notes: * The 1999 closing balances for the following schemes that did not submit documents for financial year were brought forward: - CTP Medical Scheme - CGU Medical Scheme - Edcon Medical Aid Scheme - The Venda Police and Prisons Medical Aid Scheme - Wooltru Healthcare Fund - Building Industry (North & West Boland) - Electrical Industry (Natal) * Publiserve & Union flour were totally omitted due to their non-submission of data. These two schemes went into liquidation in 2001 * Please take note that the comparative figures have not been supplied due to the change in the disclosure format as required by SAICA, both definitional and data requirement changes. 30

33 Consolidated membership analysis Annexure D as at 31 December Members Dependants Beneficiaries 1999 % 1999 % 1999 % Change Change Change egistered Schemes , , ,83 - Open schemes , , ,90 - estricted schemes , , ,12 Exempt Schemes , , ,26 Total , , ,44 Average Membership , , ,92 egistered schemes , , ,70 - Open schemes , , ,04 - estricted schemes , , ,24 Exempt schemes , , ,15 Average No of dependants per member 1,58 1,61 Overall Pensioner atio 6% 4% Note: * The 1999 closing balances for the following schemes that did not submit documents for financial year were brought forward: - CTP Medical Scheme - CGU Medical Scheme - Edcon Medical Aid Scheme - The Venda Police and Prisons Medical Aid Scheme - Wooltru Healthcare Fund - Building Industry (North & West Boland) - Electrical Industry (Natal) * Publiserve & Union flour were totally omitted due to their non-submission of data. These two schemes went into liquidation in

34 Analysis of all benefits paid Annexure E for the year ended 31 December egistered egistered egistered Exempt Consolidated Average PBPM Open estricted Total 1999 % 1999 % 1999 % 1999 % As % of As % of 000 % 000 % 000 Change 000 % 000 Change 000 % 000 Change Change GCI NCI Total hospitals , , , , , , , ,7 26,7 29,7 Provincial hospitals , , , , , , , ,9 0,6 0,7 Ward Fees , , , , , , , ,2 0,4 0,5 Theatre Fees , , , , , , , ,5 0,1 0,1 Consumables , , , , , , , ,6 0,1 0,1 Medicines dispensed , , , , , , , ,2 0,1 0,1 Private hospitals , , , , , , , ,4 25,5 28,3 Ward Fees , , , , , , , ,0 12,6 14,0 Theatre Fees , , , , , , , ,3 3,5 3,8 Consumables , , , , , , , ,3 5,5 6,1 Medicines dispensed , , , , , , , ,9 4,0 4,5 Global / per diem fee , , ,3-0,00-0, , , ,2 0,6 0,7 Medicines , , , , , , , ,1 23,7 26,3 Medicines dispensed by Pharmacists , , , , , , , ,7 17,4 19,3 Medicines dispensed by Practitioners , , , , , , , ,6 6,3 7,0 General Practitioners , , , , , , , ,7 7,4 8,2 Medical specialists , , , , , , , ,5 17,2 19,1 Dermatologists , , , , , , , ,0 0,2 0,2 Gynaecologists , , , , , , , ,5 1,3 1,4 Pulmonologist , ,06-100, ,03-100, ,06-100, ,0 0,1 0,1 Physicians , , , , , , , ,4 1,0 1,1 Gastroenterologist , ,05-100, ,03-100, ,06-100, ,0 0,0 0,1 Neurologists , , , , , , , ,4 0,2 0,2 Cardiologist , ,25-100, ,17-100, ,27-100, ,0 0,2 0,3 Psychiatrists , , , , , , , ,5 0,3 0,3 Medical Oncologist , ,09-100, ,07-100, ,12-100, ,0 0,1 0,1 Neuro-surgeons , , , , , , , ,7 0,3 0,3 Nuclear Medicine , ,17-100, ,04-100, ,14-100, ,0 0,1 0,1 Ophthalmologists , , , , , , , ,6 0,7 0,8 Orthopaedic Surgeons , , , , , , , ,4 0,8 0,9 Otorhinolaryngologists , , , , , , , ,1 0,4 0,4 Paediatricians , , , , , , , ,3 0,6 0,6 Paediatric Cardiologist , ,01-100,0 59 0,01-100, ,02-100, ,0 0,0 0,0 Specialists in Physical Medicine , , ,3 12 0, , , , ,9 0,0 0,0 Plastic & econstructive Surgeons , , , , , , , ,4 0,2 0,2 adiotherapists , , , , , , , ,9 0,6 0,7 Surgeons , , , , , , , ,4 0,8 0,9 Thoracic Surgeons , , , , , , , ,0 0,2 0,2 Urologists , , , , , , , ,6 0,3 0,3 Clinical support specialists - 0, Anaesthetists , , , , , , , ,6 1,2 1,4 adiologists , , , , , , , ,1 3,1 3,5 Pathologists , , , , , , , ,4 4,3 4,8 Laboratory Technologist , , , , , , , ,3 0,1 0,1 Other , ,07-100,0 13 0,00-100, ,22-100, ,0 0,2 0,2 Dentists , , , , , , , ,6 4,5 5,0 Dental specialists , , , , , , , ,6 0,9 1,0 Maxilla, Facial & Oral Surgeons , , , , , , , ,8 0,2 0,3 Oral Pathologists , , ,1 26 0, , , , ,6 0,0 0,0 Orthodontists , , , , , , , ,9 0,5 0,5 Periodontists , , , , , , , ,1 0,1 0,1 Prosthodontists , , , , , , , ,3 0,1 0,1 32

35 Analysis of all benefits paid Annexure E continued for the year ended 31 December egistered egistered egistered Exempt Consolidated Average PBPM Open estricted Total 1999 % 1999 % 1999 % 1999 % As % of As % of 000 % 000 % 000 Change 000 % 000 Change 000 % 000 Change Change GCI NCI Allied and support health professionals , , , , , , , ,8 5,7 6,3 Chiropractors & Osteopaths , , , , , , , ,0 0,1 0,1 Podiatrists , , , , , , , ,6 0,0 0,0 Optometrists , , , , , , , ,6 2,9 3,2 Physiotherapists , , , , , , , ,1 0,9 1,1 Orthoptists , , , , , , , ,7 0,0 0,0 Speech Therapists , , , , , , , ,7 0,1 0,2 Psychologists , , , , , , , ,4 0,5 0,5 Occupational Therapy , , , , , , , ,5 0,1 0,1 Private Nurses , , , , , , , ,8 0,1 0,1 Dieticians , , ,7 83 0, , , , ,5 0,0 0,0 Homeopaths , , , , , , , ,5 0,1 0,1 Naturopaths & Phytotherapists - 0,00 5 0,00-100,0 16 0,00-100,0 21 0,00-100, ,0 0,0 0,0 Therapeutic Massage, Aromatherapy & eflexology 6 0,00 1 0,00-100,0-0,00-0,0 7 0,00-100, ,0 0,0 0,0 Ayurvedic Practitioners - 0,00 3 0,00-100,0-0,00-0,0 3 0,00-100, ,0 0,0 0,0 Accupuncture & Chinese medicine 1 0,00 2 0,00-100,0-0,00-0,0 3 0,00-100, ,0 0,0 0,0 Medical Technologists , ,28-100, ,15-100, ,27-100, ,0 0,2 0,3 Other , , , , , , , ,5 0,6 0,7 Ex-gratia payments , , , , , , , ,2 0,1 0,2 Other benefits , , , , , , , ,2 1,4 1,5 Appliances (supplied outside hospitals excl prosthesis) , , , , , , , ,3 0,4 0,4 Prostheses , ,09-100,0 17 0,00-100, ,14-100, ,0 0,1 0,1 Ambulance Services , , , , , , , ,7 0,1 0,1 Other , , , , , , , ,3 0,8 0,9 Capitated primary care , ,08-100,0-0,00-0, ,33-100, ,0 0,3 0,3 Total benefits , , , ,34 87,9 97,6 Notes: * Due to changes in data requirements and definitional changes, the figures have been reallocated and might therefore not be directly comparable to the previous year's figures 33

36 Analysis of risk benefits paid Annexure F for the year ended 31 December egistered egistered egistered Exempt Consolidated Average PBPM Open estricted Total 1999 % 1999 % 1999 % 1999 % As % of As % of 000 % 000 % 000 Change 000 % 000 Change 000 % 000 Change Change GCI NCI Total hospitals , , , , , , , ,7 26,6 29,6 Provincial hospitals , , , , , , , ,7 0,6 0,7 Ward Fees , , , , , , , ,1 0,4 0,5 Theatre Fees , , , , , , , ,9 0,1 0,1 Consumables , , , , , , , ,6 0,1 0,1 Medicines dispensed , , , , , , , ,4 0,1 0,1 Private hospitals , , , , , , , ,4 25,4 28,2 Ward Fees , , , , , , , ,0 12,5 13,9 Theatre Fees , , , , , , , ,4 3,4 3,8 Consumables , , , , , , , ,0 5,4 6,1 Medicines dispensed , , , , , , , ,4 4,0 4,4 Global / per diem fee , , ,3-0,00-0, , , ,2 0,6 0,7 Medicines , , , , , , , ,2 20,1 22,4 Medicines dispensed by Pharmacists , , , , , , , ,0 14,7 16,3 Medicines dispensed by Practitioners , , , , , , , ,5 5,4 6,0 General Practitioners , , , , , , , ,6 6,0 6,7 Medical specialists , , , , , , , ,3 15,7 17,4 Dermatologists , , , , , , , ,1 0,1 0,2 Gynaecologists , , , , , , , ,8 1,1 1,2 Pulmonologist , ,07 100, ,03 100, ,06-100, ,0 0,0 0,1 Physicians , , , , , , , ,7 0,9 1,0 Gastroenterologist , ,05 100, ,03 100, ,05-100, ,0 0,0 0,0 Neurologists , , , , , , , ,3 0,2 0,2 Cardiologist , ,26 100, ,17 100, ,27-100, ,0 0,2 0,2 Psychiatrists , , , , , , , ,9 0,3 0,3 Medical Oncologist , ,09 100, ,07 100, ,13-100, ,0 0,1 0,1 Neuro-surgeons , , , , , , , ,9 0,2 0,3 Nuclear Medicine , ,19 100, ,04 100, ,15-100, ,0 0,1 0,1 Ophthalmologists , , , , , , , ,6 0,6 0,7 Orthopaedic Surgeons , , , , , , , ,2 0,8 0,9 Otorhinolaryngologists , , , , , , , ,2 0,4 0,4 Paediatricians , , , , , , , ,9 0,5 0,5 Paediatric Cardiologist , ,01 100,0 59 0,01 100, ,02-100, ,0 0,0 0,0 Specialists in Physical Medicine , , ,4 12 0, , , , ,5 0,0 0,0 Plastic & econstructive Surgeons , , , , , , , ,0 0,2 0,2 adiotherapists , , , , , , , ,6 0,6 0,6 Surgeons , , , , , , , ,4 0,7 0,8 Thoracic Surgeons , , , , , , , ,1 0,2 0,2 Urologists , , , , , , , ,8 0,3 0,3 Clinical Support specialists 0,0 - Anaesthetists , , , , , , , ,8 1,2 1,3 adiologists , , , , , , , ,0 2,8 3,2 Pathologists , , , , , , , ,4 3,8 4,3 Laboratory Technologist , , , , , , , ,8 0,1 0,1 Other , ,07 100,0 13 0,00 100, ,24-100, ,0 0,2 0,2 Dentists , , , , , , , ,5 3,6 4,0 Dental specialists , , , , , , , ,2 0,7 0,8 Maxilla, Facial & Oral Surgeons , , , , , , , ,0 0,2 0,2 Oral Pathologists , , ,2 26 0, , , , ,3 0,0 0,0 Orthodontists , , , , , , , ,2 0,4 0,4 Periodontists , , , , , , , ,3 0,0 0,0 Prosthodontists , , , , , , , ,3 0,0 0,0 34

37 Analysis of risk benefits paid Annexure F continued for the year ended 31 December egistered egistered egistered Exempt Consolidated Average PBPM Open estricted Total 1999 % 1999 % 1999 % 1999 % As % of As % of 000 % 000 % 000 Change 000 % 000 Change 000 % 000 Change Change GCI NCI Allied and support health professionals , , , , , , , ,9 4,5 5,0 Chiropractors & Osteopaths , , , , , , , ,2 0,0 0,0 Podiatrists , , , , , , , ,9 0,0 0,0 Optometrists , , , , , , , ,2 2,1 2,4 Physiotherapists , , , , , , , ,4 0,8 0,9 Orthoptists , , , , , , , ,0 0,0 0,0 Speech Therapists , , , , , , , ,5 0,1 0,1 Psychologists , , , , , , , ,1 0,4 0,4 Occupational Therapy , , , , , , , ,5 0,1 0,1 Private Nurses , , , , , , , ,9 0,1 0,1 Dieticians , , ,7 82 0, , , , ,6 0,0 0,0 Homeopaths , , , , , , , ,1 0,0 0,0 Naturopaths & Phytotherapists - 0,00 5 0,00 100,0 16 0,00 100,0 21 0,00-100, ,0 0,0 0,0 Therapeutic Massage, Aromatherapy & eflexology 1 0,00 1 0,00 100,0-0,00 0,0 2 0,00-100, ,0 0,0 0,0 Ayurvedic Practitioners - 0,00 3 0,00 100,0-0,00 0,0 3 0,00-100, ,0 0,0 0,0 Accupuncture & Chinese medicine 1 0,00 2 0,00 100,0-0,00 0,0 3 0,00-100, ,0 0,0 0,0 Medical Technologists , ,30 100, ,15 100, ,29-100, ,0 0,2 0,3 Other , , , , , , , ,0 0,6 0,6 Ex-gratia payments , , , , , , , ,3 0,1 0,2 Other benefits , , , , , , , ,8 1,2 1,4 Appliances (supplied outside hospitals excl prosthesis) , , , , , , , ,8 0,3 0,4 Prostheses , ,08 100,0 17 0,00 100, ,15-100, ,0 0,1 0,1 Ambulance Services , , , , , , , ,1 0,1 0,1 Other , , , , , , , ,9 0,7 0,7 Capitated primary care , ,08 100,0-0,00 0, ,36-100, ,0 0,3 0,3 Total benefits , , , ,2 79,0 87,8 Notes: * Due to changes in data requirements and definitional changes, the figures have been reallocated and might therefore not be directly comparable to the previous year's figures 35

38 Analysis of savings benefits paid Annexure G for the year ended 31 December egistered egistered egistered Exempt Consolidated Average PBPM Open estricted Total 1999 % 1999 % 1999 % 1999 % As % of As % of 000 % 000 % 000 Change 000 % 000 Change 000 % 000 Change Change GCI NCI Total hopitals , , ,5 0 0, , , , ,0 0,1 0,1 Provincial hospitals , , ,7-0, , , , ,4 0,0 0,0 Ward Fees 492 0, , ,6-0, , , , ,1 0,0 0,0 Theatre Fees 26 0,00 2 0, ,5-0,00-0,0 29 0, , ,9 0,0 0,0 Consumables 393 0, , ,1-0,00-0, , , ,2 0,0 0,0 Medicines dispensed 139 0, , ,2-0,00-0, , , ,6 0,0 0,0 Private hospitals , , ,5 0 0, , , , ,7 0,1 0,1 Ward Fees , , ,2-0, , , , ,0 0,0 0,0 Theatre Fees , , ,6-0,00-0, , , ,2 0,0 0,0 Consumables , , ,6 0 0,02-100, , , ,8 0,0 0,0 Medicines dispensed , , ,4-0,00-0, , , ,8 0,0 0,0 Global / per diem fee 0,00 0,00-0,0 0,00 0,0-0,00-0, ,0 0,0 0,0 Medicines , , , , , , , ,4 3,5 3,9 Medicines dispensed by Pharmacists , , , , , , , ,0 2,7 3,0 Medicines dispensed by Practitioners , , ,6 20 5, , , , ,7 0,9 1,0 General Practitioners , , , , , , , ,7 1,4 1,6 Medical specialists , , , , , , , ,6 1,5 1,6 Dermatologists , , ,2 1 0, , , , ,5 0,0 0,0 Gynaecologists , , ,5 8 2, , , , ,4 0,2 0,2 Pulmonologist , ,04 100,0-0,00 0, ,07-100, ,0 0,0 0,0 Physicians , , ,0 2 0, , , , ,6 0,1 0,1 Gastroenterologist , ,04 100,0-0,00 0, ,06-100, ,0 0,0 0,0 Neurologists , , ,7 1 0, , , , ,2 0,0 0,0 Cardiologist , ,19 100,0 1 0,29 100, ,26-100, ,0 0,0 0,0 Psychiatrists , , ,3-0, , , , ,2 0,0 0,0 Medical Oncologist 338 0, ,02 100,0 0 0,06 100, ,02-100, ,0 0,0 0,0 Neuro-surgeons , , ,9 0 0, , , , ,2 0,0 0,0 Nuclear Medicine , ,03 100,0 0 0,06 100, ,08-100, ,0 0,0 0,0 Ophthalmologists , , ,2 2 0,52-100, , , ,3 0,1 0,1 Orthopaedic Surgeons , , ,8 1 0, , , , ,8 0,0 0,0 Otorhinolaryngologists , , ,8 2 0, , , , ,5 0,0 0,0 Paediatricians , , ,0 1 0, , , , ,5 0,1 0,1 Paediatric Cardiologist 503 0, ,01 100,0-0,00 0, ,02-100, ,0 0,0 0,0 Specialists in Physical Medicine 47 0, , ,8-0,00-0,0 71 0, , ,2 0,0 0,0 Plastic & econstructive Surgeons , , ,2 0 0, , , , ,3 0,0 0,0 adiotherapists , , ,1 0 0, , , , ,1 0,0 0,0 Surgeons , , ,5 0 0, , , , ,1 0,0 0,0 Thoracic Surgeons 765 0, , ,0-0, , , , ,5 0,0 0,0 Urologists , , ,8 1 0, , , , ,7 0,0 0,0 Clinical support specialists 0,0 - Anaesthetists , , ,0-0, , , , ,7 0,0 0,0 adiologists , , ,5 19 5, , , , ,4 0,3 0,3 Pathologists , , ,1 31 8, , , , ,1 0,4 0,5 Laboratory Technologist 245 0, , ,1-0, , , , ,4 0,0 0,0 Other 637 0, ,01 100,0-0,00 0, ,03-100, ,0 0,0 0,0 Dentists , , , , , , , ,3 0,8 0,9 Dental specialists , , ,2 3 0, , , , ,3 0,2 0,2 Maxilla, Facial & Oral Surgeons , , ,7 0 0, , , , ,7 0,0 0,0 Oral Pathologists 41 0,00 6 0, ,1-0, ,0 47 0, , ,8 0,0 0,0 Orthodontists , , ,8 2 0, , , , ,9 0,1 0,1 Periodontists , , ,1 1 0, , , , ,2 0,0 0,0 Prosthodontists , , ,0-0, , , , ,5 0,0 0,0 36

39 Analysis of savings benefits paid Annexure G continued for the year ended 31 December egistered egistered egistered Exempt Consolidated Average PBPM Open estricted Total 1999 % 1999 % 1999 % 1999 % As % of As % of 000 % 000 % 000 Change 000 % 000 Change 000 % 000 Change Change GCI NCI Allied and support health professionals , , , , , , , ,2 1,2 1,3 Chiropractors & Osteopaths , , ,7 1 0, , , , ,3 0,0 0,0 Podiatrists , , ,0 2 0,61-100, , , ,7 0,0 0,0 Optometrists , , ,0 25 6, , , , ,8 0,8 0,8 Physiotherapists , , ,7 6 1, , , , ,5 0,2 0,2 Orthoptists 58 0, , ,1-0, ,0 72 0, , ,2 0,0 0,0 Speech Therapists , , ,1 1 0, , , , ,3 0,0 0,0 Psychologists , , ,5 7 1, , , , ,1 0,1 0,1 Occupational Therapy , , ,9-0, , , , ,2 0,0 0,0 Private Nurses , , ,7-0, , , , ,2 0,0 0,0 Dieticians , , ,9 0 0, , , , ,1 0,0 0,0 Homeopaths , , ,4 1 0,28-100, , , ,2 0,0 0,0 Naturopaths & Phytotherapists - 0,00-0,00 0,0-0,00 0,0-0,00-0, ,0 0,0 0,0 Therapeutic Massage, Aromatherapy & eflexology 5 0,00-0,00 100,0-0,00 0,0 5 0,00-100, ,0 0,0 0,0 Ayurvedic Practitioners - 0,00-0,00 0,0-0,00 0,0-0,00-0, ,0 0,0 0,0 Accupuncture & Chinese medicine - 0,00-0,00 0,0-0,00 0,0-0,00-0, ,0 0,0 0,0 Medical Technologists , ,04 100,0-0,00 0, ,14-100, ,0 0,0 0,0 Other , , ,4-0, , , , ,3 0,1 0,1 Ex-gratia payments - 0,00 9 0, ,8-0,00-0,0 9 0, , ,0 0,0 0,0 Other benefits , , ,0 8 2, , , , ,9 0,1 0,2 Appliances (supplied outside hospitals excl prosthesis) , , ,7 3 0, , , , ,4 0,0 0,0 Prostheses 275 0, ,14 100,0-0,00 0, ,05-100, ,0 0,0 0,0 Ambulance Services 274 0, , ,5-0, , , , ,3 0,0 0,0 Other , , ,7 6 1, , , , ,3 0,1 0,1 Captitated primary care - 0,00-0,00-0,0-0,00 0,0-0,00-0, ,0 0,0 0,0 Total benefits , , , ,6 8,9 9,9 Notes: * Due to changes in data requirements and definitional changes, the figures have been reallocated and might therefore not be directly comparable to the previous year's figures 37

40 Detailed financial results: egistered schemes Annexure H for the year ended 31 December Gross Administration expenses Managed Care: Net Nett claims Gross Under- Net Under- Profit/(Loss) Net Net Assets Net Assets (ISK + PMSA) Management Services Broker einsurance incurred Writing Writing from Surplus/ (Mem. Funds Per eg. Solvency ef. Name of Medical Scheme Members Beneficiaries Gross Contributions As % of As % of Fees esults Nett esults esults Operations (Deficit) per BS) 29 atio No. 31/12/00 31/12/ PBPM 000 GCI PBPM 000 GCI PBPM Contri. % % egistered Schemes - Open 1496 AllCare Medical Aid Scheme , ,38 40,10-0,00 0,00 - (1 311) 88, , Beland Medical Aid Society , ,84 62, ,37 19, ,74 (5 287) (8 324) (9 649) (7 595) , Bestmed Medical Scheme , ,91 32, ,51 11, (4 286) 99, (29 649) (30 149) (22 958) (2 805) -1, Bonitas Medical Fund , ,98 16, ,02 13, , (69 822) (69 931) , Cape Medical Plan , ,26 119, ,04 6, , (2 278) (2 199) , Caremed Medical Scheme , ,80 38, ,13 5, , (88 120) (94 400) (65 475) , Commercial and Ind. Med. Aid Society (CIMAS) , ,45 45, ,15 7, (534) 91, (2 095) (2 645) , Community Medical Aid Scheme (COMMED) , ,09 47, ,08 6, , (10 191) (10 191) , Compcare Medical Scheme , ,34 48, ,25 5, (453) 86, (2 603) (2 603) , Discovery Health Medical Scheme , ,69 55, ,74 11, ( ) 75, , Erica Medical Aid Society , ,90 42, ,74 17, ,44 (1 647) (3 304) (4 199) (3 287) , Fedsure Health , ,58 16, ,17 9, , (26 137) (45 035) (30 691) , Free State Medical Aid Scheme , ,16 30,17-0,00 0, ,96 (26) (288) (288) (80) , Genesis Medical Scheme , ,84 40, ,39 1, , , Gen-Health Medical Scheme , ,01 30,07-0,00 0, (1 566) 59, , Good Hope Medical Aid Society , ,48 12, ,67 1, , (105) (217) , Hosmed Medical Aid Scheme , ,30 22, ,03 17, (4 960) 78, (2 213) , Ingwe Health Plan , ,77 11, ,95 3, , , Kopano Healthcare , ,18 39, ,93 3, , (14 099) (14 562) (5 556) , Kwa-Zulu Natal Medical Aid Scheme , ,07 39, ,09 3, , , Lifemed Medical Scheme , ,04 47, ,24 5, (225) 86, (360) (360) , MEDDENT (Omnihealth) , ,49 34, ,82 13, (22 805) 88, (86 293) (83 609) (68 258) , Medical Expenses Distribution Society (MEDS) , ,49 34, ,30 22, ,78 (2 972) (16 564) (21 828) (9 289) , Medicover Medical Aid Scheme , ,44 50,47-0,00 0,00 - (41 734) 43, , Medihelp , ,93 34, ,25 7, , , Medimed Medical Scheme , ,08 22, ,26 4, , (2 201) (2 201) (1 056) , Medshield Medical Aid Society , ,67 43, ,46 16,92 - (4 718) 79, (64 936) (66 577) (62 375) (2 672) -0, Methealth Openplan Medical Scheme , ,47 25, ,61 12, (434) 93, (83 787) ( ) (83 888) , MSP Sizwe Medical Scheme , ,15 33, ,38 11, (3 405) 97, ( ) ( ) (88 405) , Munimed , ,65 62,01-0,00 0, , (27 562) (29 303) (15 963) , Natalmed Medical Scheme , ,85 33,57-0,00 0, , (41) (206) , National Independent Med. Aid Soc. (NIMAS) , ,79 24,60-0,00 0, (39) 89, , National Medical Plan (NMP) , ,17 36, ,73 21, (995) 84, , NBC Medical Aid Society , ,35 64, ,01 17, (504) 90, (9 574) (9 666) (8 702) , Pharos Medical Plan , ,60 47, ,21 9, , , Phila Medical Scheme , ,71 29, ,18 15,47 - (291) 97, (14 643) (14 644) (13 602) , Pro Sano Medical Scheme , ,79 37, ,45 5, , (38 538) (30 296) , Protea Medical Aid Society , ,10 62, ,35 17, , , ProVia Medical Scheme , ,43 45,54-0,00 0,00 - (29 292) 64, , esolution Health Medical Scheme , ,93 34, ,04 2,86 - (424) 72, (589) (583) (504) (1 431) , Selfmed Medical Scheme , ,80 66, ,40 7,24 - (17 921) 75, , Spectramed , ,08 22, ,98 5, (5 938) 80, , Telemed , ,04 31, ,63 10,13 - (3 963) 96, (22 637) (23 976) (7 076) , Topmed Medical Scheme , ,76 58, ,24 6, , , Vaalmed (Protector Health) , ,45 19,14-0,00 0, ,07 (5 938) (13 871) (15 785) (12 929) ,71 38

41 Detailed financial results: egistered schemes Annexure H continued for the year ended 31 December Gross Administration expenses Managed Care: Net Nett claims Gross Under- Net Under- Profit/(Loss) Net Net Assets Net Assets (ISK + PMSA) Management Services Broker einsurance incurred Writing Writing from Surplus/ (Mem. Funds Per eg. Solvency ef. Name of Medical Scheme Members Beneficiaries Gross Contributions As % of As % of Fees esults Nett esults esults Operations (Deficit) per BS) 29 atio No. 31/12/00 31/12/ PBPM 000 GCI PBPM 000 GCI PBPM Contri. % % 1148 Visimed Medical Scheme , ,41 55, ,67 10, , (2 589) (396) , Vulamed , ,85 12,88-0,00 0, (1 765) 82, (2 416) (2 616) (1 735) ,00 Sub-Total - egistered Open schemes , ,57 34, ,91 10, ( ) 87, ( ) ( ) (96 765) ,35 egistered schemes - estricted 1553 ABI Medical Aid Scheme , ,48 25, ,66 14, , (432) (476) , AECI Medical Aid Society , ,84 26, ,17 4, ,61 (1 945) (11 651) (11 906) (3 646) , Afrox Medical Aid Society , ,19 26, ,34 1, , (4 045) (4 132) , Alliance Midmed Medical Scheme , ,87 28, ,48 14,53 - (430) 95, (1 430) (1 505) , Alpha Group Medical Aid Society , ,29 37, ,01 10, , (170) , Altron Medical Aid Scheme , ,51 36, ,77 3,71 - (950) 85, , Ammosal Benefit Society , ,60 773,89-0,00 0, ,68 (18) (101) (101) (39) , Anglo American Corp. Med. Scheme (AACMED) , ,18 30, ,59 12,61 - (533) 99, (29 292) (29 881) , Anglogold Medical Scheme (Goldmed) , ,79 36, ,02 132, , (4 639) (4 672) (3 419) (1 028) -0, Anglovaal Group Medical Scheme , ,55 37, ,69 3,49 - (242) 87, , Aranda Textiles Medical Scheme ,98 2 0,47 0,26-0,00 0, , , Aumed Medical Aid Scheme , ,26 37, ,51 2, , , Bankmed Medical Scheme , ,89 27, ,42 9, , , Barlows Medical Scheme , ,21 26, ,40 17, ,69 (6 397) (16 082) (16 212) , Billmed Medical Scheme , ,14 41, ,51 4,12 - (36) 81, , BMW Employees Medical Aid Society , ,38 19, ,18 15, , (878) (1 033) (890) , BP Medical Aid Society , ,25 3, ,78 5,11 - (98) 123,67 (5 228) (5 996) (6 020) (2 345) , Cawmed Medical Scheme , ,47 110,34-0,00 0, ,00 (6 034) (7 112) (7 112) (2 492) , Chamber of Mines Medical Aid Society , ,25 42,73-0,00 0, ,42 (2 057) (3 042) (3 042) (3 825) , Chartered Accountants SA Med. Aid Fund (CAMAF) , ,40 56, ,15 6,28 - (379) 87, (1 970) (1 800) , Clicks Group Medical Scheme , ,97 25,67-0,00 0,00 - (304) 91, (810) (1 418) (410) , CSI Medical Scheme , ,64 51, ,59 3,16 - (453) 90, (1 850) (1 850) , Da Gama Medical Scheme , ,15 27,14-0,00 0, ,90 (202) (675) (677) (266) , DCMed , ,57 24, ,40 11, ,77 (2 596) (7 266) (7 744) , De Beers Benefit Society , ,01 18, ,76 6, , , Ellerine Holdings Medical Aid Society , ,78 18, ,66 2, , (16) (23) , Engen Medical Benefit Fund , ,19 18, ,55 6, , , Finmed Medical Aid Scheme , ,84 0, ,49 0,00 - (1 794) 93, (10 673) (18 761) (16 856) - - 0, Food Workers Medical Benefit Fund , ,07 5,11-0,00 0, , , Foschini Group Medical Aid Scheme , ,32 27, ,27 9,74 - (292) 73, , Golden Arrow Employees Med. Ben. Fund , ,81 12,14-0,00 0, , , Grintek Electronics Medical Aid Scheme , ,87 41,65-0,00 0, , (93) (93) , Group Five Medical Scheme , ,27 32, ,36 22,91 - (400) 80, , Haggie Medical Scheme , ,73 31, ,99 16, ,03 (509) (1 972) (1 961) (587) , Highveld Medical Scheme , ,91 12,51-0,00 0, , , IBM Medical Aid Society , ,01 48,23-0,00 0, , (225) (225) , ICS Medical Aid Society , ,64 44, ,26 18, ,33 (2 117) (3 623) (3 734) (3 087) , Imperial Group Medical Scheme , ,10 24, ,75 2,98 - (86) 91, (66) (698) , Independent Newspapers Med. Aid Soc , ,44 24, ,66 21, ,11 (2 700) (6 536) (6 651) (6 420) , JCI Medical Aid Scheme , ,62 35,93-0,00 0, ,99 (1 740) (3 231) (2 898) (808) , Jhb Met.Chamber of Com. and Ind. Med. Aid Soc , ,58 63, ,81 6, ,50 (190) (3 329) (2 943) (542) , Jomed Medical Scheme , ,78 25, ,98 6, , ,75 39

42 Detailed financial results: egistered schemes Annexure H continued for the year ended 31 December Gross Administration expenses Managed Care: Net Nett claims Gross Under- Net Under- Profit/(Loss) Net Net Assets Net Assets (ISK + PMSA) Management Services Broker einsurance incurred Writing Writing from Surplus/ (Mem. Funds Per eg. Solvency ef. Name of Medical Scheme Members Beneficiaries Gross Contributions As % of As % of Fees esults Nett esults esults Operations (Deficit) per BS) 29 atio No. 31/12/00 31/12/ PBPM 000 GCI PBPM 000 GCI PBPM Contri. % % 1121 Klerksdorp Medical Benefit Society (KDM) , ,56 12,32-0,00 0, ,27 (7 027) (10 466) (10 826) , KPMG Medical Aid Society , ,98 7, ,95 3, ,28 (138) , Lamaf Medical Scheme , ,72 30, ,42 18,22 - (9 019) 88, (6 538) (6 997) (2 474) , Libcare Medical Scheme , ,10 29, ,89 4, , (3 344) (3 644) , Malcor Medical Aid Scheme , ,68 36, ,86 5, , , MASSMAT (Makro) , ,70 27, ,38 9, ,67 (174) (3 333) (4 033) (2 665) , Medipos Medical Scheme , ,46 27, ,75 3, , , Medisense Medical Scheme , ,41 38, ,49 2, , (30 213) , Medsure Medical Aid Scheme , ,01 24, ,13 12, , (657) , Metrocare Medical Aid Scheme , ,66 17, ,13 8, , (2 226) (2 281) (1 454) , Metropolitan Medical Scheme , ,14 0, ,18 6, ,38 (1 253) (2 476) (2 932) (526) , Minemed Medical Scheme , ,30 22, ,50 1, , , Moremed Medical Scheme , ,81 45, ,08 0,20 - (242) 88, (2 813) (2 789) (1 496) , Murray & oberts Medical Aid Society , ,02 0, ,81 0, ,15 (27) (3 146) (2 472) (1 107) - - 0, Mutual & Federal Medical Aid Fund , ,67 34, ,26 6,57 - (329) 81, , Nampak Group Medical Scheme , ,06 29, ,17 9, , (373) (741) , Naspers Medical Fund , ,18 0, ,33 1, ,00 (3 508) (3 886) (3 993) (6 657) , NBS Group Medical Aid Fund ,79-0,00 0,00-0,00 0, , , Nedcor Medical Aid Scheme , ,58 25, ,01 3, , , Oilmed , ,42 12, ,04 11, , , Old Mutual Staff Medical Aid Fund , ,07 28, ,29 4,59 - (188) 95, (6 891) (7 100) (903) , Parmed Medical Aid Scheme , ,64 29,57-0,00 0, , (2 179) , PG Bison Medical Aid Society , ,70 38,51-0,00 0, , , PG Group Medical Aid Scheme , ,47 54,22-0,00 0,00 - (55) 98, (1 782) (1 564) (137) , Philips Medical Scheme , ,46 0, ,08 0, ,37 30 (223) (223) (769) - - 0, Pick & Pay Medical Scheme , ,49 33, ,99 7, , , Platmed , ,73 12, ,03 8, , , Premier Medical Plan , ,09 0, ,21 0, , (1 197) (1 040) , Pretmed , ,29 33, ,80 5, , (1 599) (1 622) (542) , Profmed , ,60 31, ,11 3, , , Quantum Medical Aid Society , ,15 31, ,45 21, , (5 346) (5 499) , and Water Medical Scheme ,89-0,00 0, ,87 3, ,85 (3 447) (1 284) (1 284) , elyant Medical Aid Society , ,42 32, ,53 9, ,79 (3 443) (5 713) (5 757) (4 394) , emedi Medical Aid Scheme , ,01 25, ,41 5,96 - (504) 90, , SA Breweries Medical Aid Society , ,31 24, ,04 15, ,86 (3 607) (9 063) (9 222) (8 808) , SA Eagle Medical Aid Society , ,72 29, ,40 6, ,39 (994) (840) (840) (150) , SA Police Service Medical Scheme (Polmed) , ,67 23, ,01 16, , , Saammed Medical Scheme , ,05 31, ,84 3,72 - (84) 101,89 (297) (1 783) (1 920) (789) , SAB Castellion Medical Scheme , ,82 21, ,53 11, , (904) (1 358) (770) , SABC Medical Aid Scheme , ,72 23, ,19 16, , (1 299) (1 253) (3 154) , Samancor Health Plan , ,66 21, ,87 2, ,27 (219) (5 486) (6 242) (3 717) , SAMWU Medical Benefit Fund , ,86 14,83-0,00 0, , , Sappi Medical Aid Scheme , ,20 23, ,38 10,94 - (203) 87, , Sasolmed , ,70 16, ,53 15, , (3 429) (3 067) , Sedmed , ,69 0,76-0,00 0, ,00 - (14) (14) , Shoprite Medical Scheme , ,28 31, ,01 20,16 - (1 631) 96, (5 284) (5 661) (1 813) ,32 40

43 Detailed financial results: egistered schemes Annexure H continued for the year ended 31 December Gross Administration expenses Managed Care: Net Nett claims Gross Under- Net Under- Profit/(Loss) Net Net Assets Net Assets (ISK + PMSA) Management Services Broker einsurance incurred Writing Writing from Surplus/ (Mem. Funds Per eg. Solvency ef. Name of Medical Scheme Members Beneficiaries Gross Contributions As % of As % of Fees esults Nett esults esults Operations (Deficit) per BS) 29 atio No. 31/12/00 31/12/ PBPM 000 GCI PBPM 000 GCI PBPM Contri. % % 1243 Siemens Medical Scheme , ,37 24, ,81 8, , , Southern Sun Medical Aid Scheme , ,09 44, ,63 31, , , Stocksmed , ,92 29, ,78 19, , (3) , Tiger Brands Medical Scheme , ,24 19,78-0,00 0, , , Toyomed The Toyota Medical Society , ,29 28, ,31 12, , , Transmed , ,17 27, ,76 10, , (60 942) (68 166) (34 083) (90 912) (90 912) -8, Trawlermen's Medical Benefit Fund , ,00 16,11-0,00 0, , (291) (291) (141) , Umed , ,19 24, ,18 5, , (6 748) (6 890) , Universal Medical Scheme ,00 8 0,00 61,34-0,00 0, ,00 1 (8) (8) , University of Natal Medical Scheme , ,71 20, ,49 10, , (2 160) (2 160) (916) , University of the Witwatersrand Staff Med. Aid Scheme , ,92 22, ,20 14, , , Witbank Coalfields Medical Aid Society , ,59 11, ,53 2, ,14 (11 163) (15 435) (15 543) (5 871) , X-Strata Medical Aid Scheme , ,20 21, ,35 14, , (19) ,25 Sub-Total - egistered estricted Schemes , ,46 26, ,06 12, (1 506) 108, ( ) ( ) ,20 Total - egistered Schemes , ,58 32, ,96 11, ( ) 86, ( ) ( ) ,63 Notes: The figures have been restated due to a rejection of the audited financial statements. An appeal has been lodged by the relevant scheme as the scheme maintains that its solvency ratio is The figures have been restated due to a rejection of the audited financial statements, which was subsequently corrected by the scheme's auditors. A subordinated loan was taken into account in respect of the solvency ratio. A subordinated loan was taken into account in respect of the solvency ratio. * The following schemes did not submit their results at the time of printing this report, and were omitted from this particular schedule: - CTP Medical Scheme - CGU Medical Scheme - Edcon Medical Aid Scheme - The Venda Police and Prisons Medical Aid Scheme - Wooltru Healthcare Fund - Publiserve - Union Flour 41

44 Detailed financial information: egistered schemes Annexure I for the year ended 31 December ef. No. Name of Medical Scheme Beneficiaries 31/12/ 31/12/1999 % Growth No. of Dependants per member Pensioner atio 000 Gross Contribution Income (GCI) % Growth PMPM PBPM 000 Net claims incurred (incl. PMSA claims) % Growth As % of GCI PMPM PBPM Gross Administration expenses (incl. PMSA & Managed care) % Growth As % of GCI PMPM PBPM 000 Net Assets (incl. All eserves) per Balance Sheet % Growth PMPM PBPM egistered Schemes - Open 1496 AllCare Medical Aid Scheme ,81 3, Beland Medical Aid Society ,19 19, Bestmed Medical Scheme ,53 7, Bonitas Medical Fund ,89 1, Cape Medical Plan ,33 3, Caremed Medical Scheme ,66 4, Commercial and Industrial Medical Aid Society (CIMAS) ,62 12, Community Medical Aid Scheme (COMMED) ,93 1, Compcare Medical Scheme ,70 3, Discovery Health Medical Scheme ,42 2, Erica Medical Aid Society ,52 100, Fedsure Health ,58 3, Free State Medical Aid Scheme ,78 18, Genesis Medical Scheme ,56 0, Gen-Health Medical Scheme ,84 0, Good Hope Medical Aid Society ,86 1, Hosmed Medical Aid Scheme ,71 0, Ingwe Health Plan ,27 0, Kopano Healthcare ,51 8, Kwa-Zulu Natal Medical Aid Scheme ,85 0, Lifemed Medical Scheme ,81 3, MEDDENT (Omnihealth) ,81 4, Medical Expenses Distribution Society (MEDS) ,37 14, Medicover Medical Aid Scheme ,57 0, Medihelp ,91 20, Medimed Medical Scheme ,07 3, Medshield Medical Aid Society ,25 1, Methealth Openplan Medical Scheme ,61 5, MSP Sizwe Medical Scheme ,88 12, Munimed ,57 8, Natalmed Medical Scheme ,50 6, National Independent Medical Aid Society (NIMAS) ,44 4, National Medical Plan (NMP) ,34 8, NBC Medical Aid Society ,75 2, Northern Medical Aid Society ,00 0, (11 243) Pharos Medical Plan ,63 5, Phila Medical Scheme ,66 2, Pro Sano Medical Scheme ,80 4, Protea Medical Aid Society ,74 37, ProVia Medical Scheme ,41 2, Publiserve Healthcare Scheme ,00 0, (3 868) esolution Health Medical Scheme ,53 3, (1 431) Selfmed Medical Scheme ,32 7, Spectramed ,42 4, Telemed ,44 8, Topmed Medical Scheme ,53 6, Vaalmed (Protector Health) ,52 11, Visimed Medical Scheme ,38 0, Vulamed ,78 13, Sub-Total - egistered Open Schemes ,

45 Detailed financial information: egistered schemes Annexure I continued for the year ended 31 December ef. No. Name of Medical Scheme Beneficiaries 31/12/ 31/12/1999 % Growth No. of Dependants per member Pensioner atio 000 Gross Contribution Income (GCI) % Growth PMPM PBPM 000 Net claims incurred (incl. PMSA claims) % Growth As % of GCI PMPM PBPM Gross Administration expenses (incl. PMSA & Managed care) % Growth As % of GCI PMPM PBPM 000 Net Assets (incl. All eserves) per Balance Sheet % Growth PMPM PBPM egistered Schemes - estricted 1553 ABI Medical Aid Scheme ,87 2, AECI Medical Aid Society ,63 12, Afrox Medical Aid Society ,57 4, Alliance Midmed Medical Scheme ,88 1, Alpha Group Medical Aid Society ,70 9, Altron Medical Aid Scheme ,49 1, Ammosal Benefit Society ,29 75, (10) Anglo American Corporation Medical Scheme (AACMED) ,71 9, Anglogold Medical Scheme (Goldmed) ,67 3, Anglovaal Group Medical Scheme ,45 11, Aranda Textiles Medical Scheme ,00 0, Aumed Medical Aid Scheme ,67 6, Automobile Association Medical Aid Society ,00 0, Bankmed Medical Scheme ,14 4, Barlows Medical Scheme ,43 15, Billmed Medical Scheme ,20 30, BMW Employees Medical Aid Society ,98 13, BP Medical Aid Society ,71 14, Cawmed Medical Scheme ,35 43, CGU Medical Aid Scheme ,14 0, Chamber of Mines Medical Aid Society ,88 37, Chartered Accountants SA Medical Aid Fund (CAMAF) ,84 4, Clicks Group Medical Scheme ,20 1, CNA Gallo Medical Aid Society ,00 0, CSI Medical Scheme ,32 15, CTP Medical Aid Society ,91 0, Da Gama Medical Scheme ,40 11, DCMed ,52 1, De Beers Benefit Society ,69 6, Edcon Medical Aid Society ,24 0, Ellerine Holdings Medical Aid Society ,82 1, Engen Medical Benefit Fund ,83 10, Finmed Medical Aid Scheme ,00 0, Food Workers Medical Benefit Fund ,30 0, Foschini Group Medical Aid Scheme ,09 3, General Accident ,00 0, Golden Arrow Employees Medical Benefit Fund ,81 4, Grintek Electronics Medical Aid Scheme ,60 1, Group Five Medical Scheme ,62 8, Haggie Medical Scheme ,52 13, Highveld Medical Scheme ,79 4, IBM Medical Aid Society ,53 3, ICS Medical Aid Society ,11 27, Imperial Group Medical Scheme ,52 2, Independent Newspapers Medical Aid Society ,27 13, JCI Medical Aid Scheme ,33 13, Jhb Metropolitan Chamber of Commerce and Industry Med,Aid Soc, ,89 27, Jomed Medical Scheme ,19 14, Klerksdorp Medical Benefit Society (KDM) ,67 12, KPMG Medical Aid Society ,53 2, Lamaf Medical Scheme ,35 100,

46 Detailed financial information: egistered schemes Annexure I continued for the year ended 31 December ef. No. Name of Medical Scheme Beneficiaries 31/12/ 31/12/1999 % Growth No. of Dependants per member Pensioner atio 000 Gross Contribution Income (GCI) % Growth PMPM PBPM 000 Net claims incurred (incl. PMSA claims) % Growth As % of GCI PMPM PBPM Gross Administration expenses (incl. PMSA & Managed care) % Growth As % of GCI PMPM PBPM 000 Net Assets (incl. All eserves) per Balance Sheet % Growth PMPM PBPM 1197 Libcare Medical Scheme ,43 12, Malcor Medical Aid Scheme ,46 2, MASSMAT (Makro) ,17 5, Medical Services Plan (MSP) ,00 0, Medipos Medical Scheme ,25 9, Medisense Medical Scheme ,30 9, (30 213) (34 648) Medsure Medical Aid Scheme ,33 10, Metrocare Medical Aid Scheme ,91 2, Metropolitan Medical Scheme ,80 3, Minemed Medical Scheme ,40 9, Moremed Medical Scheme ,36 2, Murray & oberts Medical aid Society ,00 0, Mutual & Federal Medical Aid Fund ,11 12, Nampak Group Medical Scheme ,84 4, Naspers Medical Fund ,26 4, NBS Group Medical Aid Fund ,32 2, Nedcor Medical Aid Scheme ,27 5, Ninham Shand Medical Aid Society ,00 0, Oilmed ,82 1, Old Mutual Staff Medical Aid Fund ,38 5, Parmed Medical Aid Scheme ,83 18, Perskor Medical Fund ,00 0, PG Bison Medical Aid Society ,57 12, PG Group Medical Aid Scheme ,14 16, Philips Medical Scheme ,00 0, Pick & Pay Medical Scheme ,45 2, Platmed ,80 3, Premier Medical Plan ,00 0, Pretmed ,33 0, Printing Industry Medical Aid Society (PIMAS) ,00 0, Profmed ,89 5, Quantum Medical Aid Society ,23 4, and Water Medical Scheme ,22 100, egional Medical Scheme ,00 0, elyant Medical Aid Society ,53 4, emedi Medical Aid Scheme ,50 3, SA Breweries Medical Aid Society ,63 5, SA Eagle Medical Aid Society ,18 7, SA Police Service Medical Scheme (Polmed) ,69 2, Saammed Medical Scheme ,11 3, SAB Castellion Medical Scheme ,17 1, SABC Medical Aid Scheme ,47 7, SAKAV Medical Fund ,00 0, Samancor Health Plan ,47 3, SAMWU Medical Benefit Fund ,01 72, Sappi Medical Aid Scheme ,66 7, Sasolmed ,81 4, Sedmed ,64 8, Shoprite Medical Scheme ,16 11, Siemens Medical Scheme ,47 5, Southern Sun Medical Aid Scheme ,09 2, Stocksmed ,68 3,

47 Annexure I continued for the year ended 31 December ef. No. Name of Medical Scheme Beneficiaries 31/12/ 31/12/1999 % Growth No. of Dependants per member Pensioner atio 000 Gross Contribution Income (GCI) % Growth PMPM PBPM 000 Net claims incurred (incl. PMSA claims) % Growth As % of GCI PMPM PBPM % Growth As % of GCI PMPM PBPM 000 Net Assets (incl. All eserves) per Balance Sheet % Growth PMPM PBPM 1260 Tafelberg Medical Aid Society ,00 0, Tiger Brands Medical Scheme ,71 7, Toyomed The Toyota Medical Society ,12 3, Transmed ,27 0, (90 912) (56 829) Trawlermen's Medical Benefit Fund ,52 0, Umed ,71 7, Union Flour Mills Sick Fund ,00 0, Universal Medical Scheme ,50 0, University of Natal Medical Scheme ,29 10, University of the Witwatersrand Staff Medical Aid Scheme ,36 9, Venda Police and Prisons Medical Aid Society (POLPISMED) ,49 0, Witbank Coalfields Medical Aid Society ,88 4, Wooltru Healthcare Fund ,21 0, X-Strata Medical Aid Scheme ,03 0, (1 263) Sub-total - egistered estricted Schemes , , Total egistered Schemes ,34 1, , , , , Notes: * Please take note that due to changes in data requirements and definitional changes, the 1999 figures as obtained from the 1999 statutory return database might not be directly comparable with the figures for some schemes who re-stated their 1999 figures in their Annual Financial Statements * Please take note that the pensioner ratios of certain schemes are either 0 or 100 due to the scheme not supplying the information or the scheme has placed the figures in one line item * The 1999 figures have been restated taking the following into account: -POLMED and TANSMED registered during the year -Omission of previous liquidated schemes' balances carried forward in Change in the treatment of re-insurance which used to be part of nett claims incurred * The 1999 closing balances for the following schemes that did not submit documents for financial year were brought forward: - CTP Medical Scheme - CGU Medical Scheme - Edcon Medical Aid Scheme - The Venda Police and Prisons Medical Aid Scheme - Wooltru Healthcare Fund - Publiserve & Union flour were omitted due to their liquidation in 2001 * There will be no figures for the color coded schemes due to: - Schemes liquidating during the year - Scheme amalgamating with other schemes during the year Detailed financial information: egistered schemes Gross Administration expenses (incl. PMSA & Managed care) 45

48 Detailed financial results: Exempted schemes Annexure J for the year ended 31 December Gross Administration expenses Managed Care: Net Nett claims Gross Under- Net Under- Profit/(Loss) Net Net Assets Net Assets (ISK + PMSA) Management Services einsurance incurred Writing Writing from Surplus/ (Mem. Funds Per eg. Solvency ef. Name of Medical Scheme Members Beneficiaries Gross Contributions As % of As % of esults Nett Contr. esults esults Operations (Deficit) per BS) 29 atio No. 31/12/00 31/12/ PBPM 000 GCI PBPM 000 GCI PBPM 000 % % 3456 Autoworkers Medical Aid Fund (Automed) , ,84 8,07-0,00 0,00-87, , Building Industry Medical Aid Fund (Bloemfontein) , ,21 32,85-0,00 0,00-53,69 76 (21) (21) , Building Industry Medical Aid Fund (East London) , ,23 48,21-0,00 0,00-129,35 (320) (649) (649) (484) , Building Industry Medical Aid Fund (Eastern Cape) , ,26 29,47-0,00 0,00-73, , Building Industry Medical Aid Fund (Gauteng) , ,11 19,06-0,00 0,00-71, , Building Industry Medical Aid Fund (Kimberly) , ,58 25,55-0,00 0,00-41, (294) (294) (99) , Building Industry Medical Aid Fund (Western Cape) , ,93 12,73-0,00 0,00-84, (1 009) (1 009) (1 015) , Clothing Industry (Cape Town) , ,49 5,27-0,00 0,00-80, (7) (7) , Clothing Industry (Free State & Nothern Cape) , ,64 4,85-0,00 0,00-87,13 20 (6) (6) , Clothing Industry (Natal) , ,76 16,34-0,00 0,00-54, , Clothing Industry (Northern Areas) , ,34 7,58-0,00 0,00-72, , Electrical Industry (Cape) , ,53 8, ,41 3,53-92, (371) (371) (109) , Furniture & Allied Workers (S.W.D.) , ,85 3,24-0,00 0,00-112,12 (89) (154) (154) (96) , Furniture Workers (Natal) , ,48 12,21-0,00 0,00-45, , Hairdressers (Natal) , ,83 27,01-0,00 0,00-47, , Hairmed , ,34 39,61-0,00 0,00 (2 572) 59, (486) (423) , Knitting Industry (Northern Areas) , ,02 5,65-0,00 0,00-58, , MEDCO , ,77 31,13-0,00 0,00-109,87 (53 194) (89 685) (89 685) (86 692) (83 597) (83 597) -15, Motor Industry Medical Aid Fund (MIMED) , ,80 24, ,62 6,71-95, (7 812) (7 812) ,95 Total - Exemtp Schemes , ,96 17, ,46 0,99 (2 572) 95, (85 566) (86 601) (51 174) ,40 Note: * The following schemes did not submit their results at the time of printing this report, and were omitted from this particular schedule: - Building Industry (North & West Boland) - Electrical Industry (Natal) 46

49 Detailed financial information: Exempted schemes Annexure K for the year ended 31 December ef. No. Name of Medical Scheme Beneficiaries 31/12/ 31/12/1999 % Growth No. of Dependants per member Pensioner atio 000 Gross Contribution Income (GCI) % Growth PMPM PBPM 000 Net claims incurred (incl. PMSA claims) % Growth As % of GCI PMPM PBPM Gross Administration expenses (incl. PMSA & Managed care) % Growth As % of GCI PMPM PBPM 000 Net Assets (incl. All eserves) per Balance Sheet % Growth PMPM PBPM 3456 Autoworkers Medical Aid Fund (Automed) ,97 0, Building Industry Medical Aid Fund (Bloemfontein) ,67 3, Building Industry Medical Aid Fund (East London) ,54 0, Building Industry Medical Aid Fund (Eastern Cape) ,84 6, (310) Building Industry Medical Aid Fund (Gauteng) ,10 7, (8 231) Building Industry Medical Aid Fund (Kimberly) ,28 0, Building Industry Medical Aid Fund (North & West Boland) ,91 0, Building Industry Medical Aid Fund (Western Cape) ,61 100, Clothing Industry (Cape Town) ,64 0, Clothing Industry (Free State & Nothern Cape) , Clothing Industry (Natal) , Clothing Industry (Northern Areas) , Electrical Industry (Cape) ,68 2, Electrical Industry (Natal) ,35 0, Furniture & Allied Workers (S,W,D,) ,96 0, Furniture Workers (Natal) ,00 100, Hairdressers (Natal) ,20 2, Hairmed ,37 6, Knitting Industry (Northern Areas) ,16 0, Laundry Natal , MEDCO ,64 2, (83 597) Motor Industry Medical Aid Fund (MIMED) ,27 10, Total Exempt Schemes , , Notes: * The 1999 figures have been restated taking the following into account: - POLMED and TANSMED registered during the year - Omission of previous liquidated schemes' balances carried forward in Change in the treatment of re-insurance which used to be part of nett claims incurred * The 1999 closing balances for the following schemes that did not submit documents for financial year were brought forward: - Building Industry (North & West Boland) - Electrical Industry (Natal) - Laundry Natal were omitted due to the office not being able to establish contact with them * Please take note that the pensioner ratios of certain schemes are either 0 or 100 due to the scheme not supplying the information or the scheme has placed the figures in one line item 47

50 Explanatory notes to the annexures as at 31 December * At the time of preparing this report, the following medical schemes had not submitted Audited Financial Statements or Statutory eturns for the financial year end: ef no. Name 1065 CTP Medical Aid Society 1050 CGU Medical Aid Scheme 1484 Edcon Medical Aid Scheme 1558 Publiserve Healthcare Scheme 1276 Union Flour Mills Sick Fund 1565 The Venda Police and Prisons Medical Aid Scheme 1293 Wooltru Healthcare Fund 3517 Building Industry (North & West Boland) 3310 Electrical Industry (Natal) 3326 Laundry Natal * The following medical schemes names were changed during the year: ef no. New name Old name 1139 Omnihealth Meddent Medical Scheme 1249 Vulamed Southern Medical Scheme 1465 Alliance Midmed Medical Aid Society Alliance Medical Benefit Society 1039 DCMED CDA Medical Aid Fund 1115 JHB Metropolitan Chamber of Commerce & Industry Medical Society JCCI Medical Aid Scheme 1241 Naspers Sick fund Nasionale Pers Siekefonds 1516 Quantum Medical Aid Society ennies Group Medical Aid Society 1531 SEDMED Sewendedag Adventiste Mediese Hulpskema 1544 Tiger Brands Medical Scheme Tiger Oats Medical Scheme 1253 Xstrata Steeledale Group Medical Aid Scheme 1050 CGU Medical Aid Scheme Commercial Union Medical Aid Scheme 1065 CTP Medical Aid Society CT Medical Aid Society * The following medical schemes amalgamated with other schemes at beginning or during the financial year: ef no. Name 1001 Automobile Association Medical Aid Fund with Finmed 1420 Finmed with Omnihealth 1435 Murray & oberts Medical Aid with Caremed 1184 Phillips Medical Scheme with Omnihealth 1485 Premier Medical Plan with Omnihealth 1040 CNA Medical Aid Scheme with Massmart 1088 General Accident with CGU 1143 MSP with MSPSizwe 1171 Northern Medical Society with Fedsure Health Medical Scheme 1260 Tafelberg Medical Aid Society with Fedsure Health Medical Scheme 1330 PIMAS with Methealth Openplan 1213 SAKAV with Methealth Openplan 1564 egional Medical Scheme with Kwa-Zulu Natal * The following medical schemes were wound-up or dissolved (voluntary/automatic) during the financial year: ef no. Name 1444 Ninham Shand Medical Aid Society 1007 Perskor Mediese Fonds * The following medical schemes were registered during the financial year: ef no. Name 1580 South African Police Service Medical Scheme (Polmed) 1581 OPMED - omitted from this report due to an exemption 1582 Transmed 1583 Platmed Medical Scheme 48

51 egistrar s review 0