THE measure of a medical scheme’s liquidity depends on a constellation of factors, the combination of which is unique to each scheme. How often does the industry remember this, and has the time come to review the status quo?As time passes, the ground tends to shift beneath the industry’s feet, with implications for the measures that truly constitute financial solvency. When the Medical Schemes Act (131 of 1998) was being drafted, the Department of Health had the delicate task of establishing the guidelines that would underpin the health-care funding industry in a young constitutional democracy. At this time, the financial soundness of the medical schemes industry was in a perilous state.Now, almost 20 years later, the country and the health-care environment have altered significantly, yet medical schemes are still labouring under the weight of the 25% solvency requirement, which I consider to be a relic reflecting the uncertainty of those early days. Observers trying to make sense o...
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