Some of SA’s best known medical schemes are losing money hand over fist in opaque “risk transfer” arrangements, in which they pay service providers millions of rand to manage claims that critics say they could easily handle in-house. The deals mean there is less money available for their own members and raises questions about the oversight role being played by the sector’s watchdog, the Council for Medical Schemes (CMS). Despite noting the phenomenon in every annual report it has published for the past five years, the regulator appears to have left schemes to continue with these arrangements unfettered. In all, R1.179bn flowed out of schemes in this manner between 2013 and 2017, according to Business Day’s analysis of data published by the CMS in its annual reports. Bonitas, SA’s second biggest medical open scheme, appears to have consistently lost money on these arrangements on a scale unparalleled in the industry. It lost a total of R692m on its risk transfer contracts between 201...

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