Rob Rose Editor: Financial Mail

Like most of the 8.9-million South Africans lucky enough to have a medical aid, you’re probably wondering why this luxury is sapping increasing amounts of your salary every month. After all, medical aids are meant to be not-for-profit entities, putting their members’ interests first. Take the Discovery Health Medical Scheme: it is a not-for-profit entity presided over by a board of trustees, meant to look after the interests of the medical aid’s 2.8-million beneficiaries. The medical aid then hires a separate administrator, which does want to make a profit and charges a fee for things like collecting contributions, paying claims, marketing and running a call centre. In this case, the administrator is Adrian Gore’s Discovery Health Ltd, which collected R5.49bn from the Discovery medical scheme last year in "administration" and "managed care" fees. (Last week, Discovery Health Ltd reported a 10% increase in operating profit, to R1.46bn.) So who ensures medical aid members aren’t being...

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