Ngcobo said: “They have substantial market share, over a consistently prolonged period. They have a high degree of market power and ability to control processes and maximise fees.”Trustees of medical aids are supposed to look after medical aid members' best interests, hold administrators to account and ensure they hire the most efficient administrators. But this was not what happened.
In fact, trustees and their bosses, who are known as principal officers, are paid for services every year regardless of performance, said Ngcobo. Because trustees are paid regardless of their performance, he said"there was little incentive for them to ensure the medical aid grows and that non-healthcare costs are appropriately maintained".
This means administrators can decide what to charge medical aids for services and are not held to account by the trustees, who can be paid millions annually. The inquiry recommended that medical aids all have one single base option and compete on providing better benefits to members, such as buying health care based on the quality of doctors and hospitals, rather than just based on cost.
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