Most South Africans don't think about their medical scheme every day. They think about it when the monthly contribution comes off their bank account, when increases are announced, or when they need to submit a claim. Yet the true value of healthcare funding is most often realised when life changes unexpectedly through a serious accident, a cancer diagnosis, an emergency operation or the birth of a premature baby. In those moments, the question is no longer simply what healthcare costs, but whether you can access the care you need so badly.
I often say that people fully appreciate the value of a medical scheme when they are at their most vulnerable. A patient admitted to intensive care after a serious motor vehicle accident can generate hospital costs running into millions of rand. At that point, what matters is having confidence that the treatment you need will be funded and you will not be left with massive financial difficulty. This is why I believe the biggest challenge facing healthcare today is not artificial intelligence, digital transformation or even National Health Insurance. It is affordability to be able to remain on a medical scheme. Unless quality healthcare remains within reach of ordinary South Africans, even the most impressive advances in healthcare will have limited impact.
Affordability is reshaping healthcare
South Africa's healthcare environment is becoming more complex and challenging every year. Households continue to absorb higher costs for food, electricity, transport and other essentials, while healthcare inflation continues to outpace consumer inflation. Hospital tariffs and medicine prices continue to rise at very high levels, and at the same time utilisation of healthcare is rapidly increasing due to a number of factors such as increased prevalence of lifestyle diseases, an increase in the prevalence of many cancers and also people living longer due to advances in healthcare treatments and technology.
The challenge for medical schemes is to maintain sufficient financial reserves to meet members' healthcare needs, ensure that medical scheme contributions remain affordable, but also, at the same time, deal with increasing healthcare costs driven by utilisation, tariffs and other factors. These competing pressures are widening the gap between what healthcare costs to provide and what households can afford.
Affordability has therefore become much more than a pricing discussion. It influences benefit design, provider partnerships, preventative healthcare and the way technology is deployed. The sector cannot rely indefinitely on increasing contributions to absorb rising costs. Instead, we need to ask how we can deliver better healthcare while making every rand work harder for members.
Increasingly, there is a need for funders and healthcare providers to contract on a value-based reimbursement model. Rather than paying healthcare providers on the basis of an activity (a consultation, a procedure or a hospital admission), payment should be made based on healthcare outcomes. Better healthcare is not necessarily about delivering more treatment; it is about helping people remain healthier through prevention, earlier diagnosis, coordinated care and interventions that reduce the risk of complications before they require expensive treatment. This model will improve outcomes for members while at the same time enabling medical schemes to manage long-term healthcare costs more effectively.
The industry's growth patterns underline the urgency. Medical scheme membership has remained largely flat, with membership growth best described as sluggish. Affordability continues to be the greatest impediment to membership growth in the industry. Consumers are carefully weighing the value they receive against what they contribute every month, and more affordable benefit options are increasingly important. This reflects the financial reality facing South African households and reinforces why medical schemes need to design products around what members genuinely need and can sustain. The Council for Medical Schemes need to finalise and approve a model for a low-cost benefit option that would allow currently uncovered lives to enter the formal medical scheme industry.
Creating value through partnership and innovation
Healthcare has also become too complex for any organisation to solve independently. One of the principles that has consistently shaped our thinking at Medshield is the concept of mutually beneficial partnerships. Medical schemes need to work with healthcare providers, managed care organisations, the Regulator, healthcare administrators and, importantly, members themselves. Members who engage in preventative care, attend routine screenings and manage chronic conditions effectively can improve their own health outcomes while contributing to a more sustainable healthcare system.
Technology can strengthen these efforts, but it should never become an objective in itself. Artificial intelligence, predictive analytics and digital health platforms have enormous potential to identify members at risk earlier, support preventative interventions, expand access through virtual care and streamline administrative processes. Used responsibly, these tools can improve clinical outcomes and efficiency. Their real value, however, lies in whether they make healthcare easier to access, more personalised and ultimately more affordable.
This requires strong governance and trust. Members already have to navigate benefit structures, tariffs, provider networks and funding rules that can be difficult to understand. Technology should simplify that experience rather than add another layer of complexity. Equally, people deserve to understand what they are paying for and what benefits they can expect. Transparency gives members greater confidence and enables them to make more informed healthcare decisions.
The future must be measured by value
Affordability, partnership, innovation and transparency ultimately come back to long-term sustainability. Sustainable healthcare is not created through a single innovation or one year's financial performance. It is built through disciplined governance, responsible financial management and consistent focus on delivering value to members.
At Medshield, we were encouraged to achieve eleven consecutive months of net membership growth during 2025, increasing principal membership by 4.5% while maintaining a solvency ratio of 53%, more than double the statutory minimum. Membership growth in 2026 has continued, with the Scheme reporting net membership growth every month to-date, translating into a 10% growth level. These results are significant in an industry where growth is difficult to achieve. Still, they also demonstrate something broader: sustainable growth remains possible when affordability, financial discipline and member value are treated as interconnected priorities.
Healthcare will continue to evolve. Artificial intelligence will become more sophisticated, digital health services will expand and the policy landscape, including National Health Insurance, will continue to develop. But South Africa's most important healthcare question is not how technologically advanced the system can become. It is whether people will continue to be able to access quality healthcare when they need it.
Innovation only has value if it helps us answer that question. We cannot build a healthcare system that is technologically impressive but financially out of reach for the people it exists to serve. The future will be defined by our ability to deliver quality care more efficiently, protect members when they are most vulnerable and ensure that healthcare remains sustainable and affordable for generations to come.
FIN (Word count 1126)
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