When I look at the manner the Medical Aid Society of Malawi (Masm), the country’s dominant provider of health insurance, runs its affairs I get the impression the Society feels it is doing its membership a favour.
In other words, Masm appears to have embraced a “take-it-or-leave-it” approach. It is detached from the membership and realities on the ground. The Society is simply arrogant for lack of a fitting word.
It is little wonder that the Competition and Fair Trading Commission (CFTC) has fined Masm K5 million for cheating its membership about its so-called ‘no-shortfall’ policy. In January this year, Masm announced a freeze on ‘shortfalls’ that never were.
In its investigations, the CFTC found that despite advertisements on the ‘no-shortfall’ policy in the media, some hospitals and other healthcare service providers were still demanding shortfalls from Masm members. This was misleading.
What I saw from the boomerang on the Masm ‘no-shortfall’ policy was poor communication, a syndrome common in many organisations in the country which believe they are sending across the message when they are talking to themselves through jargon-riddled statements and adverts. Masm failed to tell its membership how the scheme would work out, the limits and what have you.
In the end, to recover from the high costs incurred by a policy that failed to work, Masm resolved to use the template many in its position use: Push the cost of inefficiencies to poor and defenceless consumers through a premium or tariff upward adjustment.
Effective September 1, Masm members on Very Important Persons (VIP) scheme have seen their monthly premiums go up from K16 800 to K21 000, those on Executive scheme from K9 000 to K11 250 and Econo-plan scheme from K3 000 to K3 750. Members on Executive Old (EXO) are now paying K21 000 from K16 800 whereas those on VIP Old (VIO) from K22 200 to K27 750. This is the second time in six months that Masm has raised the premiums for its packages.
The Consumers Association of Malawi (Cama) and Institute of People Management Malawi (IPMM) have faulted Masm for the second adjustment, saying it affects budgeting by organisations that pay the bulk of the subscriptions.
In justifying the second premium review, Masm argued that the ‘no-shortfall’ offer to members introduced earlier this year has had an impact on its finances.
Masm claimed it implemented the ‘no-shortfall’ policy based on member suggestions through a survey, but I still feel, at the end of the day, the society should have balanced the findings and the reality on the ground. That is, if indeed, the so-called “survey” was undertaken.
When it was founded in 1984, Masm was set-up as a not-for-profit Society. It was established on the principles of a mutual society, meaning an organisation owned by members and managed for their benefit in pursuit of a common cause which, in the case of Masm, is provision of health insurance to members (the owners). Thus, mutual society shareholders are their members who are also the customers.
Mutual societies differ from insurance which is a cover for an eventuality. Health insurance operates more or less along the same lines, though, as it covers members’ medical bills, and until recently in the case of Masm, funeral expenses.
Masm’s mandate has remained a mutual society although, sadly, the Society seems hell bent to emphasise profit-making and not serving members. It has become traditional for Masm to raise premiums every New Year’s Day.
I feel Masm puts itself in an awkward position by diverting from its mandate.Instead of being a health insurance scheme, Masm decided to run hospitals, employing more staff and increasing its operating or overhead costs. Today, Masm members’ premiums go towards paying the huge staff complement than the service they deserve to get.
Masm has taken its customers for granted for a long time. President Peter Mutharika often says “this nonsense must stop”. I say the same to Masm.
Going forward, Masm should put its house in order, undertake authentic customer perception surveys and give the membership the service they deserve. The Society should avoid ‘one-size-fits-all’ policies.
It is high time Masm reviewed its business model or risk losing relevance and thrown out of business with new players joining the health insurance business and more companies maintaining or setting up in-house medical schemes. n