| 4. In which ways is the initiative creative and innovative?
The GEMS Business Plan, which consisted of five benefit options, was submitted to the Registrar of Medical Schemes in 2004. The overall objective was to develop and implement a restricted medical scheme for public service employees and meet the specific objectives of equity, efficiency, accessibility, affordability, quality and good governance.
The overall goals of the Scheme were:
• the extension of medical scheme coverage to public service employees currently without cover
• equitable access for all public service employees to a competitive benefits package
• member flexibility to purchase additional benefits to meet medical needs and affordability constraints
• sustainability of benefits across all options through benefit and contribution differentiation
• an innovative approach to provider contracting to maximise delivery savings and ensure quality outcomes through the leverage of economies of scale
• encouragement of the use of primary care services to control unnecessary utilisation of secondary and tertiary care
• facilitation of Broad-Based Black Economic Empowerment through procurement policy
• alignment with government’s Social Health Insurance Policy objectives.
After registration, a task team comprising representatives from National Treasury, the Department of Public Service and Administration and GEMS was established. This team was responsible for the development and finalisation of member enrolment strategies that balanced the need for equity and increased access against the cost implications to Government as an employer. This plan was presented to Cabinet for approval, followed by negotiations with labour in the Public Sector Co-ordinating Bargaining Council.
Marketing was staggered over a five-year period in an effort to cause the least amount of disruption in the industry. It also allowed the scheme the time to reach its full operational capacity and to be mindful of the financial implications for members who were currently without medical cover but would ultimately participate in the scheme.
The target market was divided into three broad categories: uncovered employees, new employees and covered employees.
One of the realities of a Government scheme was that various consultative processes needed to be followed before an enrolment strategy could be finalised. Moreover, the particular fashion in which the various groups was targeted during the enrolment strategy was directly dependent on the financial implications.
Offering a ‘best estimate’ of the member enrolment scenario, it was anticipated that the Scheme would sign on a compulsory group of approximately 70 000 members when operations commenced in 2006. Membership enrolment thereafter would be on a voluntary basis. It was furthermore anticipated that during the various consultative processes between the Department of Public Service and Administration and labour forums, the possibility of introducing a subsidy structure would be explored. This had been identified as an important risk mitigation factor.
Prior to official launch a comprehensive communication strategy included:
• a clear message of what needed to be understood by the membership
• an evaluation of the best methods and mediums to facilitate member understanding
• methods to facilitate member feedback and criteria to evaluate the efficacy of the campaign
• time frames for the respective deliverables of road shows, establishment of call centres, etc.
The aim of the campaign was to remove the 'public service' stigma that could be associated with the Scheme. It was also to inform members of benefits available and to emphasise the advantages of participating in GEMS. The plan acknowledged that a more forceful marketing strategy would be required during the phases where membership would be voluntary.
| 5. Who implemented the initiative and what is the size of the population affected by this initiative?
The necessity for GEMS stemmed from the imperative of Government as employer to protect, improve and support the health and wellbeing of its workforce in a manner, and at a cost, that is affordable.
In 2002 Cabinet approved a framework policy for a medical scheme restricted to civil servants. An interdepartmental working group was appointed to research and develop the concept further. It comprised representatives from the Department of Public Service and Administration, National Treasury, the Departments of Health and Education, as well as Correctional Services and the South African Police Service.
The policy developed by this interdepartmental working group centred on the principles of equity, efficiency and differentiation. Employees should have equal access to the most extensive set of equal basic benefits under equitable remuneration structures, subject to affordability. Efficiency in respect of costs and delivery of benefits was essential and employees who opted for more extensive cover should enjoy equal access to this.
The feasibility of creating a scheme, its operational design and its governance structure, was thoroughly tested by Government. This included public consultation and significant pieces of research.
GEMS’ role as an agent for change and transformation, as a force and leading player in the development of our nation, is enshrined in the Constitution. Central to our transformation of the public service is the concept of a caring organisation that is the employer of choice which our leading minds aspire to be a part of.
| 6. How was the strategy implemented and what resources were mobilized?
Prior to its implementation, the Scheme requested only R70 million in seed money from Government. GEMS is immensely proud of the fact that the Scheme did not have to ask for further cash injections from National Treasury.
When Cabinet approved the implementation of GEMS and its operational structure in November 2004, much work had been undertaken to arrive at an ideal structure by which to govern and manage GEMS.
GEMS’ operational structure consists of a Board of Trustees that directs the Scheme’s activities, a Principal Officer (CEO) who implements the directives of the Board and a Scheme executive which supports the Principal Officer in monitoring and managing the service levels and contractual obligations of outsourced services. The structure chosen lends strategic autonomy to the Scheme’s management so that it is not hindered by operational activities, while performance can be monitored constantly.
The Scheme’s first operational service providers were appointed in October 2005. The Scheme selected ‘best of breed’ healthcare partners, procured through a thoroughly transparent tender process, through whom the Scheme delivers professional healthcare-related services to its members. Together, these healthcare service providers provide a unique and powerful service offering to all GEMS members.
| 7. Who were the stakeholders involved in the design of the initiative and in its implementation?
GEMS has changed an entire industry and is an example from which all of us can draw inspiration. The Scheme proved that ideology can translate to reality through focused practice, passion, dedication and innovation. The Scheme’s non-negotiable commitment to the King III good governance principles has become a powerful brand characteristic.
GEMS has clearly demonstrated ongoing commitment to the mandate that had been set for the Scheme and shown a determination to strive to achieve greater heights. Notably, the Board and the executive of GEMS have always been responsive to change, with GEMS being the only scheme in the country to communicate with its membership base in all 11 languages.
From an operational perspective, GEMS emerged as the largest closed scheme in the country, and the second largest medical scheme in South Africa overall. It reported a R1.2 billion surplus for the 2013 financial year and its administrative costs were well below the industry norm. Moreover, it was rated the country’s best in its category by the prestigious Orange Index for two years.
By far the majority of the 1.85 million beneficiaries of GEMS have never before enjoyed medical scheme cover. More importantly, thanks to a 100% government subsidy, many employees, particularly those in need, are getting their medical cover for free. The socio-economic impact of GEMS is viewed as immeasurable by several industry commentators.
Women have responded well to the Maternity Programme, and it seems to be a standout service for women that consistently receives positive feedback. It is believed that this is a result of the clear insight into the healthcare needs of women because the female influence at the Scheme enables GEMS to put women first.
A healthier public service overall is a real result of GEMS. The continued support of healthcare screenings aimed at early detection for women of breast cancer, cervical cancer, cholesterol and diabetes has meant that what would otherwise go undetected and untreated because members could not otherwise afford medical aid, has been swiftly treated and managed, meaning that fewer days are missed and fewer days are spent in hospital. Healthcare issues are dealt with thoroughly and timeously.
GEMS is an excellent example of how Government delivers on its promises to its own employees, as well as to the citizens of SA.
| 8. What were the most successful outputs and why was the initiative effective?
GEMS’ operational structure consists of a Board of Trustees that directs the Scheme’s activities, a Principal Officer, who implements the directives of the Board, and a Scheme executive that supports the Principal Officer in monitoring and managing the service levels and contractual obligations of outsourced services.
This structure supports efficiency and effectiveness, so that appropriate resources can be dedicated to the sole purpose of providing state employees with affordable, quality healthcare. Key result areas contained in the Scheme’s strategic plan, namely the management of operations, the financial oversight and control, communication activities, governance and stakeholder relations are all directed by the office of the Principal Officer.
The success of GEMS is largely attributable to three primary focus areas, namely:
• operational and contractual efficiencies;
• good corporate governance;
• exemplary stakeholder relations.
The advantages of competitive GEMS-specific tariffs secured directly with healthcare providers, and our low non-healthcare expenditure, have kept our costs well below the industry range. Savings and cost containment benefits are always passed back to members and evidence of this is seen in the pricing structure of the Scheme. The benefit of our efficient contracting and the rigorous preferred provider arrangements are both of considerable importance in ensuring added value for our members and the long-term sustainability of the Scheme.
Customised reimbursement models are well used by GEMS with benefits being applied across the board to members and their families. These business strategies complement the firmly established operational infrastructure and culture of excellence that is positioning GEMS in a league of its own.
Corporate governance has been a hot button at GEMS since inception, but with an objective board-effectiveness assessment being performed by an independent facilitator, the Scheme took its corporate governance to new heights.
Key to membership growth and satisfaction is the final focus area that pertains to exemplary stakeholder relationships. With a stakeholder base in excess of 110 government departments and a total staff complement of over one million employees, transparency, active engagement and regular interaction cannot be over-emphasised by an organisation such as GEMS.
| 9. What were the main obstacles encountered and how were they overcome?
From the outset the fledgling Scheme faced strong criticism and resistance from the private healthcare industry, particularly from other medical schemes.
There was the risk of industry disruption, as well as a reputational and a credibility risk to Government. Among other threats, GEMS could also be faced by delays, uncompetitive product offerings and poor implementation processes. These could also lead to labour-relations issues.
The possibility existed that GEMS could also find its executive unable to manage a scheme of its magnitude. In addition, the structure of the Scheme’s operations demanded various linkages between organisations. While this unique structure provided optimal control of the Scheme, it was untried and untested in the market.
Administration risks lay largely with the size of the Scheme and the required administration capacity. There were also potential risks relating to the separation of membership management, call centre functions, claims processing, managed care services and electronic claims switching. New processes would be required for interfacing with PERSAL (the payroll system for employees in most national and provincial departments) for contribution and member management purposes.
Furthermore, there was potential for dominant parties, such as the employer or labour organisations, to attempt to exert undue and illegal pressure in terms of decision-making processes regarding the management of GEMS.
The Scheme overcame the challenges referred to through proactive and interactive stakeholder relations with groups representing Labour, the Regulator, Government as well as Industry Bodies. Contentious issues requiring consensus were addressed by the stringent recruitment of executives with the appropriate skills, motivation and a strong affinity for the mandate of the scheme.
The phased approach adopted with the enrolment of members allowed for the gradual build-up of capacity by service providers who were contracted to deliver services to scheme members. This was key in ensuring the successes enjoyed by the scheme.