Date: 24/08/2005
Source: Ministry for Public Service and Administration
Title:Fraser-Moleketi: Government Employees Medical Scheme briefing
Address by Minister Geraldine Fraser-Moleketi at the Government Employees Medical Scheme (GEMS) Industry and Media Briefing, Cape Town
Members of the medical profession and
insurance industry,
Members of the press,
Ladies and gentlemen.
Good day.
The Public Service, with its 1 079 348 million employees, is the largest employer in our country. Its role as an agent of change and transformation, as a force and leading player in the development of our nation, is enshrined in the Constitution, which states that public administration must be governed by the democratic values and principles.
Amongst other things, these principles guide us as government to uphold a public administration that is development-oriented and to also ensure efficient, economic and effective use of resources. GEMS is part of the employer’s endeavour to provide services impartially, fairly equitable and without bias. Through GEMS, Government as employer is responding to people’s needs in an effort to redress the imbalances of the past.
What these principles indicate, is that the Constitution is not only concerned with the service that our administration must endeavour to provide, but also how it manages its resources, both material and human.
The public service bears a weighty responsibility in consolidating the political advances that this country has seen into meaningful improvement of the lives of the people of this country. As the employer we seek to maximise the contribution of the employees in our organisation. To do this we must ensure that employees are provided with the support that will enable and empower those employees to deliver at their maximum potential.
Our transformation of the public service holds central the concept of the caring organisation, an organisation that is the employer of choice.
The 1999 Wage Policy and Review of Personnel Expenditure Framework identified medical assistance as one of the macro employee benefits in the Public Service for restructuring.
The review identified a number of shortcomings in the current system and as a result the Government Employees Medical Scheme (GEMS) was developed and registered with effect from 1 January 2005 to address these challenges. The review identified certain shortcomings, the first being that research over the past few years has consistently shown that income is the main barrier to medical scheme membership. Affordability, related to income levels, has resulted in the present situation where more than 40% of all public service employees do not enjoy the benefits of medical scheme membership. Since low-income employees cannot afford medical scheme membership, they forfeit the employer subsidy and do not enjoy the same levels of health care enjoyed by higher income employees.
Another finding is that government has experienced exceptionally high increases in expenditure related to the employer subsidy during recent times and research performed over the years demonstrates clearly that the current patterns of cost increases are unsustainable for both the State as employer and its employees.
The high increases in government’s expenditure on the medical subsidy are viewed in a particularly negative light because of the absence of value added. The increased government expenditure is not accompanied by the extension of the medical scheme benefits to low income employees and employees who do access cover continually report that their available scheme benefits are being reduced.
It is also apparent that Government has not been seen to be actively pursuing the rehabilitation of the public heath system because it has simply paid the employer subsidy and not participated in the governance of the relevant medical schemes.
A further finding is the lack of employer control. Government spent R5,1 billion providing medical assistance to approximately 60% (550 000) of its employees in 2004. Government is the single largest contributor to private healthcare in South Africa. Furthermore, this R5,1 billion was spent on monthly contributions to many different medical schemes of which the employer has no Board representation; no control over the governance and operations of the scheme; no control over the pricing of benefits; and no control over the quality of benefits offered to employees.
The Public Service Co-ordinating Bargaining Council’s (PSCBC) Resolution 7/2000, between government and the public sector trade unions, provided for an investigation into the use of the collective purchasing power of the employees and Resolution 2/2004 makes provision for the implementation of a revised medical assistance dispensation with effect from 1 January 2006.
In 2002, Cabinet approved a framework policy on a restricted medical scheme for further development by an interdepartmental working group (departments of Public Service and Administration, National Treasury, Health, Education, Correctional Services and South African Police Service). The approved framework policy centred on the principles of:
* Equity, where employees 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; and
* Differentiation, where employees opting for more extensive cover have equal access to such higher benefits subject to their needs.
On 3 November 2004 after careful consideration of the findings of a detailed feasibility study conducted in the same year, Cabinet approved that the Department of Public Service and Administration continues work on the:
* Registration of a restricted membership medical scheme for public service employees;
* The establishment of the scheme’s governance and management structure;
* The development of a member enrolment strategy in consultation with National Treasury;
and * Enhancing an understanding of the possible risks and costs involved.
In accordance with the approval given by Cabinet, the Government Employees Medical Scheme, or GEMS, was successfully registered on 1 January 2005 following the Council for Medical Schemes consideration of the scheme’s business plan and rules.
GEMS is a restricted membership medical scheme where membership is limited to current public service employees and those public service employees who have since retired. The business of GEMS is currently directed by the interim Board of Trustees, chaired by Prof Levin (the Director-General of the Department of Public Service and Administration) and the scheme’s Principal Officer, Dr Eugene Watson. Members of the scheme will be given an opportunity to elect further trustees at the scheme’s inaugural Annual General Meeting.
GEMS’ product offering consists of five dynamic benefit options that offer comprehensive healthcare benefits in a manner that is familiar to most employees. The five benefit options, named after precious gems, are Onyx, Ruby, Emerald, Topaz and Sapphire. The packages range from the very affordable Sapphire option that will provide essential cover, to the more expensive Onyx option where public service employees will enjoy more extensive cover. Even the lowest earner in the public service is hereby afforded the opportunity to access comprehensive medical scheme benefits by making a personal contribution of as little as R112 per month.
The monthly membership contribution payable by an employee who elects to enrol on GEMS will depend on their income and the benefit option they select. To further promote access and affordability, GEMS also employs income related contributions. A lower earning employee is therefore able to pay less than a higher earner for access to the same benefit option on GEMS.
On 25 May 2005, Cabinet approved an incremental member enrolment plan that will enable public service employees to enrol on GEMS over a particular period of time. Importantly, the intended enrolment of employees on GEMS is currently the subject of collective bargaining in the PSCBC.
Substantial progress has been made in respect of investigating and establishing GEMS. It is important not only to note the progress that has been made, but also to appreciate the range of synergistic benefits which are also realised through the implementation of GEMS. Whilst the implementation of GEMS is a unique process that has been undertaken by our democratically elected government, it should also be seen in the light of the President’s request for all of us, who are involved in the public service, to ‘think out the box’.
The implementation of GEMS sees the fulfilment of government’s stated policy objectives regarding the restructuring of the medical assistance dispensation. GEMS achieves the promotion of equitable access to comprehensive and affordable healthcare benefits by all public service employees and promotes greater access to this employee benefit by our lower income earners. The implementation of GEMS also sets an example to other employers by demonstrating that innovative medical benefits can be made available to all employees.
Implementing GEMS affords government the opportunity to exercise greater control over the large sums of money it currently contributes to the private healthcare sector and also over the selection and quality of healthcare benefits that its employees elect to contribute towards. Government will be able to directly influence the governance of the schemes it contributes toward because it will now be represented on the board of trustees of the scheme and it will be represented during the annual revision of benefits and contributions.
Government will be empowered through GEMS to provide more employees with an opportunity to improve their health and well being - in turn impacting positively on improved productivity levels in the public service.
The provision of a comprehensive HIV disease management programme, which includes anti-retroviral therapy, counselling and clinical care, also presents dynamic opportunities for the extension of the current HIV workplace programmes - programmes that have already received international recognition and accolades. GEMS also allows us to extend the scope of the HIV programme to employees and their family members.
Additionally, GEMS also achieves unique synergies with the work currently being performed by the Department of Health. GEMS may ultimately see the enrolment of an additional 1 million medical scheme beneficiaries, through the promotion of greater access to the employer subsidy by 380 000 of our employees and their families who are currently not enrolled on a medical scheme. The introduction of these additional beneficiaries into the medical scheme environment will result in a reduced public sector patient load and the reciprocal reduction in the demand on the public sector’s finite resources.
By enrolling members on GEMS’ Sapphire option, additional revenue streams for public healthcare facilities and the public private partnerships will be created.
Lastly, the implementation of GEMS supports the work performed by the Department of Health with regard to Social Health Insurance and the establishment of the Risk Equalisation Fund (REF). Both policy options, GEMS and Social Health Insurance, share the key policy principle of the promotion of equitable access to comprehensive benefits by more people. Synergies between the two policies are based on the fact that GEMS will:
* Increase the size of the medical scheme beneficiary population;
* Create large risk pools that will participate in the REF;
* Demonstrate that affordable healthcare funding can be made available to the large numbers of lower income earners; and
* Demonstrate that employers are able to extend medical cover to all their employees.
Eleven years into our new democracy, it is apparent that our society is still characterised by two poles - one pole requiring government interventions that support economic growth and another pole requiring government intervention to deliver basic services that so many of our citizens depend on.
Government believes that it is imperative that equitable access to comprehensive healthcare benefits by our employees is promoted, as this will result in:
* The expansion of medical scheme beneficiaries and the increased revenue generated in the private healthcare sector; and
* A reduction in the pressure on many of our public sector facilities that so many of our citizens are dependent on for the provision of essential healthcare services.
The development and implementation of GEMS has been informed by substantial bodies of research, sound data analyses and intense consideration by Cabinet. The progress that has been made during the implementation of GEMS is further evidence of government’s desire to apply unique and innovative measures to ensure that all our employees are awarded equitable access to their conditions of service in the public service.
The implementation of the GEMS is a positive development that clearly positions government as an employer of choice that truly cares for the health and wellbeing of its employees.
Issued by: Ministry for Public Service and Administration
24 August 2005
Source: Ministry for Public Service and Administration
Title:Fraser-Moleketi: Government Employees Medical Scheme briefing
Address by Minister Geraldine Fraser-Moleketi at the Government Employees Medical Scheme (GEMS) Industry and Media Briefing, Cape Town
Members of the medical profession and
insurance industry,
Members of the press,
Ladies and gentlemen.
Good day.
The Public Service, with its 1 079 348 million employees, is the largest employer in our country. Its role as an agent of change and transformation, as a force and leading player in the development of our nation, is enshrined in the Constitution, which states that public administration must be governed by the democratic values and principles.
Amongst other things, these principles guide us as government to uphold a public administration that is development-oriented and to also ensure efficient, economic and effective use of resources. GEMS is part of the employer’s endeavour to provide services impartially, fairly equitable and without bias. Through GEMS, Government as employer is responding to people’s needs in an effort to redress the imbalances of the past.
What these principles indicate, is that the Constitution is not only concerned with the service that our administration must endeavour to provide, but also how it manages its resources, both material and human.
The public service bears a weighty responsibility in consolidating the political advances that this country has seen into meaningful improvement of the lives of the people of this country. As the employer we seek to maximise the contribution of the employees in our organisation. To do this we must ensure that employees are provided with the support that will enable and empower those employees to deliver at their maximum potential.
Our transformation of the public service holds central the concept of the caring organisation, an organisation that is the employer of choice.
The 1999 Wage Policy and Review of Personnel Expenditure Framework identified medical assistance as one of the macro employee benefits in the Public Service for restructuring.
The review identified a number of shortcomings in the current system and as a result the Government Employees Medical Scheme (GEMS) was developed and registered with effect from 1 January 2005 to address these challenges. The review identified certain shortcomings, the first being that research over the past few years has consistently shown that income is the main barrier to medical scheme membership. Affordability, related to income levels, has resulted in the present situation where more than 40% of all public service employees do not enjoy the benefits of medical scheme membership. Since low-income employees cannot afford medical scheme membership, they forfeit the employer subsidy and do not enjoy the same levels of health care enjoyed by higher income employees.
Another finding is that government has experienced exceptionally high increases in expenditure related to the employer subsidy during recent times and research performed over the years demonstrates clearly that the current patterns of cost increases are unsustainable for both the State as employer and its employees.
The high increases in government’s expenditure on the medical subsidy are viewed in a particularly negative light because of the absence of value added. The increased government expenditure is not accompanied by the extension of the medical scheme benefits to low income employees and employees who do access cover continually report that their available scheme benefits are being reduced.
It is also apparent that Government has not been seen to be actively pursuing the rehabilitation of the public heath system because it has simply paid the employer subsidy and not participated in the governance of the relevant medical schemes.
A further finding is the lack of employer control. Government spent R5,1 billion providing medical assistance to approximately 60% (550 000) of its employees in 2004. Government is the single largest contributor to private healthcare in South Africa. Furthermore, this R5,1 billion was spent on monthly contributions to many different medical schemes of which the employer has no Board representation; no control over the governance and operations of the scheme; no control over the pricing of benefits; and no control over the quality of benefits offered to employees.
The Public Service Co-ordinating Bargaining Council’s (PSCBC) Resolution 7/2000, between government and the public sector trade unions, provided for an investigation into the use of the collective purchasing power of the employees and Resolution 2/2004 makes provision for the implementation of a revised medical assistance dispensation with effect from 1 January 2006.
In 2002, Cabinet approved a framework policy on a restricted medical scheme for further development by an interdepartmental working group (departments of Public Service and Administration, National Treasury, Health, Education, Correctional Services and South African Police Service). The approved framework policy centred on the principles of:
* Equity, where employees 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; and
* Differentiation, where employees opting for more extensive cover have equal access to such higher benefits subject to their needs.
On 3 November 2004 after careful consideration of the findings of a detailed feasibility study conducted in the same year, Cabinet approved that the Department of Public Service and Administration continues work on the:
* Registration of a restricted membership medical scheme for public service employees;
* The establishment of the scheme’s governance and management structure;
* The development of a member enrolment strategy in consultation with National Treasury;
and * Enhancing an understanding of the possible risks and costs involved.
In accordance with the approval given by Cabinet, the Government Employees Medical Scheme, or GEMS, was successfully registered on 1 January 2005 following the Council for Medical Schemes consideration of the scheme’s business plan and rules.
GEMS is a restricted membership medical scheme where membership is limited to current public service employees and those public service employees who have since retired. The business of GEMS is currently directed by the interim Board of Trustees, chaired by Prof Levin (the Director-General of the Department of Public Service and Administration) and the scheme’s Principal Officer, Dr Eugene Watson. Members of the scheme will be given an opportunity to elect further trustees at the scheme’s inaugural Annual General Meeting.
GEMS’ product offering consists of five dynamic benefit options that offer comprehensive healthcare benefits in a manner that is familiar to most employees. The five benefit options, named after precious gems, are Onyx, Ruby, Emerald, Topaz and Sapphire. The packages range from the very affordable Sapphire option that will provide essential cover, to the more expensive Onyx option where public service employees will enjoy more extensive cover. Even the lowest earner in the public service is hereby afforded the opportunity to access comprehensive medical scheme benefits by making a personal contribution of as little as R112 per month.
The monthly membership contribution payable by an employee who elects to enrol on GEMS will depend on their income and the benefit option they select. To further promote access and affordability, GEMS also employs income related contributions. A lower earning employee is therefore able to pay less than a higher earner for access to the same benefit option on GEMS.
On 25 May 2005, Cabinet approved an incremental member enrolment plan that will enable public service employees to enrol on GEMS over a particular period of time. Importantly, the intended enrolment of employees on GEMS is currently the subject of collective bargaining in the PSCBC.
Substantial progress has been made in respect of investigating and establishing GEMS. It is important not only to note the progress that has been made, but also to appreciate the range of synergistic benefits which are also realised through the implementation of GEMS. Whilst the implementation of GEMS is a unique process that has been undertaken by our democratically elected government, it should also be seen in the light of the President’s request for all of us, who are involved in the public service, to ‘think out the box’.
The implementation of GEMS sees the fulfilment of government’s stated policy objectives regarding the restructuring of the medical assistance dispensation. GEMS achieves the promotion of equitable access to comprehensive and affordable healthcare benefits by all public service employees and promotes greater access to this employee benefit by our lower income earners. The implementation of GEMS also sets an example to other employers by demonstrating that innovative medical benefits can be made available to all employees.
Implementing GEMS affords government the opportunity to exercise greater control over the large sums of money it currently contributes to the private healthcare sector and also over the selection and quality of healthcare benefits that its employees elect to contribute towards. Government will be able to directly influence the governance of the schemes it contributes toward because it will now be represented on the board of trustees of the scheme and it will be represented during the annual revision of benefits and contributions.
Government will be empowered through GEMS to provide more employees with an opportunity to improve their health and well being - in turn impacting positively on improved productivity levels in the public service.
The provision of a comprehensive HIV disease management programme, which includes anti-retroviral therapy, counselling and clinical care, also presents dynamic opportunities for the extension of the current HIV workplace programmes - programmes that have already received international recognition and accolades. GEMS also allows us to extend the scope of the HIV programme to employees and their family members.
Additionally, GEMS also achieves unique synergies with the work currently being performed by the Department of Health. GEMS may ultimately see the enrolment of an additional 1 million medical scheme beneficiaries, through the promotion of greater access to the employer subsidy by 380 000 of our employees and their families who are currently not enrolled on a medical scheme. The introduction of these additional beneficiaries into the medical scheme environment will result in a reduced public sector patient load and the reciprocal reduction in the demand on the public sector’s finite resources.
By enrolling members on GEMS’ Sapphire option, additional revenue streams for public healthcare facilities and the public private partnerships will be created.
Lastly, the implementation of GEMS supports the work performed by the Department of Health with regard to Social Health Insurance and the establishment of the Risk Equalisation Fund (REF). Both policy options, GEMS and Social Health Insurance, share the key policy principle of the promotion of equitable access to comprehensive benefits by more people. Synergies between the two policies are based on the fact that GEMS will:
* Increase the size of the medical scheme beneficiary population;
* Create large risk pools that will participate in the REF;
* Demonstrate that affordable healthcare funding can be made available to the large numbers of lower income earners; and
* Demonstrate that employers are able to extend medical cover to all their employees.
Eleven years into our new democracy, it is apparent that our society is still characterised by two poles - one pole requiring government interventions that support economic growth and another pole requiring government intervention to deliver basic services that so many of our citizens depend on.
Government believes that it is imperative that equitable access to comprehensive healthcare benefits by our employees is promoted, as this will result in:
* The expansion of medical scheme beneficiaries and the increased revenue generated in the private healthcare sector; and
* A reduction in the pressure on many of our public sector facilities that so many of our citizens are dependent on for the provision of essential healthcare services.
The development and implementation of GEMS has been informed by substantial bodies of research, sound data analyses and intense consideration by Cabinet. The progress that has been made during the implementation of GEMS is further evidence of government’s desire to apply unique and innovative measures to ensure that all our employees are awarded equitable access to their conditions of service in the public service.
The implementation of the GEMS is a positive development that clearly positions government as an employer of choice that truly cares for the health and wellbeing of its employees.
Issued by: Ministry for Public Service and Administration
24 August 2005
Advertisement
EMAIL THIS ARTICLE SAVE THIS ARTICLE FEEDBACK
To subscribe email subscriptions@creamermedia.co.za or click here
To advertise email advertising@creamermedia.co.za or click here
