Address by Minister of Public Service and Administration Geraldine Fraser-Moleketi at the Inaugural Annual GEMS Symposium, Cape Town

Ladies and Gentlemen

We are here today to talk about Government Employees Medical Scheme (GEMS) and the benefits derived from the realisation of equitable access to affordable benefits by public service employees - about how we continue working together to ensure its ongoing success and growth, to remember the path we took to get here, to learn from each other and, very importantly, to discuss its possibilities and future.

Introduction

It is easy to lose ourselves in 'policy speak' and to forget the employees, individuals, who have entrusted GEMS to provide for their healthcare.

Let me share with you my experience when I met Rezah Isaacs, a GEMS beneficiary, at a function in November 2006 where we launched the GEMS benefits for 2007.

Rezah Isaacs was 15 years old then. He had bone cancer and his family's medical scheme did not want to pay for the operation or the chemotherapy that he needed. His father worked for the Department of Education (DoE) here in the Western Cape and he immediately applied for GEMS membership. On the day that I met Rezah and his family, his father told me that he couldn't believe GEMS would take him and Rezah on as members, especially not since GEMS knew of Rezah's condition and the vast amounts of money his recovery would cost. He also told me that because of GEMS, his son now has a future. GEMS recently reported to me that Rezah does not have to go for chemotherapy any longer and that he attends school on a daily basis.

People are central to the existence of GEMS. "GEMS was created because the state as an employer seeks to ensure the adequate provisioning of healthcare coverage to public service employees that is efficient, cost-effective and equitable; and to provide further options for those who wish to purchase more extensive cover".

From this mandate you can already discern more than one reason why GEMS had been brought into existence: firstly, because the provision of medical assistance is an important condition of employment that improves the health and productivity levels of public service employees; secondly, government wants to ensure that the medical assistance its employees have access to is adequate and cost-effective; and thirdly because the provided medical assistance needs to be available to all employees in an equal and equitable manner.

Government's vision is that all employees, Directors-General (DGs) and cleaners alike, need to enjoy the benefits that Rezah and his family have.

Background to GEMS

Jason Kaufmann, an American politician, once said that the best way to predict the future is to create it. And to explain why we needed to have a predictable future in line with the policy vision I just described, we have to take a step back into the past and provide you with the GEMS background.

The 1999 Wage Policy and Review of Personnel Expenditure Framework identified medical assistance as one of the macro employee benefits in the public service in need of restructuring. It also identified certain shortcomings in the system that existed at the time, which included inequity in access to medical cover based on the income levels of employees, unchecked increases in employer expenditure on medical assistance, a lack of value for money and lack of integration with the public health system.

This review, performed at the beginning of my term as Minister for the Public Service and Administration, formed the basis on which we could start researching solutions and their effect on the state as an employer, the healthcare market and, of course, the employees - the people who will benefit most from solutions to these shortcomings in the system.

A policy framework on a restricted scheme for public service employees was developed and centred on the principles of equity (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 (employees opting for more extensive cover have equal access to such higher benefits subject to their needs).

This framework was approved by Cabinet in 2002, with a research report following in 2003 and the final feasibility study in 2004.

On 20 October 2004 Cabinet approved that the Department of Public Service and Administration (DPSA) commences on the work required for the establishment of the interim Steering Committee and the registration of a restricted membership medical scheme for public service employees. The final approval from Cabinet to continue with the work came on 3 November 2004 and GEMS was successfully registered as a medical scheme with the Council for Medical Schemes on 1 January 2005. Exactly one year later GEMS enrolled its first member.

GEMS symbolic of my period in office

In many ways I identify closely with GEMS as my term of office commenced at the time that the remuneration review was performed. I remember quite well when the research and feasibility studies on GEMS first became available.

It was projected then that, amongst other positive contributions, GEMS would increase the total number of medical scheme beneficiaries by 14 percent. Just the thought that we could provide over 300 000 employees with the opportunity to access medical scheme cover was in itself something significant, because for these employees and their families it would make a world of difference.

Since the scheme became operational in January 2006 it has gone from strength to strength. Today, it is improving the lives - the well-being - of more than 680 000 people, whilst it is showing every sign of continued growth. And with this growth comes a wealth of information on the health status of our public service employees, men and women who commit to supporting the work required to improve the overall delivery of government.

Equitable access to affordable benefits in the context of the developmental state

By the end of 2007 GEMS was the largest restricted or employer based medical scheme in the country and also the fastest growing in the history of the industry. The scheme handles an annual contribution income equivalent to 0,25 percent of gross domestic product (GDP). GEMS and the new medical assistance policy for public servants now provides equitable access to medical scheme benefits to every public servant, including the lower earning public service employees - the majority of whom are black and female, who have largely never enjoyed access to this vital employee benefit.

At face value it would appear that GEMS is merely a new employee benefit for public servants, but on closer inspection the implementation of GEMS lends significant support to broader social imperatives and contributes to numerous developmental initiatives of government.

Inequality in our country is epitomised by the phenomenon of two economies: a first economy that is modern and produces wealth, and a second economy that is characterised by underdevelopment and significant poverty. Government has undertaken to normalise this imbalance - intervening in society to achieve economic growth and social development to secure an improvement in the quality of life of all our citizens, the developmental state

To understand how GEMS impacts on and contributes to the provision of equitable access to affordable benefits in the context of the developmental state, one needs to recall how medical assistance was provided to government employees prior to GEMS and the employer's role in providing this assistance.

Before the creation of GEMS, employees in the public service were entitled to access medical assistance in the form of a two-thirds limited subsidy when they enrolled on a medical scheme. Those employees that did utilise the subsidy were enrolled on 68 different medical schemes in varying degrees of concentration, and in 2004, 44 percent of them had reached the maximum employer subsidy.

As the employer government had no control over the governance, operations, pricing or quality of medical scheme benefits that were provided to its employees by the many medical schemes involved.

Despite the available subsidy, large numbers of employees did not access the medical assistance provided as they were unable to afford even one third of the medical scheme contributions. As formally employed persons, technically members of the first economy, these employees mostly utilised the public sector hospitals and general practitioners (GP's), for which they paid out of their own pocket - utilising limited public sector healthcare resources which so many of our citizens depend on fully.

As GEMS was projected to increase the total number of medical scheme beneficiaries in South Africa by 14 percent it was foreseen that, as it grows, there would be a reduction in the public sector patient load as employees utilised private facilities. A further related benefit is the generation of revenue streams for select public service facilities when members, like those on the Sapphire option, used these. In so doing more resources would be available and additional revenue would be created to deliver services to those members of the second economy that are dependant on this vital state intervention. Early evidence of this is apparent in the nine million rand the scheme has paid to the public sector in 2007.

The developmental state is not only focused on delivering service to improve the quality of life of citizens but also focuses on those interventions that support economic growth and participation. The growth in medical scheme beneficiaries, as a consequence of implementing GEMS, results in additional revenue being generated towards both healthcare and non-healthcare providers in the first economy's private health sector. This revenue growth in turn creates additional employment opportunities and greater participation in the first economy for more people.

So what has changed since GEMS?

All public servants now have access to a progressive subsidy which accommodates employees and their families and is available to all, irrespective of income levels and the price of the benefit they purchase. And for the lowest income levels, the subsidy covers 100 percent of the medical scheme contribution when these employees enrol on GEMS Sapphire option! Additionally, employees enrolled on GEMS enjoy the equitable pricing structure which sees employees paying for benefits based on their income levels - a lower earner is not penalised when selecting the benefit option of their choice on GEMS.

As the Minister for the Public Service and Administration I have the responsibility to determine the medical subsidy policy and also to appoint 50 percent of the members of the Scheme's Board of Trustees. Through GEMS government is furthermore assured of the level of governance and operational efficiency employed by the medical scheme when providing public servants with medical benefits. We are also able to keep an eye on the cost of those benefits, and the quality thereof.

In terms of facts and figures, GEMS covers over 250 000 public service employees and 680 000 beneficiaries when you include family members. More than 53 percent of these employees did not access the medical subsidy beforehand and, significantly, over 20 percent of those employees who were uncovered in 2006 when the scheme started enrolling members are now covered on GEMS. By the end of April 2008, more than 96 000 employees on levels one to five, the lowest income bands, were members of GEMS. This figure represents 27 percent of all employees on salary levels one to five.

And then, of course, follows the more indirect effect GEMS is having on the greater economy and healthcare sectors of the country, as it had been predicted. Schemes are competing actively, the sector is reviewing their costs, participants are looking for innovative solutions and industry figures already show an increase in the number of restricted scheme beneficiaries in particular, and an overall increase in membership of medical schemes too.

Public service health statistics

Government, through GEMS, provides its employees with integrated, effective health and wellness programmes and initiatives. GEMS provides healthcare benefits and disease management programmes to registered employees, including HIV care, Oncology care and Mental Health care, which in turn result in the improved health and well-being of employees. The promotion of health and well-being amongst employees positively impacts on absenteeism and improved productivity, which in turn results in improved service delivery by the public service.

As a result of the significant growth in GEMS membership during 2007 the intrinsic value of GEMS healthcare data and management is now being realised, especially as GEMS provides government with the single largest representative sample of public service health information. Significant data analyses have been performed and noteworthy healthcare trends are being identified.

A review of key trends in GEMS in 2007 revealed which illness conditions affected our employees materially and, as a consequence of the prevalence and morbidity, have an impact on absenteeism and productivity. For instance, at least seven comma two percent of GEMS beneficiaries suffer from lifestyle related diseases such as hypertension and diabetes. In fact, five comma two percent of the GEMS beneficiaries are registered hypertensive patients whilst two percent of them are diabetic.

Other health-related conditions that emerged as prominent trends amongst GEMS beneficiaries include community acquired infections; mental health related conditions; pregnancy related conditions - more than 7 000 babies were born on GEMS during 2007; and bone and joint conditions such as arthritis.

This information is invaluable to help fine-tune the DPSA's workplace wellness policies and strategies for the public service. It also assists in ensuring that the synergies between the DPSA's Health and Wellness Policy Unit and GEMS are successfully implemented. More healthcare information can be found in GEMS 2007 Annual Report which is available at http://www.gems.gov.za

The way forward

The wonderful success GEMS has experienced so far has proven to us that it has the capacity and means to continue being successful. Our biggest goal for GEMS is that it now should extend the cover it currently provides to even more public service employees and their families, especially those on salary levels one to five who do not enjoy cover.

The need for GEMS to exist, for it to extend its cover to provide medical assistance to even more people, is not just because government has committed itself to address the past imbalances, inclusive of the racial categorisation of employees between medical schemes. Neither is it only because government has committed to providing its employees with conditions of service that includes equitable access to adequate healthcare cover.

The need for GEMS to exist and excel can be related to the United Nation's Declaration of Human Rights, which states in Article one that all human beings are born free and equal in dignity and rights, in Article 23 that everyone has the right to ... just and favourable conditions of work, and in Article 25 that everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including medical care and the right to security in the event of sickness or disability.

Government requires GEMS to continue succeeding in implementing policy decisions. Because a successful GEMS means a much greater chance for government to have healthy, happy, productive employees who can do what is required in a "Business Unusual" public service - do things they have never done before so as to achieve things they have never achieved before.

Thank you

Issued by: Department of Public Service and Administration
4 June 2008