By Andrew Schwulst CEO of Medscheme
*Medscheme is a managed care company within the AfroCentric Group.
South Africa’s healthcare landscape has undergone significant transformation since the dawn of democracy, shaped by reforms designed to ensure equitable access and improve population health outcomes. Key among these reforms was the introduction of the Medical Schemes Act of 1998, which laid the foundation for a regulated, fairer private healthcare market. It introduced crucial protections—such as community rating, open enrolment, and prescribed minimum benefits (PMBs)—that have strengthened access and resilience within the system.
Yet, despite three decades of progress, many structural and legacy challenges persist. The public sector, burdened by historical underfunding and inequality, continues to serve the majority of the population—84% of South Africans—often with limited resources. However, government has achieved notable strides in building a more equitable system: expanding maternal and child health programmes, improving access to chronic medication, and rolling out successful vaccination and HIV/AIDS treatment campaigns.
Still, the gap between the public and private sectors remains stark, with only 16% of South Africans accessing private medical schemes. This discrepancy underscores the opportunity for the private sector to extend its role—particularly in the context of South Africa’s vision for Universal Health Coverage (UHC), which is not only a developmental imperative but also a constitutional right.
It is neither practical nor productive to frame healthcare reform as a binary choice between public and private systems. Rather, the future lies in a well-structured partnership model—one where medical schemes, administrators, and the state collaborate to create a high-performing, integrated national health system. The private sector brings decades of institutional knowledge in managing risk, financing care, and deploying clinical innovations that can meaningfully support government efforts.
One such example is the evolution of Low-Cost Benefit Options (LCBOs), which bridge the affordability gap for the working uninsured. These products cater to individuals who fall outside the income bracket of traditional medical aid but seek alternatives to strained public services. If enabled through supportive regulation, LCBOs could extend quality healthcare access to millions, advancing the national agenda of inclusion.
Moreover, public-private partnerships (PPPs) are already proving their value. Collaborations between medical schemes and public hospitals have resulted in centres of excellence, where expertise, infrastructure, and outcomes converge to deliver better care. These initiatives exemplify how private sector agility can complement public sector reach, improving overall system efficiency.
Throughout recent global disruptions—including the COVID-19 pandemic—medical schemes demonstrated operational resilience, maintaining benefit structures while limiting contribution increases. Importantly, several schemes passed cost savings back to members during low-claim periods, reinforcing their role as responsible corporate citizens. This level of stability and stewardship is critical in a volatile economic climate.
But even within the private system, there are pressing challenges. The traditional fee-for-service model continues to incentivise volume over value, driving up costs without commensurate improvements in patient outcomes. For patients with complex, chronic conditions, the system can be fragmented and impersonal.
The path forward lies in adopting a value-based care model. This global shift prioritises clinical outcomes and patient satisfaction over transactional billing. At Medscheme, our commitment to this model is reshaping everything from benefit design to provider contracting. Programmes like “Hospital at Home” have delivered up to 63% cost savings and 74% fewer readmissions, demonstrating that cost containment and quality improvement can go hand in hand.
Innovation will be pivotal. Technology is revolutionising healthcare—through AI-driven diagnostics, remote patient monitoring, and digital health platforms that enable better adherence and early intervention. Orthopaedic care programmes like OrthoCare further illustrate how targeted care pathways can reduce unnecessary procedures while enhancing recovery and long-term mobility.
To build a sustainable and inclusive healthcare system, the sector must also invest in data interoperability and integrated platforms that support coordinated care across providers, institutions, and geographies.
Looking ahead, medical schemes should not be viewed solely as vehicles for the privileged few. Their expertise, infrastructure, and innovation capacity make them essential building blocks in South Africa’s journey toward UHC. By fostering strategic alignment between the private and public sectors, we can accelerate access to quality care—without sacrificing financial sustainability.
The mandate is clear: it’s time to reimagine private healthcare’s role—not as a siloed service but as an enabler of national progress. Through collaboration, innovation, and shared purpose, we can create a healthcare system that truly delivers for all South Africans.
Andrew Schwulst is CEO of Medscheme, a leading health administration, health risk management and managed care company within the AfroCentric Group.