Legislative Amendments, Lack of Cadres, Rising Prices Are Challenges Facing Egypt’s Healthcare Companies
*Abo Al-Elaa: We Got EFSA’s Initial Ok To Submit Healthcare Bill To Shura Council In July
*Abo Al-Maged: Medical Insurance’s Growth Rates Climb 7%…New Law Supports It In Markets
*Maged: Lack of Medical Insurance’s Awareness, Clients’ default in Paying Premiums Are Current Obstacles
*Sherif: Healthcare, Insurance Companies Should Be One Entity To Increase Inside The Market
The healthcare companies are facing several challenges in the Egyptian market represented in the absence of a legislation that organizes the profession and separates between the powers of the insurance companies, medical care companies, and the service providers. Moreover, the lack of the trained and skilled cadres and the increase of the services’ prices, which led to devaluating the currency, are other major challenges.
“Amwal Al Ghad” has met with some leaders from the healthcare companies to recognize the challenges facing the sector and how to overcome those challenges as well as the companies’ role in increasing the clients’ insurance culture. The leaders have stressed the significance of ratifying the healthcare companies’ law so as to put the market in order and determine the relation between the insurance companies and the healthcare companies. They also made reference to the agreement with the Egyptian Financial Supervision Authority (EFSA) last month over getting an initial approval for submitting the bill to the Shura Council (Egypt’s Upper House) next July.
The companies’ leaders elucidated that the growth rates of the medical insurance mounted up 7% during the last fiscal year, while the growth rates of the entire insurance sector went up 11%. Although the growth rate of the medical insurance is low but it is suitable for the present circumstances, particularly in comparison with the other insurance branches, which lose a lot.
Dr Ehab Abo Al-Maged, Managing Director at GlobeMed Egypt, has clarified that the start of the healthcare activity was in the USA in 1951, so as to provide medical service for the law income particularly the workers in the factories. This activity evolved till it entered Egypt in 1989. The healthcare companies manage the medical insurance documents for the insurance companies or they handle directly the medical insurance programs for the authorities and the companies.
Technological Development
Hesham Maged, Managing Director at Care Plus Company, has continued the speech saying the medical management of projects as a factory or a company is a hard process as it pass through several processes starting with providing the emergency service to the clients at the appropriate time as well as making sure that the medical service provider is as efficient as the required level and the remittance system.
With the build-up of the businesses’ volume, the companies started to rely on the specialized software programs so that they can be capable of administrating the medical process for large numbers, said the MD; adding that the big healthcare companies invested large sums in order to get the specialized software programs, and each company now has its own version.
“TPA” & “HMO”
As for the inconsistency between the system of the companies that administrate the healthcare, “TPA” & “HMO”, Hesham Maged said the TBA’s role is confined to the process of managing the document that the insurance company issue by their experiences, cadres and affiliated communications centers all through the year for the interest of the insurance company without bearing any risks. Meanwhile, the HMO companies perform all those processes, in addition to managing the risks for the customers. In addition, there are companies that work by the two systems.
Mr. Ayman Abo Al-Elaa, MD at Care & Cure for Medical Services, stated that the role of the medical care companies also include handling the medical budget for the companies and institutions; speaking out that the volume of these processes is scanty, but they are represented in the private funds for many authorities.
Mr. Hesham Maged has pointed out to the increase of the individuals’ awareness about the medical insurance in the current period, since that the producers suffer a lot when they explain the concept of the healthcare the beneficiary from this kind of insurance for the clients. But now the clients deadly recognized the importance of this kind of insurance.
Starting Point
Ehab Abo Al-Magd said that the healthcare companies in 2006 had a dramatic change whereas the first gathering of the healthcare companies under the name “healthcare companies division”, included in the Federation of Egyptian Industries (FEI), was established. Thereafter, the EFSC’s point of view towards the healthcare companies changed and started their fruitful cooperation. In the wake of engaging Dr Adel Mounir as vice chairman of EFSA in 2006, he started to receive the representatives of association and to discuss the sector’s problems in order to reach solutions.
During the second half of 2006, a law for supervising the healthcare companies was prepared. Then, the media started to pay attention to the activity of the healthcare companies, as many conferences were organized to discuss the bill, besides getting the subsidy by the donor communities. This subsidy was used in training the workers and employers in the sector. In 2011, we cooperated with the Insurance Federation of Egypt via the joint committees. This refers that during the past five years, the medical insurance sector as well as the healthcare one in the Egyptian market were largely developed.
Exorbitant Losses
Mr. Ayman Abo Al-Elaa has emphasized the role of the healthcare companies in increasing the awareness of the medical insurance; clarifying that the medical insurance started with the insurance companies in the 1980s. The insurance companies suffered great losses in this kind of insurance because it depended on it as a method for attracting the properties documents, in addition to granting the medical insurance documents for free.
The life insurance companies did not help in promoting the medical insurance sector. Additionally, all the governmental and private institutions look for insurance away from the governmental health insurance because of the bad medical service is being provided by the governmental health insurance. Moreover, the healthcare companies are more distinguished in providing the medical service.
He also spoke out that the post-revolution categorical demands and protests by the workers in the institutions brought about increasing the turnout on the service although it had no clear positive impact.
Growth Rates
Abo Al-Maged said the growth rates of the medical insurance rose by 7% during the last fiscal year, while the growth rates of the whole insurance sector went up by 11%. Although the growth rate of the medical insurance is low, but it is suitable for the present circumstances if we compare with the other insurance branches, which lose largely.
Rising Prices
He referred for some problems that are facing the medical insurance companies exemplified in the high prices. This made the service providers put up the prices of the medical service, and the clients stumbled in paying the premiums; especially in the sectors of tourism, textile and the real estate investment.
Termination of Contract
Mr. Hesham Maged mentioned that the sector is facing pressure from the service provider about terminating the contracts in case of objecting to raising the prices of the provided services. He emphasized that throughout the last 30 years there wasn’t any new hospital, either private or governmental, constructed leading to a state of accumulation in the hospitals; mentioning that there is a real crisis in the number of beds of the intensive care rooms as well as the incubator rooms.
Maged has called on the Arab and foreign investors to invest in constructing hospitals in Egypt because it is the market’s prime need and aspires to provide medical services. This could help the investors and the Egyptian people either. Moreover, this may resolve the crisis, as the costs of constructing hospitals are high-priced that could reach billions of Egyptian pounds. Therefore, these hospitals need big institutions to construct them.
Human Cadres
Dr Sherif Fathy, Managing Director at Enaya Health Insurance Company, has clarified that the lack of the trained labor and human cadres is the most major challenge; confirming that the work needs such kind of cadre, whether workers or administrators or even doctors.
He added that having no legislation that completely organizes the profession and separate between the powers of the insurance companies, healthcare companies and the service providers, is another challenge that faces the sector. He called for an instant law that organizes the majors.
Legislative Amendment
Abo Al-Maged emphasized that in 2007 a bill that organizes the work of the healthcare companies for three years was drafted, and then we got the approval of the State Council as well as the prime minister. In 2010 it was submitted to the parliament. In addition, there was a bill organizes the work of the private funds of the ministry of investment, said Abo Al-Maged; adding that the Egyptian revolution prevented considering the two bills.
Abo Al-Elaa said that last month they agreed with the Egyptian Financial Supervisory Authority (EFSA) to get an initial approval to submit the healthcare companies’ bill to the Shura council next July; confirming that the bill is in accord with the complete health insurance.
Influential Articles
The law includes 30 articles divided into three parts. The first part organizes the work of the “HMO” companies, which provide the service and bear the risks. The second part organizes the work of the “TPA” companies (the healthcare companies) with the insurance companies. In both parts, there are conditions for the clearance as well as sanctions for non-compliance. It is the first time that the law separates between the work of the “HMO” companies and “TPA” companies, in addition to organizing and supervising their work and imposing sanctions in the state of violating the laws.
As to the third part, it relates to the companies that are willing to medical mediation. Abo Al-Elaa explained that the law is derived from the act no. 10/ 1981 and its amendment in 2008; emphasizing that the law is easy and accurate, as it organizes the work of the healthcare companies and the participant sectors like the insurance companies, ministry of health, the Egyptian Financial Supervisory Authority (EFSA) and the service provide. So we wish it could be supported.
On the other hand, Maged affirmed that the association has already started to discuss the criteria of the management companies, which their salient features are represented in determining that the board of directors and the volume of the companies’ capitals as well. So the companies that have those conditions and the administrative coordination as well could be registered in the authority. Consequently, the insurance companies become more confident to sign contracts with those companies.
Abo Al Maged said further that selecting the member companies in the association is according to strict conditions and a serious study for the companies and their activity in the market. The number of the member companies in the association is 23 ones, and during there are new five companies under study in order to join it.
