2016 has been a difficult year for the South African economy.
The value of the Rand has been extremely volatile and the has drifted between anything from R18.90 per US Dollar to R13.20 per US Dollar. Those fluctuations have resulted in significant instability in the price of operational items such vehicles, fuel, and medical equipment. The fluctuations have also caused changes in the inflation rate, which often leads to labour unrest and increases in staff costs year on year, as EMS staff battle to make ends meet while the cost of living essentials such as food and transport climb at an uncertain rate.
Unemployment in South Africa remains a serious factor in the country’s economic instability. Statistics show an increase in the unemployment rate from 24.5% in 2013 to 26.6% in 2016.
Economic factors such as those above mean that medical aid schemes are also suffering and have seen significant stagnation in the growth of scheme membership numbers. Medical scheme membership statistics show that medical scheme membership has fluctuated between 16.5% and 18.4% of the population over the past 5 years. Only 17.4% of the South African population currently have medical aid scheme cover.
These extremely low medical aid scheme membership statistics mean that ambulance services are regularly treating patients without any form of medical scheme cover, resulting in poor cash flow, and rising levels of bad debt. This situation does not bode well for an industry that continues to see new private ambulance services entering the market under the false belief that it is profitable and sustainable.
In order to stay afloat, ambulance services will need to continue to do more with less, and will need to ensure that quality service provision as well as the best clinical treatment remain of the highest priority. If you are going to stay ahead of the increasing numbers of competing private ambulance services in South Africa, then you need to be the best. A second hand taxi, or an old provincial ambulance purchased on auction are not appropriate for use in the private ambulance industry. If you cannot offer guaranteed levels of treatment, safety, and service, then you as a business owner should seriously consider investing your money in another sector of the South African economy.
SAPAESA remains cautiously optimistic about the future of the industry for our members, and while the industry may not show substantial growth in the near foreseeable future, we are hopeful that the sector will at least remain sustainable for our current members. SAPAESA will continue to promote the use of our members as providers by medical aid schemes and other funding sources, and we trust that you will all persevere during these difficult economic times.