Kidney specialists to ask court to delay liquidation

• They say medical scheme has enough funds to cover patients while they get alternative cover

A group of kidney specialists is trying to delay the liquidation of Health Squared Medical Scheme by two months, arguing that the troubled scheme has enough funds to cover patients while they secure appropriate alternative cover.

Their intervention this week in Health Squared’s high court application for voluntary liquidation has not only highlighted the plight of severely ill patients, but also raised questions about how much longer it can cover claims.

Health Squared sent shock waves through the medical schemes industry and sowed panic among its more than 23,000 beneficiaries when it announced on August 18 that it had applied to the high court in Johannesburg to wind up its business on August 31. The scheme told its members it would not take contributions or pay claims after this date.

Complicating matters further, the Council for Medical Schemes announced that it was trying to broker a deal for members to be transferred to other schemes, but at the close of business on August 31 no such

agreement had been reached. Health Squared has about 50 beneficiaries who are kidney patients requiring regular dialysis or transplant treatment, without which they will die, according to SA Nephrology Society president Shoyab Wadee. Treatment is expensive, and they cannot risk even a short break in care, he said.

Kidney dialysis costs up to R30,000 a month in the private sector, and public sector facilities were not a viable alternative, he said. “The public sector is full, and they will be sent home to die,” said Wadee. “All our patients are scrambling. They are desperate.”

Health Squared gave members barely a week to identify schemes to join and obtain the necessary paperwork, he said.

In his application to intervene in Health Squared’s liquidation application, launched on August 30, Wadee said the scheme indicated in its founding affidavit that it had sufficient funds to cover claims until the end of the year.

Health Squared principal officer Elias Mabena responded in papers, saying the situation worsened since the scheme announced plans to close shop. Its latest financial assessment indicated it may be unable to pay claims after August 31, he said, citing a report by actuarial firm 3One. The scheme reported consistent month-on-month losses this year.

The situation was unlikely to change if the scheme traded into September, which would mean reserves deteriorating further, said 3One.

Continuing operations beyond August 31 introduced a host of new risks that could further destabilise the scheme, said 3One. These included a run on benefits, a deterioration of the scheme’s membership profile as young and healthy members left, and the possibility that members defaulted on contributions.

Wadee’s application to intervene is due to be heard on Thursday.