Individuals and organisations use a variety of financial products for minimizing financial risk. In some cases, proceeds from one financial product covers the cost of another financial product. A private hospital may take out general insurance contracts whose premiums could be funded by claim proceeds from medical schemes in the form of medical aid. This article (link: http://m.ewn.co.za/2015/02/18/Are-private-hospitals-pushing-pregnant-women-to-have-C-Sections) discusses the finding that 70% of females giving birth via C-section are covered by a medical aid. There is a campaign that attributes this high percentage to a drive for money. Private hospitals are accused of pushing their patients to having a C-section because performing at least two C-section births per month covers the private hospital’s general insurance premium.
The negative impact on health of this type of practice cannot be overstated. Multiple stakeholders, direct and indirect, pose a major challenge of accountability. The gynaecologists argue that they’re led to this practice by ever increasing insurance premiums. However, the medical aids are also enablers because they increase benefits in line with private hospitals subject to profitability constraints. The general insurers on the other hand are indirect, yet influential, stakeholders in this medical aid product. The burden of this practice is likely to fall on medical aid members through higher premiums since all the previously mentioned stakeholders can increase the cost of their financial products to avoid losses or a reduction in profits.