DPSA IN THE MEDIA: GEMS appoints 2013 Managed Care and Chronic Medicine Administration providers

Date: 3 Oct 2012

The Board of Trustees of the Government Employees Medical Scheme (GEMS) this week announced that six of the seven tenders issued on 27 May 2012 have now been awarded.

The successful bidders comprise a diverse group of organisations reflecting a fair representation of the greater South African healthcare funding industry.

The successful bidders are:

  • Medipost: Designated Service Provider - Chronic Medicine Courier?
  • Universal Healthcare: Chronic Medicine Management Provider?
  • Universal Healthcare: Strategic Managed Care Provider?
  • Prime Cure: Dental Managed Care Provider
  • Medscheme: Managed Care Services Provider
  • Prime Cure: HIV/AIDS Disease Management Provider

According to Ms Christa Brink, the Deputy Chairperson of GEMS, the tender for the rendering of Optometry Managed Care Services was re-issued, as most of the original bidders could not meet the stringent requirements of the Scheme. This resulted in the bid being non-responsive as per the requirements of the Scheme's Supply Chain Management (SCM) Policy. The preferred bidders for this service have now been identified and the Scheme is concluding the award process.

"During the negotiation process, issues such as cost-effective pricing, capacity and stringent service level agreements were taken into consideration. Within GEMS the tender process is considered to be of extreme importance, as the success of the Scheme is largely attributable to three focus areas, which include operational and contractual efficiencies, sound corporate governance and transparent stakeholder relations.

"Securing mutually beneficial agreements with appropriate service providers is therefore of key importance to the Scheme and its members," Ms Brink explains.

Through these regular, competitive and vigorous procurement processes, GEMS has been able to keep its non-healthcare expenditure well below the industry average whilst maintaining stringent service levels.

The Scheme's low non-healthcare expenditure, which at 6.1% by the end of 2011 is the lowest annual figure recorded since the inception of the Scheme and is half the industry average of around 12%, serves as an indication that costs are firmly in check despite the unprecedented growth of the Scheme.

The GEMS procurement process is implemented in full compliance with a Board approved Procurement Plan and the Scheme's Supply Chain Management Policy. The tender process was certified as fair by a team of oversight auditors. The independent auditing firms, Deloitte and PWC-Rakoma JV, were involved in the administration of the bids and oversight of the evaluation process respectively, ensuring that the process at all times remained both fair and transparent.

Deloitte was responsible for the entire administration of the bid process, the briefing session and the evaluation of the bids in line with the bid document and SCM policy. A GEMS bid evaluation committee was also responsible for a second evaluation of the tenders and their respective reports were subsequently tabled to the Board of Trustees, which was tasked with the final decision. This entire bid evaluation and adjudication process by Deloitte and the Scheme officers was monitored and overseen by PWC-Rakoma JV auditing firm.

Ms Brink added that the strict tender processes followed by GEMS complement the now firmly established operational infrastructure and culture of excellence that have positioned GEMS as a leader in healthcare funding and corporate governance.

"Corporate governance and ethics are cornerstones of the GEMS culture. Because of our stringent tender processes, such as declarations of interest, vetting for all those involved in the bid process as well as investigation of any allegation of impropriety by the Scheme's fraud unit, the Scheme has been able to keep its procurement processes above reproach."

The value of these contracts and the high profile of GEMS within the medical scheme environment clearly suggest that the procurement process will always be subjected to intense scrutiny. It is also these factors that lead to fierce competition in the market for Scheme contracts.

"GEMS' savings and cost containment benefits are always passed back to members and evidence of this is demonstrated in the pricing structure of the Scheme. The benefits of the Scheme's efficient procurement and contracting arrangements are of considerable importance in ensuring added value for GEMS members and the long term sustainability of the Scheme," concludes Ms Brink.

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