With days to go before one of the largest administrator transitions in South African medical scheme history, Bonitas Medical Fund has moved to reassure brokers, members, and healthcare providers that the shift from Medscheme to Momentum Health is not a leap into the unknown but a calculated repositioning that has been years in the making.
At a stakeholder update on 21 May, Bonitas’s principal officer, Lee Callakoppen (pictured), set out in detail why Bonitas decided to end its more than four-decade relationship with Medscheme and what the scheme believes will be required to make the transition work from 1 June.
After months of litigation, public allegations, and regulatory scrutiny surrounding Bonitas’s procurement processes, Callakoppen spent little time revisiting the dispute. Instead, he framed the move as part of a broader effort to reshape how the scheme responds to mounting pressure on affordability, healthcare demand, and member expectations.
Bonitas, South Africa’s second-largest open medical scheme, will move administration to Momentum Health from 1 June after 44 years with Medscheme, while managed-care services will shift to Private Health Administrators (PHA).
The transition comes as court proceedings between the parties continue, and the Council for Medical Schemes (CMS) pursues a section 44 investigation, although both Bonitas and the regulator have previously said the appointments of Momentum Health as administrator and PHA as managed-care provider do not form part of that process.
Read: Bonitas-Medscheme court battle stalls as application removed from urgent roll
‘Why this change?’
Callakoppen acknowledged that the decision would inevitably raise questions, particularly given the scale of the move.
But rather than presenting the change as dissatisfaction with a particular provider, he positioned it as a response to an industry under pressure.
He argued that healthcare funding had historically moved cautiously and incrementally, but said schemes no longer have that luxury.
According to Callakoppen, consumers are facing growing financial pressure while healthcare needs continue to intensify through rising disease burdens and broader social and economic challenges. At the same time, he said that regulation and the structure of the market have not evolved quickly enough to support the response that members now expect.
Bonitas, he said, reached a point where it had to decide how it would respond.
“The alternative is that we can endure it, we can face it, can face the inevitable,” he said.
“As a scheme, within our span of control, we can either cut benefits, we can increase contributions, we can horse trade during negotiations with service providers, but is that in the interest of the consumer and the South African healthcare ecosystem?”
Instead, he said Bonitas had chosen transformation.
Callakoppen said the scheme had deliberately sought stronger capability, greater capacity, improved innovation and leadership that could support long-term sustainability and growth while creating greater value for members.
He also referenced broader industry signals – including the Health Market Inquiry and calls for greater competition and new entrants – as part of the context informing the decision.
The Inquiry, initiated by the Competition Commission and concluded in 2019 after a multi-year review of the private healthcare sector, found that several features of the market were restricting competition and contributing to rising costs. Among its findings were concerns about concentration among major funders and facilities groups, barriers facing smaller entrants, weak consumer power, and insufficient emphasis on value creation. It recommended structural reforms aimed at increasing competition, improving transparency, and creating better outcomes for healthcare consumers.
Yet perhaps the most revealing part of Callakoppen’s explanation was not about technology, pricing, or capability.
Callakoppen said Bonitas has increasingly focused on what he described as “motivational fit”.
Drawing on his background in human capital, he said he had initially thought of the issue as culture fit before reconsidering the concept.
“What motivates you to wake up every single day and go again,” he said.
According to Callakoppen, alignment in how service providers approach problems, collaborate, and pursue outcomes has become a prerequisite for success.
He said one of his first conversations after the governance decision was made was not about price or service levels but whether the incoming providers could commit to working together and creating synergy “for a greater good”.
A transition built with old and new providers
Although Bonitas has publicly defended the decision to appoint new service providers, Callakoppen struck a notably conciliatory tone when discussing implementation.
He acknowledged that changing providers at this scale creates uncertainty.
“I’ve had calls, I’ve had WhatsApps, it creates uncertainty for people who know me long,” he said.
“I’m an authentic person, and I can tell you it scared me.”
Callakoppen said the scheme’s response had been to build governance and oversight into every stage of the transition.
Bonitas established dedicated sub-committees, steering committees, structured workstreams, and independent assurance processes spanning people, systems, and controls. He said the project involved daily engagement and weekly workstreams under tight timelines.
But he also made a point of emphasising that continuity depended on more than the incoming providers.
“To allow a successful transition, it was key to equally consider our existing service provider, Medscheme,” he said.
He described an integrated approach between Medscheme, Momentum Health, and PHA as essential to delivering a successful go-live.
Callakoppen thanked Medscheme for its role over the years and for its co-operation during the transition.
“Yes, like everything in life, it is time to pivot to the next level, but that would not have taken place without co-operation and agreement between parties, and it has gone exceptionally well.”
He acknowledged there have been “sticky points” but said the emphasis remained on resolving issues and keeping the purpose of the transition front of mind – ensuring continuity of experience and care, and above all that no stakeholder is placed in an adverse position by the change.
He also emphasised that the objective was not simply to replicate existing systems.
“We are not looking for copy and paste or cut and paste,” he said.
According to Callakoppen, Bonitas used years of stakeholder feedback and broker input to redesign processes and improve ease of doing business rather than recreate existing structures.
‘Our race is merely starting’
For members and intermediaries, Callakoppen’s strongest assurances came when discussing what happens if the transition does not go exactly to plan.
He said Bonitas is not assuming a flawless implementation.
The scheme expects challenges and has built contingency mechanisms around the launch, including real-time monitoring of service levels, escalation structures, high-frequency reporting, analytics and a “hypercare” model designed to stabilise operations in the early stages after go-live.
Callakoppen said Bonitas would provide regular communication if problems affected stakeholders and committed the scheme to three principles if issues emerge.
First, it will explain the issue and provide context.
Second, it will ensure action is taken to resolve it.
Third, any resolution will be accompanied by timelines.
For now, however, he said the commitment remains unchanged.
“The undertaking and the promise that we make is that the care remains the same, the system behind it is being strengthened. Our race is merely starting on the first of June.”
At the time of publication, the parties had provisionally secured 9 and 10 June as potential court dates for the matter, although these remain subject to confirmation and may change depending on procedural developments.
