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Discovery Limited: Solid performance from South Africa's benchmark open medical scheme

19 April 2013 Discovery Limited

The Discovery Health Medical Scheme today made public its financial results for the year ended 31 December 2012. The Scheme delivered a solid performance against key metrics, which is evidence of the Scheme’s ability to deliver financial stability, predic

  • The Scheme again experienced substantial membership growth, increasing principal membership by 6% off an already high base. The Scheme now covers 51% of the open medical scheme industry, enhancing its position as the benchmark open medical scheme in South Africa
  • Discovery Health Medical Scheme achieved a strong financial performance recording a net surplus (including investment income) of R789 million. Members’ funds in reserve increased by 11% to R8.2 billion.

    Milton Streak, Principal Officer of the Discovery Health Medical Scheme, said; “The medical schemes environment in South Africa faces significant challenges. Healthcare costs continue to rise above consumer price inflation; presenting a difficult balance for medical schemes to maintain between providing quality and access and on the other hand, containing costs.” Cost pressures in healthcare are a global phenomenon and not unique to South Africa. It arises from many factors, including an ageing population, the increasing burden of chronic disease and the cost impact from new medicines and technologies.

    Streak puts the Scheme’s performance in context; “When one looks at the complex healthcare environment, the Discovery Health Medical Scheme continued to deliver on its long-term core objectives. Our responsibility is to ensure all members of the Scheme have access to high-quality; cost-effective healthcare cover while also ensuring the Scheme remains sustainable and viable for its members. This, however, cannot happen in isolation. We also need to contribute to a better healthcare system for the Scheme’s members and all other stakeholders.”

    The Discovery Health Medical Scheme is the country’s largest open medical scheme, providing cover to more than 2.4 million South Africans. The Scheme is managed by Discovery Health (Pty) Ltd, who works with the Scheme to deliver quality and value on specific metrics that are key for any medical scheme’s performance. Dr Jonathan Broomberg, Chief Executive Officer of Discovery Health, said; “As the administrator of the Discovery Health Medical Scheme, we measure effective scheme performance and management according to a strict set of metrics. These include membership growth, financial strength, optimal benefit design, sound risk management, high levels of customer service, wellness and health interventions and adhering to the highest standards of governance. Working continuously with the Discovery Health Medical Scheme and its Board of Trustees around these critical issues, has resulted in a strong performance for the Scheme during the past year.”

    The Discovery Health Medical Scheme delivered strong performance across these metrics, with continued growth in membership, over R8.2 billion of members’ funds in reserve and low lapse rates. Global Credit Ratings have once again validated the Scheme’s position in terms of its claims paying ability with an AA+ credit rating – the highest rating a medical scheme can achieve. The Scheme has achieved this rating for the past 12 years and is the only open scheme that has achieved this rating.

    Streak concluded; “We will continue to focus on best practice governance, sound risk management and innovation in product design to maintain and enhance the Discovery Health Medical Scheme’s leadership position in South Africa. In this way, we aim to ensure excellent value for members.”

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