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Managing the healthcare trilemma: broadening access to world-class care, maintaining affordability and enhancing benefits and services

16 September 2019 Discovery

• Discovery Health Medical Scheme contribution increases for 2020 ensure ongoing sustainability of quality healthcare benefits for members

• Discovery Health Medical Scheme contribution increases for 2020 ensure ongoing sustainability of quality healthcare benefits for members
• Discovery Primary Care expands access to private healthcare by introducing affordable primary healthcare insurance for household employees.

Discovery Health Medical Scheme today announced the 2020 annual contribution increase and benefit changes. DHMS will be implementing a weighted average contribution increase of 9.5%. Based on a market survey of financial advisers representing over 250,000 lives, market expectations are for increases between 10% and 12% across the industry.

Dr Nozipho Sangweni, Principal Officer of DHMS explains, “The average increase for 2020 enables the Scheme to maintain and enhance benefits, while allowing for the increases in the demand for existing benefits, and the increases in the cost of those benefits. As a medical scheme, we remain focused on ensuring that all our members have access to the best quality care, while ensuring that contributions remain affordable for the long term.”

Discovery Health Medical Scheme also announced further enhancement of benefits, including a redesigned Comprehensive Series plan – Classic Smart Comprehensive. Following the success of its digitally enabled, network-based Smart Series, the Scheme has extended the design to its Comprehensive Series, to offer families attractive options for efficient, affordable comprehensive cover in 2020.

For DHMS, increases in the cost of healthcare claims can be attributed mainly to more members needing to use healthcare services, and members making use of these services more frequently. Dr Jonathan Broomberg, CEO of Discovery Health, provided examples of these increases, citing higher chronic-related claims as a significant contributor in the demand for healthcare and demand-side inflation. “Claims data for DHMS indicate that the incidence of chronic conditions has increased by 48% over the past 10 years due to the impact of lifestyle diseases on the medical scheme population in general. Members with chronic conditions claim 4 times more than healthy members, and are more likely to require hospital admissions related to their condition, which adds to the cost of medical scheme claims,” said Broomberg.

In his presentation to financial advisers, Dr Broomberg, provided an analysis of the cost drivers behind medical inflation and medical scheme contributions. “Medical inflation is the year-on-year increase in the cost of healthcare claims and is a critical consideration for medical schemes. Increases in the annual cost and number of claims have a significant impact on a medical scheme’s ability to provide affordable cover for healthcare services on an ongoing and sustainable basis.”

Discovery Health estimates total medical inflation for 2019 at between 10.5% and 12.5%, with the variance due to utilisation trends on the different health plan options. However, risk management by Discovery Health and the ongoing positive impact of Vitality on engaged members’ health, reduce medical inflation by 1.6%, resulting in plan specific contribution increases between 8.9% and 10.9%.

Broomberg said, “Contribution increases should be seen in light of the historic performance of the Medical Scheme and the ability to keep contributions and plan benefits stable and at a high quality. When comparing the annual contribution increases for the Discovery Healht Medical Scheme since 2008 with other open medical schemes, Discovery Health Medical Scheme’s annual contribution increases have been 1% or more lower on average each year. Maintaining this differential over time means members of DHMS have, on average, are paying 16.9% less for the same or better benefits in 2019, than members of other open medical schemes.”

Discovery today announced significant enhancements to its Discovery Primary Care product range, which offers employers affordable access to private healthcare outside medical schemes for their employees. In 2020, employees will have new benefits allowing them to use pharmacy-based primary healthcare clinics, which will increase the access to healthcare, and create affordable price points for employers. Discovery also announced household employers will be able to buy Discovery Primary Care for their household employees. Less than 1% of household employees are covered by private health insurance, and Discovery Primary Care now creates the opportunity to expand this cover significantly.

Quick Polls

QUESTION

No developing economy has ever built a single-payer complementary NHI equivalent covering the entire population. NHI promises comprehensive care but it is also 100% free at the point-of-service. Is this practical?

ANSWER

It is doable but collaboration is key
South Africa is not in a position to build NHI
The only conclusion possible is that the private healthcare sector is not going to disappear or change
There is little chance that the NHI will be able to receive significant government funding
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