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Competitive contribution increases linked to medical inflation, enhanced benefits and greater access to healthcare for Discovery Health Medical Scheme clients in 2019

13 September 2018Discovery Health

• 2019 contribution increases designed to ensure access to cover and sustainability for members • Significantly enhanced benefits for members affected by chronic conditions and cancer • Digital innovation to help members navigate the healthcare system and manage their health better

Discovery Health today announced the annual contribution increase and benefit enhancements for Discovery Health Medical Scheme (DHMS) members for 2019. DHMS members can expect a weighted average contribution increase of 9.2% which is within the expected range for medical inflation, and maintains price competitiveness and quality benefits. This increase includes the impact of the 1% increase in VAT. Dr Nozipho Sangweni, Principal Officer of Discovery Health Medical Scheme explains; “The average increase for Discovery Health Medical Scheme members for 2019 is aimed at balancing the increasing demand for and supply of healthcare services, with the need to maintain benefits and competitive contributions for members. Our priority remains ensuring access to the best quality care for our members, and to this end we have done important work with the Scheme’s administrator, Discovery Health, to expand access to private healthcare. In addition, we have created a network of day hospital facilities where healthcare providers can provide quality care without the need for overnight stays. We have also worked hard to improve how members experience healthcare through an investment in our digital capabilities and services.”

See attached breakdown of increases per plan.

Earlier today in the presentation to financial advisers in Sandton, Johannesburg, Dr. Jonathan Broomberg, CEO of Discovery Health, 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 critical for medical schemes, as it has a significant impact on a scheme’s ability to provide affordable cover to healthcare services on a sustainable basis.” For Discovery Health Medical Scheme, increases in the cost of healthcare claims can be attributed mainly to more members needing to use healthcare services, and members making use of services more frequently. Broomberg provided examples of the last two points, citing higher chronic and oncology related claims as a significant contributor to demand-side inflation. “Claims data for Discovery Health Medical Scheme shows that the incidence of cancer in women has nearly doubled since 2008, and for men it more than doubled. At the same time, advances in medicine and medical technology, while having a positive impact on patients’ lives, increase costs substantially, since they are often more expensive than the older treatments they replace.”

Discovery Health estimates total medical inflation for 2018 at between 11.2% and 12.2%, with the variance due to utilisation trends in different health plan options. However, risk management by Discovery Health and the ongoing positive impact of the Vitality wellness programme on members’ health, will reduce medical inflation by 2%, resulting in contribution increases that are within the corridor of 3% to 4% above CPI after allowing for the required adjustment for VAT.”

Broomberg continued, “contribution increases must be seen in light of the Scheme’s historic performance and ability to keep contributions and plan benefits stable and at a high quality. The cumulative annual contribution increases for the Scheme since 2010, have remained within 3% to 4% of CPI, which is the guideline we apply for our client schemes. They have also remained approximately 1% below that of the rest of the open scheme industry. Maintaining this differential over time means members on average paid 16.4% less for the same or better benefits in 2018, than members of other schemes.

Discovery Health Medical Scheme also announced significant enhancements in cover for cancer treatments for members of its Executive and Comprehensive Plans, who will have access to cover for a wide range of additional innovative cancer treatments over and above those normally covered. In addition, the scheme announced significant enhancements to its DiabetesCare programme, as well as the launch of new programmes for the management of members with heart disease and depression. These new condition management programmes bring together the assets of Discovery Health, DHMS and Vitality to provide enhanced benefits and incentives to members with one or more of these conditions, while also providing additional funding to their treating doctors based on the outcomes of their care.

Discovery Health also announced significant enhancements in its digital platform for DHMS members, with a particular focus on enhanced tools to allow members to identify appropriate healthcare professionals in their area.

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