Discovery Health and Discovery Health Medical Scheme (DHMS), the country’s largest open medical scheme with over 2.7 million members, has released insightful data into medical aid claims trends for the past year.
DHMS paid over R50.6 billion in claims in 2017*, with R26.3 billion of those claims going towards hospital claims and R2.9 billion towards chronic conditions. Dr Jonathan Broomberg, CEO of Discovery Health, said that "In an environment where medical inflation continues to outstrip consumer inflation, our responsibility to the Scheme and its members is to manage their contributions and benefits in such a way that members have peace of mind when it comes to their healthcare needs.”
Medical schemes such as Discovery Health Medical Scheme, are highly regulated entities in South Africa. Schemes are not-for-profit entities, solely funded through member contributions and with the aim of paying members’ medical claims. But like elsewhere in the world, medical schemes are faced with the challenges of high healthcare costs, various supply- and demand-side factors, and demographic trends such as an aging population and increasing chronic diseases of lifestyle. All of these trends place schemes and healthcare funders under severe cost pressures. “Annual medical scheme claims expenditure rose on average by 11.3% a year over the past decade - roughly 5% above CPI.
This is a global trend and not limited to South Africa,” explains Broomberg. “We are very aware that consumers are under increasing financial pressure on multiple fronts, and we therefore work very hard to ensure the best access to care for all Scheme members, at affordable, sustainable contributions.”
The data show claims trends in terms of in-hospital admissions and treatments, chronic conditions, day-to-day treatment, screening and prevention, maternity and cancer. Amounts paid for in-hospital claims show that a single severe event could, in the absence of medical scheme cover, mean potential financial ruin for a family. Broomberg explains, “During the past year, Discovery Health Medical Scheme covered just over 670 000 hospital admissions. The highest claim covered by the Scheme was R6.8 million towards 199 days of treatment for a 58-year old for a cardio-vascular related condition. This single claim would require 205 years’ worth of contributions by the member to cover the claim,”
The Scheme paid a total of R26.3 billion for hospital claims and R2.9 billion towards the care of 642 410 members with a chronic condition. Maternity claims cost R1.4 billion, with caesarean births representing the greatest total hospital cost to the Scheme (28 329 admissions) and 9 750 natural births covered on the Scheme.
Chronic diseases of lifestyle are on the rise, with members increasingly presenting with two or more conditions.
South Africa is very much part of the global challenge of chronic diseases of lifestyle, and Discovery Health Medical Scheme’s claims data reflect the trend of escalating chronic disease. In 2008, just over 300 000 members registered on the Chronic Illness Benefit, with this figure more than doubling by 2017 (642 410 members registered for a chronic illness). Broomberg explains; “We know that chronic diseases of lifestyle are on the rise. But what our claims trends are telling us now is that increasingly, members are presenting with more than one chronic disease and some are experiencing up to five chronic diseases.”
Ongoing medicine treatment remains a significant cost component for Discovery Health to manage for the Scheme. On average, for every R100 paid by the Scheme for a claim relating to a chronic condition, R78.60 is spent on medicines. Essential hypertension afflicts the majority of members with an average monthly cost per chronic member, at R387, followed by hypercholesterolemia, asthma and diabetes and other chronic conditions. Hypothyroidism has seen the greatest increase in enrolled members, up 11% from the previous year. The most costly chronic condition is diabetes mellitus with an average monthly cost of R650 per enrolled member.
Cancer prevalence is increasing globally and in South Africa.
The Scheme’s claims experience also reflects the global trend in increasing cancer prevalence. “The number of members receiving oncology treatment has increased over the past 10 years due to the higher prevalence of cancer in South Africa and globally,” says Broomberg. Scheme data show 33 985 members actively claiming for oncology-related treatment at a total cost of R3 billion over 2017. The top three cancers are breast (14 435 members), followed by prostate (12 122 members) and colorectal cancer (3 970 members). Soft tissue and thyroid cancer have seen the greatest increase in claimants, up 8.2% each from the previous period. The most expensive cancer to treat is lung cancer at an average monthly cost of R16 417.
The highest oncology claim paid out was for multiple myeloma at R1.5 million. Broomberg continues; “There have been significant advances in treatment regimens that include new cancer drugs, resulting in potentially life-saving options for patients. These treatments, however, come at a far higher cost than the older treatments they replace, which is a challenge for medical schemes to manage. Our responsibility as Discovery Health is to provide access to clinically relevant and appropriate care, and to ensure that this is done in a manner that is fair to all members of the Scheme.”
Effective population-based screening is critical for the early detection of, and intervention in, chronic diseases of lifestyle. The Scheme’s data shows a direct correlation between screening outcomes and mortality and morbidity experience. Members who are highly engaged in Vitality, have better health outcomes than members who do not participate in the programme. These members, on average, have 10% lower hospital admissions, 25% shorter hospital stays and 14% lower overall claims costs.
About Discovery Health Medical Scheme
Discovery Health Medical Scheme is the biggest open medical scheme in the country, providing medical cover to 2.7-million lives, or 56% of the open scheme market.
Medical schemes in South Africa, such as Discovery Health Medical Scheme, work on the basis of cross-subsidization and community-rated contributions. This means that all members pay the same contribution for the same health plan, regardless of individual health risk or age. Healthier members pay towards the claims of sicker members, and schemes may not reject individuals for cover. Schemes may apply waiting periods and late joiner penalty fees as risk management tools.
Discovery Health Medical Scheme offers seven major health plans that are further divided into 23 benefit options. This ensures all members of the Scheme have access to a suitable health plan that meets their needs.