Discovery Health Medical Scheme (DHMS), the largest in the country, says its medical aid contribution increases will only take effect from April 2023, instead of January. It says the scheme is “optimally priced for expected claims”.
This is the third year running that it has deferred annual contribution increases for members. Exact increases will be announced at the end of February.
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Dr Ryan Noach, CEO of Discovery Health, says: “For now, both the Consumer Price Inflation (CPI) and healthcare utilisation outlook remain volatile. It’s important that the contribution increase accurately reflects underlying price and utilisation changes for 2023. The eventual increase will be in line with medical inflation which is typically 3% to 4% above CPI.”
Discovery says because of the three-month deferral, members will experience a real increase of between CPI and CPI+2% across the year.
Noach says the “scheme’s reserves strengthened relative to regulated solvency requirements because of the significant decline in non-Covid healthcare claims recorded during the pandemic and into 2022” and that this “excess solvency has been used to the benefit of members”.
The three-month deferral next year will amount to R1.9 billion in savings for members.
Including this amount, a total of R8.7 billion has been saved by deferrals since the onset of Covid-19, which fuelled “related disruptions to the healthcare system”.
DHMS says it is the only medical scheme in the country to have deferred increases for members and that its “effective annual contribution increases … were 50 basis points below the market” over the past two years.
At the end of June, DHMS had an unaudited solvency of 36%. The regulated level required by medical schemes is 25%. DHMS has a 57.6% share of the open scheme market, and a roughly 40% share of all schemes including the Government Employees Medical Scheme (GEMS).
Noach says that from January, DHMS “will make its excess solvency reserves available to fund an expanded range of screening and preventive healthcare for members through the new Wellth Fund”.
It will complement this with a “new disease prevention programme to proactively identify and support members with elevated health risks”.
The Wellth Fund will use the extra capital in DHMS to provide a once-off benefit of up to R10 000 per family for an expanded range of screening and preventative healthcare which can be used in the next two years.
A Vitality Health Check needs to be completed to activate this benefit.
This will set the baseline for a member’s health status. Once this is done, members will have access to up to R2 500 per adult and R1 250 per child for “six broad categories of health screening and preventative healthcare services, including general health, physical health, mental health, women’s health, men’s health, and children’s health”.
Medical monitoring devices for certain health measurements will also be covered.
“The Wellth Fund represents the best possible use of the scheme’s excess solvency reserves,” says Noach.
“It is also economically astute, considering that an improvement in the scheme members’ health means a long-term and lasting reduction in claims, with a nine-fold return on investment for funding the screening and preventive healthcare offered through the fund.”
Additionally, members identified as at-risk of diabetes or cardiovascular disease (using screening and health records) “will be prompted to consult with a GP to confirm their risk and enrol them in the 12-month management programme, with risk benefits in place for clinical support and treatment”.
“The programme includes access to a GP, dietitian, pathology testing and 12 coaching sessions.”
Smart newcomer to plan line-up
Discovery Health will introduce a new plan – the Essential Dynamic Smart plan – which is premised on a dynamic hospital network.
It will use its proprietary artificial intelligence algorithm to identify the most efficient hospital for a member’s admission requirements at a specific point in time.
The plan offers funding in full for “hospitalisation and care within this preferred network, optimally balancing cost, and quality choices”.
The network restrictions do not apply to emergencies.
“For many members, the trade-off between a lower contribution and hospital networks is convincing when choosing a medical scheme,” says Noach.
“The new Essential Dynamic Smart plan enters the market as the most affordable in the Smart Series in 2023, at a compelling price point of R1 450 per month, also making this the lowest cost per unit of benefit among comparable plans in open medical schemes.”