Discovery Health Medical Scheme (DHMS) is going on the offensive against preventable diseases, using unprecedented reserves to launch a Wellth Fund. The medical aid scheme deferred increases for the third year running and has promised that the average contribution increase to kick in from 1 April will not exceed 8.9%. The contribution increase will be announced near the end of February.

Because scheme members made fewer claims over the past three years, with many avoiding doctors and hospitals on the back of Covid concerns, a number of medical schemes have seen a resultant increase in their scheme reserves.

Discovery Health CEO Dr Ryan Noach says the deferral of the 2023 contribution increase had generated an additional R1.9-billion in savings for members, bringing the cumulative member savings (returned to members from excess solvency) over the past three years close to R8.7-billion.

In addition to these savings, the scheme is launching a Wellth Fund to use the excess reserves. Noach confirmed that Discovery Health’s data clearly showed screening rates among members remained worryingly below pre-pandemic rates. General health checks were down 50%, mammograms down 15%, pap smears down 12% and prostate cancer screening checks were down 10%.

“The time has come to focus our attention on reversing this trend,” he added. “When it comes to diseases such as cancer or any form of chronic illness, early detection is fundamental to limiting serious complications and reducing costs in the long term. 

“Our data confirms that on average, a person diagnosed at the age of 40 with an early-stage breast cancer has a three times higher likelihood of surviving for five years post-diagnosis.”

The Wellth Fund will give all Discovery Health Medical Scheme members one-off access to as much as R10,000 per family for an expanded range of screening and preventative healthcare to be used over the next two years.

Noach said this was the best possible use of the scheme’s excess solvency reserves, noting that the decision was economically astute, since an improvement in 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.

How it works

You activate the Wellth Fund by completing a health check at Dis-Chem, Clicks, Pick n Pay or Medirite pharmacies, where a qualified nurse will check your blood glucose level, cholesterol, BMI (body mass index) and blood pressure. These tests set the baseline for your health status. 

Once the main member and all their dependants have completed their health checks, they will have access to up to R10,000 in their Wellth Fund – R2,500 per adult and R1,250 per child – for a range of additional screening and preventative healthcare. The quantum of the benefit for teenagers will be determined by their age as at the end of December 2024. If the child turns 18 on or before 31 December 2024, they will be able to access the adult benefit of R2,500.

Members have access to six broad categories of health screening and preventative healthcare services: general health, physical health, mental health, women’s health, men’s health and children’s health. Medical monitoring devices for certain health measurements are also covered. Services include one GP visit per year, one eye check-up, one hearing check-up, one dental check-up, a skin cancer screening and a heart consultation.

Claims paid from the Wellth Fund do not affect day-to-day limits. However, the fine print reveals that where healthcare services are also eligible for cover from another defined risk-benefit, for example, the Screening and Prevention Benefit, you claim from that benefit first, and then only from the Wellth Fund in instances where that benefit is depleted or unavailable.

Diabetes and cardiovascular disease

Discovery Health’s diabetes data show a 19% prevalence increase since 2018 and highlight that 86% of members living with diabetes receive regular treatment for cardiovascular disease. In addition, the data show that people living with high blood pressure, elevated blood sugar, abnormal cholesterol, elevated blood triglycerides and a high BMI – which is collectively known as cardiometabolic syndrome – have a significantly elevated risk of developing diabetes and cardiovascular disease.

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“Since diabetes and cardiovascular disease can have a significant impact on life expectancy and years spent in good health, it is critical that we can predict, intervene and support those members who are at risk of developing these conditions, especially as the scheme makes a significant investment in health screening in 2023,” said Noach.   

Read in Daily Maverick: “Medical aid costs in 2023 — what to expect”

Members identified as at-risk, through predictive analysis of screening outcomes and personal 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.  

On completion of the programme, members will either exit, remain on medication to keep their risk under control, or will be able to register for the DHMS chronic illness benefit. 

What is driving medical inflation for 2023?

Noach explained in 2022 that the scheme’s contribution increase announcement would be deferred to the end of February to accommodate a volatile consumer price inflation (CPI) and healthcare utilisation outlook.

“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, though members will experience a real annual increase of between CPI and CPI plus 2%, considering the deferral. As always, DHMS aims to accurately balance its long-term sustainability with short-term affordability for its members,” he said. 

Medical schemes usually increase contributions in line with the real and anticipated year-on-year increase in the cost of healthcare claims (medical inflation). Factors that influence medical inflation include:

• CPI: The inflation forecast for December 2022 was said to have eased to 7.2% from 7.4% in November. Economist Lara Hodes of Investec Bank said global food prices rose by 1.8% m/m in December which will be a key driver as food prices make up a notable portion of the CPI basket, while the petrol price saw a small uptick, which will add some additional pressure;
• Annual tariff or price increases for medical expenses (such as the cost of a visit to the doctor), which are widely expected to increase by 0.5% above CPI this year;
• Demographic risk: As an increasing number of those using medical schemes are getting older, the resultant higher demand for healthcare means that claims costs are expected to increase by 3% this year; and
• Supply-side factors such as the cost of new healthcare technologies increase the cost and volume of available healthcare services.

The Council for Medical Schemes has recommended that contribution increases for 2023 should be limited to 5.7%, in line with the South African Reserve Bank’s projected average inflation rate for this year. DM/BM